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General Motors and Hyundai will co-develop a broad range of vehicles and share resources, including raw materials for EV batteries.
The downturn in America’s demand for EVs has inspired traditional automakers to postpone aggressive electric fleet expansion plans. Certain brands now seem to be approaching electrification plans more cautiously, with General Motors and Hyundai announcing collaborative efforts to optimize the manufacturing of car engines.
GM and Hyundai Collaboration Details
GM and Hyundai recently announced a partnership, exploring ways to complement each other’s strengths for lower costs and faster vehicle production with newer technologies. In addition to EVs, the two motor giants will collaborate on hydrogen-powered and more traditional internal combustion engines (ICEs).
The efforts will include shared sourcing of raw materials, including steel for making the chassis plus lithium and other materials for batteries. The sharing of resources and manufacturing technologies could especially benefit GM, which has been reeling from production issues that have significantly delayed the automaker’s delivery targets and CEO Mary Barra’s unfulfilled ambitions to have an extensive fleet of electric and autonomous vehicles by 2024, primarily through automation in manufacturing.
GM has been relentless with its EV expansion plans, pumping billions into increasing production. In 2022, it announced $2.6 billion to spring up a new battery manufacturing unit in partnership with LG and spent another $4 billion to refurbish its Orion assembly line, with the intent to manufacture 600,000 EVs by 2025. The LG partnership reportedly fell through in January 2023. This is further supplemented by the federal government’s $1.7 billion boost to revamp older plants for EV production.
In 2023, the automaker made a $1 billion joint investment with South Korea’s POSCO Future M to ramp up battery production. Later that year, it also announced a $3 billion partnership with Samsung SDI to build its fourth EV plant in North America. In February this year, it pledged another $19 billion through 2035 to source materials from LG.
EV Issues Across the Industry
Despite the efforts, GM’s EV sales have been far from encouraging, with the auto group selling fewer than 76,000 EVs in 2023 across multiple brands such as Chevrolet, Cadillac, and GMC. The company also scaled back on its EV projections for 2025, hoping it would sell 200,000 to 250,000 units instead of the previously anticipated 200,000 to 300,000.
Meanwhile, Hyundai has been cinching market share as the second-largest EV maker in the US with promising models under its belt, as well as sister companies such as Kia and Genesis. While the exact details of the partnership have yet to be finalized, it could help GM finally pick up its EV production while Hyundai benefits from GM’s vast manufacturing and service network.
Alongside standard battery EVs, Hyundai’s decade-long commitment to EVs driven by hydrogen-powered fuel cells can help GM bolster its more recent foray into the field. Earlier this year, GM showcased a sample fleet of hydrogen fuel cell trucks modeled on the Silverado 5500. This was built as a result of GM’s partnership with Honda for hydrogen vehicles, which began in 2013 but could only briefly bear fruits this year.
While the Biden administration’s recently announced tax credit for hydrogen-based vehicles could help the case, the dismal state of hydrogen filling stations in the US and limited availability in states besides California could deter these plans.
Notably, this is the first time GM and Hyundai come together for a partnership. Previously, GM partnered with Honda to produce low-cost EVs, starting in 2018 and then severing ties in late 2023 due to rising costs. The only model to emerge out of the five-year-long partnership was the 2024 Honda Prologue and the Acura ZDX. Meanwhile, the status of GM’s partnership with Honda for hydrogen vehicles is unclear, Hyundai’s arrival could suggest that is ending as well.
