Why Hyundai’s hot streak in Europe is set to continue

Based on the status and success of Ioniq products, would you consider making it a stand-alone brand?

No. The fact that Hyundai already holds a leading position in alternative powertrains has given the Ioniq strength and reliability as a product line. Building on this with our Ioniq model, it plays well with the rest of the Hyundai lineup. There can be only one brand, and that brand is Hyundai.

What percentage of Hyundai’s total sales were full electric in the first half and what is the target for the full year?

In the first half and for the full year, we expect zero-emissions vehicles to account for 16 percent of our sales in Europe, which will be mostly BEVs. [battery-electric vehicles] and some Nexo hydrogen fuel cell vehicles. We reached that number in the first half, which means that zero-emissions cars account for about one out of every six vehicles sold.

What is your outlook for Hyundai’s BEV sales next year?

I think it will be around 20 percent. Ioniq 6 will give us a boost. But we have to take into account how much the current supply constraints on other vehicles are driving EV penetration.

Hyundai is considering whether to launch the smaller BEV. When will the decision be taken? What is the target price and how difficult will it be to reach that price given the rapid rise in raw material prices?

This is something we are looking at as small vehicles are a significant part of the European market. We haven’t made a final decision yet, and it’s going to get a bit more complicated given the rising raw material cost. The target price of 20,000 euros is not only a challenge for us. Is it realistic? Given the rising prices of ingredients, I think this is becoming more and more difficult. This is something that we are going to solve over the next 12 months. But we envision a smaller, penetration BEV as an important part of our future proposition.

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Is there any chance that we will see such a product before or after 2025?

I think it will happen after 2025.

Competitors such as Toyota have abandoned the traditional minicar segment, making their entry model a small SUV/crossover. Will Hyundai do the same as this body style gives an opportunity to charge higher prices and generate better margins?

We are prepared to consider the size of the entry vehicle. Is it in the A-segment (minicar)? Is it in the B-segment (small)? Or is it somewhere in between? These are the things we are discussing. I can’t confirm anything today as we are just starting the discussion.

With rising inflation, customers have less disposable income at a time when car prices are also rising. Given these constraints, do you see European, Japanese and Korean automakers leaving the entry-level, 15,000-euro segment for the Chinese brand?

We’re definitely not in that position right now. We would not want to give up any segment of the mainstream market in which we believe we have a solid customer base and great opportunities. I am confident in our ability to achieve that price target. On the other hand, we are also not the least expensive in this area. We have built our image on quality, engineering and design in Europe. We have price parity with long-established mainstream brands in Europe, which is a strong position for us.

How can you address the bottom line of the market?

There will be opportunities to offer entry EVs at a price point that customers will accept. On the one hand, if residual values ​​remain healthy, and there is still demand for the product, perhaps we can move to leasing or subscription services, where we provide access to entry EV mobility at affordable monthly payments. On the other hand, I think the support of European governments is still important to help drive the EV transition. Hopefully, we will see them continue to demonstrate their commitment to carbon neutrality, a theme we wholeheartedly support.

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It is likely that the European Union will ban the sale of combustion cars by 2035. Can you imagine Hyundai stopping all combustion car sales in Europe before the date that some of the competitors have already announced?

It is possible, but it is not in our plan. The biggest challenge in Europe is inequality across the region. In some Central or Eastern European markets, perhaps some Southern European markets, the 2035 time frame will be a challenge.

You said that two years ago everyone was concerned about the CO2 targets. Now, in fact, no one talks about CO2 targets anymore. Did Hyundai make last year’s target? When will we know the official EU measurements?

In 2020, we had to measure carefully by the end of the year, whereas last year, we easily achieved our target. We expect this to become even easier in 2022 due to our product mix. We have not only electric vehicles, but plug-in hybrids as well, which we didn’t have in any quantity in 2020. Right now, we’re not worried, but that doesn’t mean we’re relaxed about our goals. If you aim to reduce your CO2 targets by 55 percent by 2030 versus 2021, it probably means that 65 to 70 percent of your lineup is going to consist of zero-emissions vehicles. This will be difficult given the lack of EV infrastructure in some Central and Eastern European markets. But I am confident that we will get there because of our strength in EVs.