Hyundai Motor Co. has decided to increase investment in its upcoming Georgia plant to focus on producing hybrids, veering from its original plan to exclusively manufacture electric vehicles (EVs). Several legacy automakers, including Hyundai, have cited a slowdown in EV demand, prompting a shift towards hybrid production to mitigate losses. During its recent Q1 2024 earnings call, Hyundai confirmed the decision to prioritize hybrid production in Georgia. The company reported an operating profit of over 3.5 trillion won and record sales exceeding 40 trillion won in the first quarter.
Hyundai’s CFO, Seung Jo Lee, attributed the high profitability to the significant decline in EV sales and the strong contribution of hybrids as high-margin products. In Q1, Hyundai’s battery electric vehicles (BEVs) accounted for only 4.5% of its total shipment, marking a 6.5% decrease from the previous year. In contrast, hybrid sales saw a nearly 17% year-over-year increase, reaching almost 98,000 units. Although Hyundai’s total unit sales in the first quarter dropped by 4% compared to the previous year, the company’s hybrid segment demonstrated resilience amid the shifting market dynamics.
The shift towards hybrid production is not unique to Hyundai, as other legacy automakers, such as Tesla, have also acknowledged the current slowdown in EV demand. Despite the challenging landscape, Tesla has reiterated its belief in the future of EVs and their significance in the automotive industry during its recent earnings call.