Amid the rapid transformation of the global electric vehicle market, General Motors and Hyundai announced on Wednesday (August 6) a collaboration to develop five new cars, including internal combustion engine, hybrid, and all-electric models, set to debut in the Americas.
The two companies will introduce a compact SUV, a sedan, a pickup truck, and a midsize pickup truck, expected to hit the markets in Central and South America by 2028. These four vehicles will be equipped with internal combustion engines and hybrid systems. Additionally, there will be an electric commercial van, set to hit the US market as early as 2028.
General Motors and Hyundai have not disclosed the production locations for these new vehicles, but it is anticipated that the annual production capacity will reach at least 800,000 units once in full operation. Both parties aim to combat the increasingly fierce competition from Chinese electric vehicle manufacturers in the Latin American market through this collaboration.
Teddi Kim, Director of Mirae-Mobility Research & Services, stated, “This collaboration is a win-win strategy as General Motors can learn hybrid technology from Hyundai, and Hyundai can leverage the partnership with General Motors to gain a favorable position in trade negotiations with the United States.”
Last week, the US and South Korea reached a trade agreement, imposing a 15% tariff on South Korean goods, including automobiles.
This marks Hyundai’s first collaboration with other automakers in developing multiple vehicle models. Following the announcement of the joint development agreement, Hyundai’s stock price rose by 0.7%.
However, there are doubts about whether this collaboration will yield substantial benefits.
An Hyung-jin, Chief Investment Officer of the South Korean hedge fund, Billionfold Asset Management, stated, “Even if they sell these new cars in South America, it will be difficult to surpass Chinese competitors who lead the electric vehicle market with low prices.” He pointed out that “Hyundai may learn from General Motors on how to manufacture pickup trucks, but it will still take some time to become profitable.”
Facing competition pressure from Chinese electric vehicle manufacturers and the high costs resulting from global tariffs, traditional automakers like General Motors are actively seeking ways to reduce development and manufacturing costs.
In recent years, General Motors has concluded multiple collaborations with Honda of Japan, ending a large-scale project to jointly develop affordable electric vehicles in 2023. Meanwhile, Chinese automakers continue to introduce technologically advanced and affordable vehicles, further squeezing the market space, prompting traditional automakers to explore collaboration strategies to offset the high costs of developing electric vehicles.
Simultaneously, the increase in global tariffs, amounting to billions of dollars in expenses, has made cost reduction a top priority for automakers.