Hyundai Motor Group is taking on a new challenge 24 years after entering China. It plans to shed its image of selling value-for-money internal combustion vehicles and transform into a new energy vehicle (NEV) brand led by electric cars. This is the biggest change since it established the joint venture Beijing Hyundai with Beijing Automotive in 2002.
Hyundai Motor will unveil the first China mass-production model under the Ioniq brand at Auto China (Beijing Motor Show) on the 24th in Beijing. It has been two years since Hyundai Motor Group participated in the Beijing Motor Show. Starting with the China-only Ioniq to be revealed on the 24th, Hyundai Motor Group will announce its plan to transition into an NEV brand. NEV refers to vehicles powered by new energy sources instead of internal combustion engines.
In the mid-2010s, Hyundai Motor Group was counted among the Big 3 in China alongside General Motors (GM) and Volkswagen. In 2016, Beijing Hyundai had a 6.5% market share and Dongfeng Yueda Kia had 3.7%, for a combined double-digit share. Sales at the time reached 1.79 million vehicles.
However, after frictions between Korea and China triggered by the deployment of the Terminal High Altitude Area Defense (THAAD) system, Hyundai Motor Group's sales shrank sharply. Following a boycott of Korean products, Chinese automakers such as BYD and Geely Automobile Holdings surged, which also constrained Hyundai Motor and Kia. Hyundai Motor and Kia sold 210,000 vehicles in China last year. That is down to one-eighth of the volume nine years earlier.
In China, investment in new EVs and autonomous driving has grown so much that even Huawei, the country's largest information technology (IT) company, has entered the auto industry. According to China Yiou Auto Research Institute, NEV sales in China were about 1.26 million in 2018 and surged to 16.49 million in 2025.
In particular, last year NEVs accounted for 54% of all vehicles, indicating that NEVs surpassed internal combustion models. Instead of exiting China, Hyundai Motor Group regrouped and developed NEVs suited for China. A Hyundai Motor Group official said, "The China-local Ioniq new model is the result."
Hyundai Motor Group's first strategy is localization. It decided to apply autonomous driving technology developed by local IT company Momenta to the new Ioniq. The group also plans to expand service and charging infrastructure to build the Ioniq ecosystem.
In addition, it plans to work with Chinese battery company CATL on next-generation battery technology and supply chain development, and with energy company Sinopec to build a hydrogen ecosystem centered on HTWO Guangzhou, a Hydrogen Fuel Cell system joint venture.
Hyundai Motor Group sees the current shift in China's eco-friendly vehicle policy as the optimal time for a rebound. In China's 15th five-year plan, only intelligent connected NEVs are classified as a new growth industry. The intent is for the government to support only NEVs that apply Autonomous Driving and artificial intelligence (AI).
Also, the trade-in policy called Yijihuanxin (以舊換新), which replaces old cars with NEVs, has been changed from a flat-rate to a proportional system. The more expensive the car you buy, the bigger the discount. As a result, local brands that sell entry-level EVs have reportedly slowed recently.
Earlier, Hyundai Motor President José Muñoz, under the slogan "From China, for China, to the world," said the company would unveil six EVs in China and achieve annual sales of 500,000 vehicles. Hyundai Motor also plans to launch an extended-range electric vehicle (EREV) in China next year.
An EREV is a vehicle that uses a battery as its main power source. It also has an internal combustion engine, but it is used only to charge the battery. That is what differentiates it from a plug-in hybrid (PHEV).
Kia is also pursuing localization. It is mass-producing the EV5, unveiled in Aug. 2023, at its Yancheng plant in China and exporting China-made units to Latin America and Australia, among others. Kia also agreed to cooperate with its local joint venture partner Yueda Group not only in complete vehicle sales but also in areas such as batteries and hydrogen.