GM, Hyundai explore partnership to develop vehicles together
Summary
The carmakers say the potential collaboration could help cut costs by teaming up on new models, including electric and hydrogen-powered vehicles.
General Motors and Hyundai Motor are exploring a partnership that could mean savings on items like steel and electric-vehicle battery materials or even result in the joint development and production of vehicles, the companies said Thursday.
The American and Korean automakers are looking for additional scale as they navigate a costly transition from internal combustion engines to EVs.
The automakers have entered a nonbinding agreement to discuss ways to develop vehicles together, including gas-engine models, as well as electric and hydrogen-powered cars.
The two companies declined to elaborate on the potential partnership, which would be the first of its kind between GM and Hyundai, saying more details would be released if legal agreements are finalized.
“GM and Hyundai have complementary strengths and talented teams," GM Chief Executive Mary Barra said in a news release. “Our goal is to unlock the scale and creativity of both companies to deliver even more competitive vehicles to customers."
GM, which still relies on gas-powered trucks and sport-utility vehicles for the bulk of its profits, has delayed several EV projects and is now planning to add new hybrid models in North America after deciding to forgo this technology late last decade.
The automaker still believes in an “all-electric future" and is rolling out several new battery-powered models this year, which the company hopes eventually will turn a profit.
In recent years, GM executives have emphasized the need to cut costs amid more stringent regulations on vehicle emissions and competitive pressures from China and elsewhere.
“We look at the global threats that are out there. The way you can be competitive is (to) make great vehicles at an efficient price, and that means we need to continue to strive for efficiencies," GM Chief Financial Officer Paul Jacobson said at an investor event in June.
Hyundai and its partner carmaker, Kia, have become the second-largest seller of EVs in the U.S. behind Tesla. Together, they accounted for 10% of all EVs sold through July, according to research firm Motor Intelligence. Kia isn’t currently part of the partnership discussions with GM, a Hyundai spokesperson said.
In August, Hyundai said it was maintaining its target of selling two million EVs globally by 2030, in contrast with many car companies who have pulled back on their targets amid tepid consumer demand for battery-powered vehicles.
A partnership with GM could help Hyundai expand its presence in the U.S. Hyundai Chief Operating Officer José Muñoz has said the company hasn’t been able to produce enough EVs because of a lack of factory space. The Korean carmaker has also missed out on some tax credits for EV buyers because it doesn’t produce them in the U.S.
Hyundai and Kia are building a new factory in Georgia that is due to open near the end of 2024, which will allow the sibling automakers to produce an additional 300,000 vehicles a year.
Partnerships between automakers aren’t unusual.
GM in 2020 announced an alliance with Japanese automakerHonda Motor that entailed wide-ranging cooperation, from engineering underlying vehicle components to purchasing parts. That partnership ended up with a more limited scope, however.
Honda earlier this year released a pair of electric SUVs, the Honda Prologue and Acura ZDX, that were developed on GM’s Ultium EV platform and assembled by GM. The automakers scrapped plans to develop less-expensive EVs for later this decade.
Honda is now building its own EV plant in Ohio and hasn’t announced additional models with GM. The two companies confirmed they still collaborate on hydrogen fuel-cell technology.
Write to Christopher Otts at christopher.otts@wsj.com and Sean McLain at sean.mclain@wsj.com
