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HMC Future Mobility
Hello everyone,
This is Albert Biermann, President and Head of Hyundai Motor’s R&D
Center.
Slide 1
Electrification is the biggest buzz in the auto industry today.
This year, due to COVID-19, the global automobile demand has weakened
significantly, declining by about 20%.
However, electric vehicle sales are telling a different story with a 7% year
over year increase. Especially in Europe, sales of electric vehicles have
sharply risen by 64% compared to 2019 due to tighter CO2 emission
regulations, while the overall demand fell by more than 30%. With the
European market leading the way, the growth of electric vehicles is
expected to accelerate further in years to come. By 2030, we expect the
electric vehicle market to take up around 30% of the entire automobile
market.
Slide 2
Now let us see how Hyundai Motor Company is doing in the electric
vehicle market.
As of end of the third quarter this year, Hyundai has sold globally about
61,000 units, which is an increase of 33% year on year. We account for 5.6%
of the global EV market share, which is an increase of 1.1% points from
4.5% in 2019. This proves that Hyundai’s EVs, such as the KONA EV, are
expanding their presence across the globe. And with the launch of our
new IONIQ 5 next year, we will further strengthen our top tier position in
the global EV market.
Slide 3
Year 2021 will be a milestone for us, as we will start expanding our EV
lineup with the IONIQ 5 to respond to the growing EV market. Going
forward, HMC plans to release more than 12 EV models by 2025 with the
goal of reaching 560,000 units of annual sales. We will do it by actively
supplying EV models using our new E-GMP platform to the market. In
addition, in order to secure and maintain our current leadership, we aim
to electrify our entire lineup in our key markets and secure an 8-10% EV
market share by 2040.
The Genesis brand is planning to launch EV-dedicated model and
derivative EV models from 2021, and will eventually pursue electrification
of its all lineups in the future. The Genesis brand, which is to successfully
establish itself as a luxury brand in the domestic and U.S market, is
planning to raise its brand presence across the globe by successfully
landing in other markets such as China, and Europe, and to build an image
of luxury eco-friendly brand by introducing a luxury lineup of electrified
models.
Slide 4
Now let me explain our mid to long term strategy in detail.
As I mentioned earlier, we intend to achieve full EV in our key markets and
secure an 8-10% market share by 2040.
Starting in 2030, Hyundai Motor Company plans to gradually shift its
lineup forward EV in key markets such as Europe, China, and the United
States, while maintaining ICE vehicle production capacity in emerging
countries such as India, Russia, and Brazil, but which will be limited to less
than 50%. In terms of product marketability, we aim to enhance our brand
image by targeting younger customers with high-end and higher trim
level vehicles.
Slide 5
To achieve this, we have set three core business strategies.
First is to secure competitiveness in manufacturing.
To maintain the cost level as similar as ICE models, we will further
commonize main parts, expand the line-up focusing on EV-dedicated
models and differentiate capacities of derivate EV models in the
affordable price market to prevent cannibalization and maximize profit.
Going forward, we plan to optimize our software and hardware
technology for the 5G and 6G environment. We will also secure cost
competitiveness by reforming the manufacturing platform which includes
production, operation, and logistics.
The second task is increasing our market share in the world’s major
electrified markets.
We will target the rapidly growing EV market in Europe and China first,
and expand to North America, Korea, India, and Indonesia taking full
advantage of our current diverse regional portfolio. In China, we will
enhance our brand value by reducing low-priced, low-fuel-efficient
models and increasing the portion of mid-to-high priced EVs. To this end,
we are reviewing plant efficiency and changes in production system.
In Europe, we will be more aggressive with electrification to meet the
continent’s CO2 regulation targets. We will first eye the countries with
strengthened tax benefits including the Netherlands and the UK. In
markets such as Norway, where the share of hydrogen fuel-cell electric
vehicle is expanding, we will increase our sales by fostering synergy
between battery EVs and FCEVs.
Third is restructuring the strategy execution process to enhance
competitiveness.
In order to successfully implement the aforementioned strategies, it is
necessary to thoroughly review their efficiency and execution plan. We
will clarify market positioning, target customers, and theme of our
electrification models from the initial development stage and establish
plans to manage manpower and external partnership, if needed.
Slide 6
Now, I would like to move on to explaining in detail our E-GMP which will
be launched next year.
Hyundai Motor Group has developed a dedicated EV platform for the next
generation EVs and plans to release the E-GMP models to the market,
starting with IONIQ 5.
E-GMP, which stands for Electric Global Modular Platform, boasts greater
interior space, longer AER, better performance, and safety optimized for
EV.
Slide 7
Spacious interior is one of the greatest advantages of the EV-dedicated
platform. As the engine and transmission are removed, a slim cockpit
enables a longer wheelbase, which gives us more interior space. Since the
center tunnel in the ICE models is no longer deployed, we can utilize the
extra space for new items, such as flat floor and utility rear seats. We
believe our current outstanding space utilization in ICE models will be
further enhanced in electric vehicles.
Slide 8
The E-GMP is a dedicated platform created solely for EVs. It is equipped
with a large-capacity and standardized battery that enables driving over
500km with a single charge, and an 80% ultra-fast charging within 18
minutes. In addition, we will provide a more advanced electrified mobility
experience with the world’s first multi-charging system for 400V and 800V,
which we believe is a unique competitiveness of Hyundai Motor.
Slide 9
Hyundai Motor’s E-GMP is mainly designed to drive the rear-wheel-
drive(2WD) system, but drivers can choose the all-wheel-drive(4WD) as
well. By installing an optimized battery system for the E-GMP, a balanced
weight distribution and low-center-of-gravity design enable an improved
handling performance and more stable high-speed driving experience.
Also, the E-GMP deploys a 5-link rear suspension and Integrated Driving
Axle(IDA), which will be mass produced for the first time in the world,
improving comfortable riding performance.
Slide 10
The most important factor for automakers is vehicle safety. The E-GMP
was developed with safety being the most important factor. For the safety
of passengers and protection of the battery, we used reinforced ultra-
high-strength steel, and the body structure is also developed in an
optimized structure in consideration of EVs.
Slide 11
The E-GMP was also developed with an emphasis on modularization and
standardization. It can be designed to match the needs of customers and
reduce manufacturing complexity, which will greatly improve production
efficiency. Furthermore, by providing additional services, we will present
a future mobility experience in which cars are part of people’s lives in ways
beyond just a transportation means.
Slide 12
The EV business is not just about selling vehicles. Let me move on to
Hyundai Motor’s strategy for EV-related business areas.
First is the battery. Batteries are the core of EV production, and we are in
strategic partnerships with multiple battery makers to secure supply and
development of the batteries. In order to respond to the expanding
electrification market, we are in the process of optimizing batteries by
market, segment and purpose. Next-generation solid-state batteries are
currently being developed under our leadership. We plan to test-launch
them in 2025 after meeting the standards on safety, distance, and
charging time, and start mass production in 2027, and full-scale
production around 2030.
In addition, we are reviewing business models related to the reuse and
recycling of batteries.
Next is charging infrastructure.
Building sufficient charging infrastructure is crucial to accelerate EV
adoption. Hyundai Motor is establishing 20 ultra-fast charging stations
with 120 chargers until 2021 in Korea and actively engage with multiple
global partners in oversea markets. In Europe, where EV adoption is
relatively common, we are developing a fast-charging business network
through a joint venture called IONITY where five global OEMs are involved.
We believe this will play key role in our EV sales going forward.
Finally, I would like to talk about our business model for future mobility.
In the near future, electric vehicles will change into various types of
mobility, equipped with large-capacity batteries. With these improved
battery packs, vehicles can perform as a sort of power buffer as drivers
can use the electricity for additional purposes other than just driving. To
make this happen, Hyundai Motor Company will apply to its future EVs the
battery function that provides electricity to outside devices or to the
power grid. These new technologies will open up a new chapter for
unprecedented business opportunities. Moreover, we plan to actively
expand our business areas to car sharing, last-mile delivery, and other
forms of mobility services by developing and launching the PBVs, or
Purpose Built Vehicles.
Slide 13
Thank you.
UAM
Cover Slide
- As a person who has been working in the field of aviation over 30
years, this is a truly exciting time because we are looking at a dawn
of a new era in aviation.
Slide 1
- Moving toward electrification and autonomous operation is the
overall trend in the transportation sector. The aviation sector is also
embracing this trend. The proliferation of drones in the recent years
is a good example. The idea of making lighter and smaller all-
electric flying vehicles such as drones led to the possibility of
designing all battery-powered, passenger-carrying aircraft that can
take off and land vertically with better safety and much quieter
noise level than conventional helicopters.
- Combined with ride sharing business model and rapidly advancing
ability to acquire and process big data, it is now conceivable to
provide safe, quiet, affordable air transportation which will open
the skies above our cities.
Slide 2
- The UAM or Urban Air Mobility is the next revolution in aviation with
a variety of applications such as transporting passengers, moving
goods, and serving public use cases.
Slide 3
- I would like to call this new era as “liberation from traffic
congestion.” The UAM will connect communities and bring them
closer together by enabling travel in the air, point to point, reducing
the travel time by 2X or 3X by skipping the ground traffic congestion.
With all-electric powertrain, it will help reducing pollution as well.
Most importantly, UAM will give back precious time to people to
enhance quality of life.
Slide 4
- You might want to ask, “Well, we already have helicopters that can
fly over our city and bypass the ground traffic. So, why UAM?”
- The helicopter cannot be the solution because it is too expensive
for public to use. Most megacities tightly regulate the commercial
operations of helicopters in the city because of the high noise level
and environmental impact. Extremely limited commercial
operations drive the price so high that general public cannot use
the service.
- UAM is not going to replace ground transportation. Rather it is
going to augment the society’s ability to meet the rapidly growing
urban mobility needs by expanding the 2-D world to 3-D. When we
are finally able to seamlessly integrate ground and air mobility, it
will truly transform the way we travel and move goods, which, in
turn, will change our lifestyle completely as cell phones have done.
Slide 5
- This potential is the reason why there has been so much interest in
UAM worldwide. There have been numerous studies forecasting a
huge UAM market in the next 10 to 20 years. The most optimistic
study forecasts a 1.5 trillion-dollar market in 2040’s.
Slide 6
- And because of this potential, so many companies have entered the
vehicle development with incredibly diverse designs. Over 250
concepts are being worked by major OEMs and start-up companies
around the world. This level of interest is very similar to what went
on in the early days of aviation some 100 years ago.
Slide 7
- The Hyundai Motor Company has unique strengths with
comprehensive capabilities to become the dominant global player
in this exciting new market.
• The scaled-up UAM market will need several 100s of thousands
or even several millions of vehicles for the global market. This
scale requires manufacturing technologies and experience to
produce large numbers of high-quality vehicles cost effectively.
• UAM market will offer various value chain opportunities such as
parts and MRO, infrastructure, and financing, which can be
captured by the Hyundai Motor Group’s comprehensive
capabilities.
• Successful vehicle and market development will require unique
technologies to differentiate us from competitors. Hyundai’s
hydrogen fuel cell technology and experience in electrification
will enable us to have the competitive edge. It also requires an
ability to form sophisticated, global scale partnerships.
• Finally, the ultimate success will come from the ability to
integrate all modes of future ground and air mobility to provide
seamless transportation experience to customers. The HMC has
the great potential to become the integrated mobility solutions
provider.
Slide 8
- Realizing a brand-new market, of course, has its own challenges.
We are building a world-class team to meet and overcome the
challenges by laser-focusing on the 4 pillars and by strictly
following the 4 cornerstone principles.
• Our 4 pillars will enable us to design and build safe, quiet,
affordable, and passenger-centered vehicles. Building the
safest vehicle is most important to us and we will not
compromise the safety of our vehicles.
• We will ensure the HMC’s vision of the human-centered mobility
is in our DNA by bringing vehicles that the public will enjoy the
ride in comfort.
Closing
- I have talked about the HMC’s unique strengths and comprehensive
capabilities. With the world-class team we are building and
effectively leveraging HMC’s comprehensive capabilities, I believe
we have the right to win the No. 1 position in the global UAM market.
To achieve this goal, we will execute the ‘3 Thrusts’ strategy.
- Thrust 1 is to build a family of air vehicles targeting both passenger
and cargo markets. All vehicles will have the vertical take-off and
landing capability to enable runway-independent operations. The
first product to enter the market in 2026 will be the mid to large
payload air cargo UAS with hybrid powertrain. The all-electric UAM
vehicle optimized for intra-city operation will enter the market in
2028. In 2030s, we will introduce a Regional Air Mobility vehicle that
will connect adjacent cities with extended range capability.
- Thrust 2 is to develop game-changing technologies that will
differentiate us from our competitors.
• By designing our vehicles for manufacturability from Day 1 and
leveraging HMC’s smart manufacturing technologies, we
believe we can produce our vehicles in large numbers and more
cost effectively than aviation OEMs and any other start-up
companies can.
• When we develop hydrogen fuel cell powertrain for aviation by
fully leveraging already commercialized HMC’s hydrogen fuel
cell technology, we will bring a revolution in aviation with
superior efficiency and range.
- Thrust 3 is to provide leadership in building the UAM eco-system.
In order to realize the fully scaled-up UAM market, just coming up
with an air vehicle will not be enough. All players such as federal
and local governments, regulatory organizations, real-estate
developers, vehicle developers, and air navigation service providers
need to work together to build the safest and affordable system.
- We will also engage directly with stakeholders to address their
concerns and promote benefits UAM can bring to their
communities to foster broad and effective public acceptance.
- As mentioned earlier, UAM will liberate us from traffic congestion
and democratize urban air mobility, serving the public as a critical
part of integrated mobility solutions.
- It will also free up facilities and land currently being used to support
ground transportation system. Just imagine a megacity could
convert even just 20% of its land used for streets and parking
facilities to museums, parks, community centers, and performing
centers.
- The UAM has a huge potential to vitalize our cities to become more
human-centric by providing better access to benefits and
convenience of big cities, better walkability, and cleaner air.
- HMC is committed to deliver the safest and affordable air vehicles
to bring this exciting new world to our customers. Thank you.
Autonomous Driving Technology Update
Hello this is Woogjun Jang, Head of Autonomous Driving Center at
Hyundai Motor Company.
I would like to talk about where we are with autonomous driving
technology.
Slide 1
Hyundai Motor Company’s development philosophy of autonomous
driving technology consists of two major pillars: Universal Safety and
Selective Convenience.
When it comes to Universal Safety, it means developing safety
technology to ensure that not only drivers, but also other vehicles,
motorcycles, cyclists, and pedestrians are safe and prepared for any
unexpected incidents on the road. And we aim to apply the developed
technology to all vehicle types at a reasonable price.
For example, in the case of Forward Collision-Avoidance Assist, which
is known to best prevent car accidents, was selectively applied to
luxury cars in the past. However, since 2017, Forward Collision-
Avoidance Assist has been extended to compact-sized vehicles as well.
According to North American and domestic standards, the application
rate of this technology is expected to reach 95% very soon.
Furthermore, since 2020, functions such as Lane Keeping Assist, Blind-
Spot Collision-Avoidance Assist are being applied to compact-sized
vehicles.
The second pillar is Selective Convenience. It means we will provide
sophisticated and complete convenience function as an option for
different segments. Examples include functions that enhance driving
and parking convenience such as Highway Driving Assist and Remote
Smart Parking Assist.
I will explain detailed roadmap of our development in the following
slide.
Slide 2
The roadmap of autonomous driving development can be divided into
four major axes: Driving Safety, Driving Convenience, Parking Safety
and Parking Convenience.
On Driving Safety, Forward Collision-Avoidance Assist function in the
past only prevented collisions for a vehicle in front. However, the target
of recognition extended to vehicles, motorcycles, cyclists, and
pedestrians along with range of recognition, which has expanded to
lateral, surround rear sides, and blind spots. Based on this FCA 2
function, we are developing an integrated architecture that ensures
accuracy not only for driving safety but also parking safety, and apply
it by 2022. In addition, we are planning to develop emergency
maneuver feature which pulls over onto the shoulder in an emergency
situation. We plan to continuously improve and advance the
abovementioned functions going forward.
In terms of Driving Convenience, we have a Level 2 Highway Driving
Assist that maintains distance between cars and assists driving along
the lane. It was first mass produced in 2015, and at the end of 2019,
we added a function of which vehicles change lanes based on turn
signals activation. As of now, the regulation requires drivers to put their
hands on the steering wheel. Recently however, newly established
regulation permits hands-off driving under Level 3 environment. We
are planning to mass produce Highway Driving Pilot (HDP), a Level 3
autonomous driving function that can cover speed of up to 60 km/h in
2022. And as regulation changes going forward, we will increase the
maximum speed from 60 km/h to 130 km/h and make lane change
feature from semi-automatic to fully automatic.
In terms of Parking Safety, in addition to 360 degrees view, we are
constantly enhancing the quality of video with advanced Surround
View Monitor (SVM) function which zooms into a particular area when
obstacles are found. In early 2019, we applied Reverse Parking
Collision-Avoidance Assist (PCA-R) on G90, a function which
automatically brakes when an obstacle, in other words a risk of
collision is found. As of today, this function covers rear side pedestrians,
but we are aiming to mass produce an advanced version in around
2021 with extended coverage to lateral and front view and expanded
recognition of obstacles in addition to pedestrians.
Remote Smart Parking Assist was first mass produced in our NEXO, a
hydrogen fuel cell vehicle in early 2018 and we extended it to Sonata
and Sonata Hybrid. Currently, it only covers perpendicular and parallel
parking and exits due to limitations of ultrasonic sensor. With RSPA 2,
which will be mass produced in around 2021, the camera-based
technology recognizes parking lines and free spaces, enabling a more
accurate and fast parking in various environments. Going forward, we
will develop a remote valet parking function by 2024, in which a vehicle
parks itself and returns without a person nearby.
Now, I will explain in detail what technologies we are developing
internally to realize the milestones on our roadmap.
Slide 3
First is the recognition technology that we are developing internally.
Our internalized sensor fusion enables recognition of surrounding
environment by processing data from front view camera, front radar,
front corner radars, and rear corner radars, and we have successfully
applied the sensor fusion on GV80 and G80. Based on this, we have
internalized a sensor fusion software that can perfectly operate Level
0 to Level 2 autonomous driving. Taking this one step further, we are
internally developing sensor fusion step 2 by adding rear side view
cameras and front corner lidars. Sensor fusion step 2 can operate Level
3 autonomous driving based on enhanced recognition range and
accuracy, and is scheduled to be applied on G90 in 2022.
Slide 4
In addition to sensor fusion that combines signals from different
sensors such as camera, radar, and lidar, we are also internally
developing recognition functions of individual sensors. Regarding
image recognition, an internalized technology first applied to G90 in
2019, it detects pedestrians in the rear side and automatically brakes
when there is risk of collision. We have constantly improved the image
recognition technology and expanded the range to not just rear side
but side view, front view, and rear side view and front side view
cameras. Also, we are continuously extending the target of recognition
to lanes, road markers, pedestrians, vehicles, and motorcycles. In
addition to image recognition, we are also internalizing lidar
recognition. Although lidars are supplied from overseas makers,
recognizing and making decisions based on Point Cloud from the lidars
are operated through internal software development. This lidar
recognition function is planned to be applied on Level 3 features for
G90, and also will be applied to Level 4 and 5 vehicles in the future.
Slide 5
Next is the integrated controller. In the past, ADAS functions were
scattered across individual sensors. Some of the functions were in the
front view camera, some in the front radar, and some were in rear
corner radar. Due to fragmented locations of logics, we faced many
constraints in improving performance and adding new features. As a
result, the sensor suppliers had advantage compared to us, which led
to difficulties in mass production of next-generation technology. To
overcome this structure, we started developing an integrated
controller from 2017, and successfully applied it to mass production in
late 2019. In the first-generation integrated controller mass produced
in 2019, various functions initially scattered among front view camera,
front radar, and front corner radar were pulled out and assembled into
the integrated controller. We then standardized I/O specifications
between sensor and the integrated controller, and established
centralized ADAS integrated controller through dedicated in-vehicle
network.
Slide 6
With centralized architecture based on integrated controller, it
became easier for us to improve existing functions and to add new
functions with more freedom and much faster on development. Based
on successful mass production of first-generation integrated
controller, we are in the process of developing a second-generation
integrated controller which targets Level 3 and remote valet parking
feature with the addition of high-performance processors. This
second-generation integrated controller can process advanced level
of signals such as deep learning-based image recognition. Moreover,
a wireless update function called OTA is available from this second-
generation integrated controller by cooperative control with
connectivity controller, adding security modules and changing in
power supply design. While we are mass producing and expanding
application of the first-generation integrated controller into GV80 and
G80, the second-generation integrated controller will also be applied
horizontally over new cars starting from next year. And since second-
generation integrated controller was developed, high-performance
processors could be replaced with next generation processor, it laid
foundation for not only Level 3 but also Level 4, 5 operation in the
future.
Slide 7
Now, I’d like to explain in detail the direction of our Level 4, 5
autonomous driving. In the previous slide, I went over the
development of integrated controller which has significant value in
terms of not only from hardware perspective but also from software
perspective. Establishing a software architecture on our initiative and
having it co-developed with Hyundai Motor Group subsidiaries and
outside partners means that we have established a layered software
architecture. In other words, we have internalized a technology that
can arbitrate multiple complex signals such as control, diagnosis, Fail-
safe, HMI, and etc. Furthermore, we developed an integrated module
that handles common input and output signals of sensor fusion and
those of vehicle dynamics. This integrated module led to enhanced
reusability of software modules. Finally, the AUTOSAR-based software
platform has been applied, and the interface among various software
modules is standardized. In other words, we have internalized task
scheduling, resource management, software integration technology
and embedded of software logics, enabling flexibility, scalability, and
reusability of software modules.
On the course of autonomous driving development, we have made
numerous significant accomplishments in hardware and software
architecture. Such accomplishments are equally applicable to not only
partial autonomous driving but also Level 4 and 5 autonomous driving.
We have confirmed, in terms of hardware, that we can achieve Level 4
and 5 by adding rear lidars, front side view cameras, and four roof
lidars on current Level 3 highway autonomous driving technology.
When it comes to software, given that we will reuse software modules
developed along mass production of Level 0, 1, 2, and 3 autonomous
driving, we have secured software function, performance, safety, and
durability, which are critical in commercializing Level 4 and 5 full
autonomous driving. These Level 4 and 5 technology will be applied
on public roads starting next year.
Slide 8
So far, I explained our strategy of developing Level 4 and 5 based on
our Level 0, 1, 2, and 3 technology. I’d like to move onto a bigger
picture to clarify our overall perspective on full autonomous driving.
Regarding full autonomous driving technology, countries have very
different regulations, making relationship with governments
extremely important. In addition, business opportunities are extensive,
including passenger vehicles, commercial vehicles, taxis, shuttles, and
trucks. Therefore, rather than tackling business opportunity with a
single technology, we believe it is necessary to cooperate with various
global companies while continuing to advance our own technology. As
an example, with Aptiv, we have established a JV, called Motional,
which is dedicated to Level 4 and 5 RoboTaxi development.
Furthermore, we are carrying out strategic investment and
collaboration with overseas startups in China, Israel, and the United
States.
With the ultimate goal of leading the way of future mobility, Hyundai
Motor Company is developing, applying and selling to global market,
our Level 0 to 3 partial autonomous driving technology. Also, we are
cooperating with global partners in developing Level 4 and 5
technology. We will continue to do our best to develop technology that
can provide benefits of autonomous driving including driver’s safety
and convenience.
Thank you.
HTWO
Cover Slide
Good afternoon. My name is Saehoon Kim, head of Hyundai Motor
Company’s fuel cell center.
Today, I would like to introduce our new brand for Hyundai Motor's
hydrogen fuel cell system, which opens up a new horizon for energy.
It’s been 18 years since I developed Fuel Cell system in Hyundai Motor
Company, and now it is my great pleasure to introduce that system with
a new brand here.
Slide 1
First of all, let me show you the energy paradigm change.
Mankind has been insensitive to changes in the environment, using coal
and oil as its main sources of energy from the 19th to 20th century.
But 21st Century is different. Sustainable energy sources such as solar
and wind power, with low-cost than before, is driving industrial changes.
But in order for this renewable energy to be used comfortably in our
daily lives, it can only be done through hydrogen.
Because renewable energy is intermittent, we need a medium to easily
store the energy and use it when we need.
Therefore, electric vehicles that use renewable energy directly and fuel
cell electric vehicles that can use hydrogen made through renewable
energy will become popular in the future.
Now we're at that starting point, and our future will be determined
depending on who's moving faster at this point.
I'm really happy to launch our brand in this critical era.
Slide 2
Many countries have long recognized the importance of hydrogen, but
have not yet announced it or officially declared it.
As you can see in this chapter, by 2020, the European Union and
Germany announced their policy of going to hydrogen society.
I've been at Hyundai for 18 years, but I think there are more changes this
year than the 17 years I've been doing so far.
To explain this change, many companies in the traditional energy
business, are announcing that they will invest in hydrogen and
renewable energy, and many investors are asking where they will invest
in the future.
And I believe that this will continue in the coming years.
Slide 3
Hyundai Motor recognized that hydrogen will play a key role in the future
when it began developing fuel cells in 1998, and has consistently
invested.
As a result, we became the first company in the world to mass-produce
fuel cell vehicles in 2013, and in 2018, we launched Nexo, which has
comparable performance and durability to conventional internal
combustion engine vehicles.
And this year, we have mass-produced hydrogen electric buses and
developed a hydrogen electric truck called Xcient Fuel Cell and exported
it to Switzerland.
If you look at the technical level of Hyundai Motor Company, we're not
perfect in every aspect. We can see the technology development phase
of the fuel cell, not just the fuel cell, but all the technology development
stages in three stages.
The first step is to develop performance.
The second step is to satisfy the durability.
And lastly, we need to reduce costs and achieve popularization.
We have reached first two stages in passenger vehicles and we are
focusing on cost-reduction.
Commercial vehicles are still in the second step, developing durability.
So far, we’ve not yet satisfied enough durability. We are trying to develop
a commercial fuel cell system that satisfies the durability within the next
two to three years.
For UAM, we're still in the performance development phase. Because
UAM requires great power density.
So, we're working on the concept design and how to apply fuel cells into
the UAM.
Slide 4
Once all of these technologies are developed, we can apply fuel cells not
only to cars but also to non-automobile areas.
Ships, trains, and emergency power generation, and ultimately, UAM,
Urban Air Mobility will be the application fields. And we're trying to push
our business forward in all of these areas.
Slide 5
The fuel cell system went through the stage of core technology
development before 2012, and the stage of mass production from 2013
to 2020.
And now we plans to start the business in earnest from 2021 with the
system we have been developing.
Slide 6
HMC’s commitment to the system business is also shown in its already
announced strategic partnerships with hydrogen/energy/logistics
companies worldwide.
With Aramco, we are cooperating for FCEV supply and R&D on carbon
fiber.
And with INEOS, the world 5th chemical corporation, we are cooperating
for FCEV development and EU’s hydrogen supply.
Cummins, the first partner in our fuel cell business field, we are working
together for the commercial vehicles as well as generators.
And also with GRZ technologies, we are cooperating for generation
sector.
With many other companies, which I can’t publically mention yet, we are
continuously exploring ways to soft land hydrogen society.
We will let you know about the partnerships step by step.
Slide 7
In 2017, we launched Hydrogen Council globally.
The first start was 13 companies, and Hyundai Motor Company served as
a co-chairman.
But now there are more than 90 global companies, and this council
members are the CEO of each company.
These companies can be our partners, our competitors, and our
customers in the future.
We are leading the hydrogen society, setting goals, and presenting
policy directions around the Hydrogen Council.
Slide 8
We will start fuel cell system business in four major hubs around the
world. And will expand the business from these areas.
First, Korea, we consider it as an important basement of FCEV supply
and test bed of our fuel cell system.
In Europe, we will expand our system business through collaboration
with a variety of companies.
And in the United States, various activities will be carried out in response
to the new government's environmental and renewable energy policies.
Lastly, China is the fastest market. We are planning to preoccupy a
leading position in the hydrogen market and strategically advance into
the market.
Slide 9
With our will to scale up system business globally based on our world's
best hydrogen fuel cell technology, I'd like to introduce HMC's hydrogen
fuel cell system brand, HTWO.
Slide 10
HTWO was named after these two Hs, Hydrogen and Humanity.
Hydrogen is not just energy. It's the first step in materializing renewable
energy.
We can materialize solar energy to make many other materials, and the
first step is hydrogen, and hydrogen is still recognized as the most basic
element in the chemical field.
We've been thinking about the benefits of this hydrogen, what direction
we can develop for ourselves, and we're going to move forward on the
basis of these two axes.
Slide 11
Then, you'll be wondering what we're going to do with, we have a Nexo
fuel cell system.
We've improved performance, durability, and price competitiveness
compared to the past. But this is an early stage.
We need to move on to the next step in order to do business in earnest,
and the system we're preparing for this is an general type fuel cell
system.
As I said before, our goal is to lower the cost of this system.
The goal of this system is to make it more popular based on price
competitiveness.
And based on this, we're developing a high-durability and high-power
system.
The main purpose of this system is for large trucks.
We have a fuel cell in our truck to Switzerland right now, but there are
two Nexo systems in that.
The combined output of these two systems is about 180 kW, which is
about half the output of diesel engines used in large trucks today.
So we're developing a system that has twice the power of a Nexo fuel
cell system, and with combining two system, we can generate about
360kW of power.
Another system we are developing is for the UAM, the aircraft, through
lightening and high performance.
We're showing you a veiled system right now, but we'll probably have a
chance to explain how we plan to achieve the detailed technical aspects
in the near future.
Slide 12
This is the vision of Hyundai Motor Company, and also the HTWO brand’s
vision.
We will make hydrogen energy exist everywhere in our lives.
Our brand HTWO is simply H2 in terms of the chemical symbol, and it
also means the two H, Hydrogen and Humanity as I mentioned before.
Meanwhile, we believe that the HTWO brand can have these meanings,
H : Hydropgen, T : Technology, W : Worldwide, O : Operator
We want our customers to remember the name of HTWO as a Hydropen
Technology Worldwide Operator.
I would appreciate it if you could remember our brand as an operator
anywhere in the world by developing not only fuel cells but also
hydrogen technologies.
Thank you.
Strategy 2025
Hello, this is Won Hee Lee, President and CEO of Hyundai Motor.
Today, we will outline some of the notable achievements we have made
thus far in executing our Strategy 2025, as well as announce some of the
revised strategic direction resulting from the recent outbreak of COVID-
19 pandemic.
Slide 1
For Hyundai Motor Company, we view 2020 as the year that laid the
foundation for growth for the next 5 years in implementing our Strategy
2025 despite being faced with a challenging business environment due to
COVID-19.
Slide 2
Under the Balanced & Steady strategy of pursuing a balance between
profitability and growth, the smart mobility device business expanded its
lineup of high-margin SUVs and Genesis, while also expanding its global
market share.
In addition, we have pursued a full-fledged initiative to lead the
electrification market, achieved top 3 global EV sales position, and
launched our EV brand IONIQ in line with the launch of Ioniq5, an EV
based on a dedicated platform scheduled to be launched next year.
Also, as a leading hydrogen fuel cell EV company, we commercialized the
world’s first mass-produced hydrogen fuel cell commercial vehicles.
Slide 3
In the device-connected smart mobility service business, it was a year to
materialize a business model with high growth potential.
First, the product/service package business area started its operation at
the end of last year after establishing a specialized subsidiary called
‘Motion’, where we started selling Fleet Management Solutions (FMS) to
small and medium sized rental car companies. For individual customers,
we launched a subscription service ‘Hyundai Selection’ in April of this
year, where we were able to gather more than 6,000 members during the
initial launch, achieving average utilization rate of about 95%, which is
much higher than that of our competitors.
In addition, using our integrated mobility platform, we have launched and
operated ‘Hyundai/Genesis Developers’, which is an open data service
provided in the form of API of customer/vehicle data to 3rd parties.
So far, more than 100 partners have been secured, and 14 service areas
such as UBI insurance and in-vehicle shopping/purchasing have been
offered to customers. Hyundai Motor Company plans to provide
customers with new vehicle experience and strengthen the mobility
service ecosystem through continuous expansion of partner companies.
Slide 4
Next, I would like to talk about how the previous year’s achievements can
be developed and connected to the future of Hyundai Motor Company in
2025.
We see three major changes due to the pandemic.
First, the importance and value of ESG on the customer side is growing.
As the awareness that environmental issues have an impact on human
survival is expanding, so are customer demands for corporate
sustainability management.
In terms of industrial basis, digital transformation of the automotive
industry is expected to accelerate as untact digital form becomes a
common daily phenomenon.
In addition, due to the proliferation of the Green New Deal policy of each
government, the speed of energy shift from fossil fuel energy to electric
energy is accelerated, and we expect the hydrogen economy to emerge
as related investments expand significantly.
In response to these changes in customers and the automobile industry,
Hyundai Motor Company has implemented Strategy 2025 update.
Slide 5
Today, customers are showing customized consumption patterns and
purchase products from companies that are trusted and adhere to
sustainable management.
Hyundai Motor Company will pursue the ‘Smart Moving Experience’ as a
customer value while securing ‘Quality’, which is the basis of customer
trust, as a top priority. Overall, this will provide a digitally personalized and
sustainable moving experience.
In particular, in this Strategy 2025 update, we intend to provide eco-
friendly mobility devices and services to customers in the future by adding
‘coexistence of human and nature’ as a new differentiated value.
Based on these core basic values and differentiated values, Hyundai
Motor Company will realize a Quality Time that makes all our customers
valuable.
Slide 6
One of the key points to last year’s Strategy 2025 was the shift from
traditional auto manufacturer to becoming a mobility services solution
provider
In addition, in this Strategy 2025 update, our fuel cell-based hydrogen
business known as ‘H2 Solution”, has been added as a new business axis.
Going forward, Hyundai Motor Company will pursue mid-to-long term
strategies under these three business structures and strategic directions.
Slide 7
In the smart mobility device and service business, we plan to accelerate
the digital transformation of value chains, products, and business models
with the goal of providing optimized vehicles and services based on
customer data.
First, we will enhance our digital capabilities in all areas of the value chain,
including expanding the introduction of virtual development processes,
building smart factories, and expanding contactless sales/service
channels in all regions. This is already in Korea, as well as Singapore,
Germany, Spain, etc, and is being materialized by communicating directly
with customers in the region.
Devices that are offered to customers through value chain digitization is
expected to include OTA and FoD services, and a highly autonomous
driving function developed jointly with our JV Motional.
Also, we plan to expand the mobility service business based on the
integrated mobility platform, expand the scope of providing mobility
services based on local communities, and diversify the business model for
creating added value using vehicle data.
Slide 8
In the newly added H2 Solution business, in addition to FCEV vehicle
development, we are expanding the fuel cell system business to lead the
group’s hydrogen eco system initiative
To this end, we plan to expand the scope of application by replacing
existing internal combustion engines in all transportation areas such as
ships, trains, and UAM, in addition to partnering and selling our fuel cell
system to other automakers. Along with this, the performance of our fuel
cell system will have an industry competitive edge regarding durability
and efficiency.
Slide 9
We can summarize the direction of the updated Strategy 2025 as follows:
(1) expand customer trust through ‘quality’; (2) actively promote H2
Solution business through business structure change; and (3) take
advantage of digital transformation opportunities by way of changes in
business models and business activities.
Slide 10
With the goal of making every customer’s time valuable through our
Strategy 2025, Hyundai Motor Company will continue to promote
transition to a smart mobility solution provider and successful
establishment of the new fuel cell business.
Business & Financial Target
Now let me move on to our financial targets.
Slide 1
Despite sluggish demand resulting from the outbreak of COVID-19 in
2020, we were able to expand our market share in major regions and
continued to improve our mix, leading to a viable fundamental
improvement.
Accordingly, the operating profit of the automotive division in the first
nine months of this year, excluding one-off expenses, achieved the same
level of profitability as the previous year despite a decrease in sales.
In the 4th quarter of this year, we are faced with increasing uncertainties
due to renowned threat from COVID-19 and unfavorable F/X rate.
Nevertheless, we will make our best effort to sustain the profit
improvement trend.
Slide 2
Next is our outlook for 2021.
In 2021, the global auto demand is forecast to grow by more than 10%
year-on-year. We plan to continue to expand our market share through
new model launches as global sales of new cars launched in the 2nd half
of this year will be in full swing. Detailed sales targets will be announced
early next year.
Our 2021 operating profit margin target for the automotive division is 4-
5%.
We will continue to improve product mix in 2021 by strengthening the
Genesis brand line-up and enhancing our overall SUV lineups with models
such as the all new Tucson and Creta, and facelift models of the Kona and
Santa Fe. By accelerating cost innovation, such as expanding
commonization and reducing material costs for EVs, we will offset the
negative impacts from the unfavorable F/X environment and the increase
in the proportion of eco-friendly cars, and actively pursue profitability
recovery in 2021.
Slide 3
Now let me talk about our mid-to-long term financial targets.
After recovering our global market share to 5% in 2019, we will continue
to pursue our goal of gradually increasing our share in the mid-to-long
term.
However, due to the increased volatility and COVID-19 uncertainty, the
outlook for auto demand is also uncertain, which is inevitably leading to
adjustments of mid-to-long term targets for most automakers as well,
including us.
The global auto demand outlook for 2022 and 2025 declined more than
10% compared to the pre-COVID-19 forecasts, and it is also likely to
worsen further due to the low growth trend.
Accordingly, we have also lowered our mid-to-long term sales
estimates, and as a result, we have lowered our 2022 automotive
division’s operating profit target from 7% to 5.5%. Nevertheless, we will
continue to pursue our 8% margin target in 2025. To this end, along with
company-wide cost innovation efforts, we will actively look for ways to
enhance profitability.
Meanwhile, we plan to maintain our mid-to-long term investment plans
to secure future competitiveness. I will discuss this in more detail later.
Slide 4
Next is our mid-to-long term profit strategy.
This year, we have witnessed that the internal combustion engine’s
profitability fundamentals have improved significantly through improved
product mix and reduced sales-related expenses. By 2022, we will target
to achieve operating profit margin of more than 5% for our automotive
division by improving our cost structure through cost innovation efforts,
and secure financial resources to expand our electrification lineups and
establish a strong foundation for future new business.
In the case of EVs, we plan to respond to the expansion of electrification
and strengthen our market presence through launch of a dedicated EV
platform in 2021. In particular, we are developing a new EV architecture
to achieve profitability that would be on par with the level of profitability
achieved in 2025 from internal combustion engines. Moreover, we will
actively enhance competitiveness in all stages of our business such as
development, production, and sales.
In the case of future new business, we still need time to generate a
meaningful profit. We have included our hydrogen business as one of our
core 2025 strategy, and we are continuing to check our strategic direction
of future new businesses as well as the paradigm change caused by
COVID-19.
Slide 5
Next, is our mid-to-long term investment plan.
From 2020 to 2025, the total investment plan is 60.1 trillion KRW, of which
36.6 trillion KRW is to strengthen our competitiveness of existing business,
and 23.5 trillion KRW is to secure future business capabilities.
Despite the deterioration of the business environment due to COVID-19,
the total investment amount is similar to the previously announced
amount of 61.1 trillion KRW, and in terms of future investment alone, it
increased by 3.5 trillion KRW to 23.5 trillion KRW.
Especially, due to the full-scale promotion of the hydrogen business and
the expansion of the electrification line-up, investments related to
electrification and hydrogen business increased meaningfully from 10.4
trillion KRW to 14.9 trillion KRW.
Meanwhile, our new investment amount for our existing businesses
decreased by 4.5 trillion KRW over our previously announced plan
primarily due to the reduction of investment costs due to COVID-19,
reduction of investments in internal combustion engines, and
adjustments of the strategic investment portions.
Slide 6
Looking at the annual free cash flows, we expect to incur net cash outflow
in 2020 and 2021 due to increased investments. However, from 2022
onwards, we expect to return to net positive cash flow as we anticipate
our profit recovery should exceed investment requirements.
Slide 7
Next, I will talk about strategies to improve cost competitiveness to
achieve our mid-to-long term financial targets.
We previously mentioned our plan to save 34.5 trillion KRW over 5 years
through our Cost Innovation Committee such as regional cost
optimization, commonization, and electrification.
This year, the Cost Innovation Committee is continuing its improvement
efforts by each sub-division and is further reinforcing existing activities by
raising the commonization rate and refining the profit strategy for future
electrification.
In addition, we expanded the area of cost improvement by adding a
subcommittee to improve complexity to further optimize our lineup and
productions. Also, we are carrying our additional cost innovation activities
such as localizing overseas sourcing for new models and reducing
material costs for our 3rd generation powertrains.
In addition to the activities of the Cost Innovation Committee, we plan to
operate an integrated organization by further strengthening our efforts to
improve cost in the pre-production/sales stages. This will be achieved
by expanding the area of cost management from material cost to
manufacturing cost and sales and management cost.
Also, we are planning to increase the efficiency of cost savings by
expanding the cost target management on parts. In the past each part was
managed by individual vehicles; however, going forward, the cost target
for parts, which was established in the early stages of development, will
be expanded to all other vehicles.
Slide 8
Now let me discuss our reduction targets of the Cost Innovation
Committee.
We have expanded the existing 2018 to 2022 target of 34.5 trillion KRW to
41.0 trillion KRW, which is the amount for 2018 to 2025.
The new target reflects the effect of volume reductions due to the impact
of COVID-19, as well as additionally adjusted portions of the Genesis
brand sales and marketing related cost targets resulting from the
intensifying competition arising from the global economic slowdown. In
addition, the trend of increasing quality cost was also reflected.
In order to achieve this goal, we will continue our efforts to innovate
company-wide costs throughout the value chain, while continuing to
review additional improvements.
Slide 9
Lastly, let me talk about our shareholder return policy.
For the past five years, we have maintained a dividend payout ratio of over
30% despite the deteriorating external business environment and lower
profitability.
In 2020, we suspended interim dividends due to the need to secure
liquidity amidst COVID-19, and we plan to review our annual dividends in
consideration of the liquidity aspect and earnings recovery trend. In the
short term, we are still faced with a decreasing cashflow until 2021
leading to liquidity burden on top of concerns regarding external
uncertainties. However, we will implement a flexible shareholder return
policy in consideration of maintaining a balance between investors’
demand and timely investments.
Slide 10
To recap the updated management targets, we plan to achieve operating
profit margin of 4~5% in the automotive division in 2021 driven by a
recovery in sales and mix, and in consideration of changes due to the
COVID-19 related demand outlook, we have adjusted downwards our
mid-to-long term operating profit margin target to 5.5% in 2022, but plan
to continue to pursue the 8% target by 2025. Accordingly, the ROE targets
are 7.5% in 2022 and 9.5% in 2025.
Finally, we will pursue a mid-to-long term investment plan of 60.1 trillion
KRW and promise once again that we will continue to actively improve our
profitability and solidify the foundation for a sustainable growth in the
future.
Thank you.