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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

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Page 1: HMC Future Mobility - Hyundai

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

Page 2: HMC Future Mobility - Hyundai

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

Page 3: HMC Future Mobility - Hyundai

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.

Page 4: HMC Future Mobility - Hyundai

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.

Page 5: HMC Future Mobility - Hyundai

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

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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.

Page 7: HMC Future Mobility - Hyundai

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.

Page 8: HMC Future Mobility - Hyundai

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.

Page 9: HMC Future Mobility - Hyundai

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

Page 10: HMC Future Mobility - Hyundai

- 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

Page 11: HMC Future Mobility - Hyundai

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

Page 12: HMC Future Mobility - Hyundai

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

Page 13: HMC Future Mobility - Hyundai

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.

Page 14: HMC Future Mobility - Hyundai

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.

Page 15: HMC Future Mobility - Hyundai

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,

Page 16: HMC Future Mobility - Hyundai

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

Page 17: HMC Future Mobility - Hyundai

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

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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.

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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

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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.

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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.

Page 22: HMC Future Mobility - Hyundai

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.

Page 23: HMC Future Mobility - Hyundai

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

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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

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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.

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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

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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

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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.

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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.

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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

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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

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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

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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.

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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

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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.

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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.

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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

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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

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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

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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.