autoevolution
Car video reviews:
 
Hyundai Wants a Piece of the Affordable EV Market in Europe, Admits It Is Hard
Carlos Tavares already said that electric cars will kill affordable vehicles. It is not difficult to understand why: there are not enough batteries to make small EVs and still sell them at low prices. Volkswagen said its small electric cars would cost around €20,000 ($20,176 at the current exchange rate). Now Hyundai said the same, even if in a more candid way. And that raises interesting questions.

Hyundai Wants a Piece of the Affordable EV Market in Europe, Admits It Is Hard

2022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 20302022 CEO Investor Day event introduces Hyundai's EV strategy for 2030
In an interview with Automotive News Europe, Andreas-Christoph Hofmann stated that Hyundai will need an affordable B-segment EV to be able to sell cars in Europe. After 2035, all vehicles will have to ditch combustion engines on the Old Continent, and Hyundai would just be preparing for that scenario.

The company’s European marketing chief also admitted that this is something the European legislation imposes, as Tavares said with more striking words a few months ago. According to the Stellantis CEO, politicians chose electric cars, not the market.

Hofmann did not mention when Hyundai wanted to sell this new EV, but it must be in time to compete with Volkswagen from the very beginning. The German carmaker wants its B-segment electric cars to reach the market by 2025. That’s when the Martorell plant will pump out the first MEB Small vehicles for Volkswagen and Cupra: the ID.2 – or ID.1, we are yet to discover what Volkswagen’s decided to name it – and the UrbanRebel, respectively.

Curiously, the Sagunto battery factory will only deliver its products in 2026, one year after the first MEB Small products hit the market. Considering these EVs are supposed to adopt Volkswagen’s unified cells, they will have to come from Salzgitter, Germany, where these standard batteries will be manufactured starting in 2025. That shows the production cost for these “affordable EVs” will not have the aid of locally-made batteries in the first months. In other words, they will be more expensive to make than they should until Sagunto is ready.

Hyundai has not announced plans to make its own batteries. It will apparently keep on buying them from SK Innovation or LG Energy Solution. That may help it reach the market sooner than Volkswagen’s “affordable EVs,” which would only dismiss the quotations marks if compared to other electric cars. When the reference is internal-combustion-engine (ICE) competitors, they are still expensive: a Hyundai i20 costs €14,410 ($14,537) in Germany. A Seat Ibiza starts at €16,490 ($16,635).

When Volkswagen and Hyundai talk about €20,000 EVs, that’s a goal. And Hofmann recognizes it is a difficult one to attain. Small electric cars cannot have large battery packs, restraining their ranges. Ternary chemistries present more energy density but are more expensive. Affordable EVs must use LFP cells: they cost less and last more but are heavier, which reduces the range of these EVs even more.

On top of tackling these issues, automakers have to charge the least possible amount for these affordable EVs. That will happen for obvious reasons: most people who buy “cheap” cars do so because they are what they can afford. If they had more money, they would probably choose something else.

The secret to making money with these vehicles is to sell thousands, preferably millions of them. There are not enough batteries for these affordable EVs, which will raise prices for all electric cars if these automakers push too hard on volume. In other words, the very effort to make these affordable EVs may lead to all electric cars getting more expensive.

It is essential to remember that the affordable EV for Europe will be just one among eleven electric cars that Hyundai plans to bring to market by 2030, all based on its Integrated Modular Architecture (IMA). Genesis will have six EVs, and Kia will have fourteen by the same year. Summing up, we are talking about 31 new electric cars from the Hyundai Group. The Hyundai brand alone wants to sell 1.87 million EVs by 2030.

That alone will put immense pressure on battery costs. With Hyundai and Volkswagen promising to offer affordable EVs, the very model that they follow implicates even more concerns about raw materials and cell prices. We’ll try to track how that develops as close as possible.

 
 
 
 
 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories