Hyundai Motor reported a modest decrease in its operating profit for the first quarter of 2024, with figures showing a 2.3% year-on-year decline to 3.6 trillion won ($2.6 billion). This dip comes amidst a cooling global electric vehicle (EV) market, which has seen consumers increasingly opt for hybrid models. Despite the drop in operating profit, Hyundai’s revenue rose by 7.6% to 40.7 trillion won.
The South Korean automaker, which ranks as the world’s third-largest alongside its affiliate Kia, noted that these results were in line with market expectations. However, net profit also saw a slight decrease of 1.3%, totaling 3.4 trillion won for the quarter.
Hyundai’s shift in production strategy reflects changing consumer preferences, with EV sales comprising 4.5% of total auto sales in the quarter, down from 6.5% the previous year. In contrast, hybrid sales increased, now representing 9.7% of total sales, up from 8.2%. This strategic pivot is evidenced by Hyundai’s plan to integrate hybrid production lines into its new EV-focused factory in Georgia, USA, anticipating operational start in the fourth quarter of 2024.
The global EV market itself is experiencing a slowdown, with growth rates declining compared to previous years. High vehicle prices and inadequate charging infrastructure have been significant barriers. However, the International Energy Agency remains optimistic about the long-term prospects, projecting significant adoption rates in major markets by 2030.
Analysts suggest that while Hyundai faces challenges due to the current market slowdown, its early investments in EV technology place it in a competitive position for future recovery. The anticipated second-half revival of the EV market, supported by Hyundai’s upcoming initiatives, including the launch of a next-generation EV platform, are expected to bolster the company’s performance in the evolving automotive landscape.
