The world's third-largest automaker, Hyundai Motor Group, is betting on electrification to establish itself as a leader in the industry. With an unprecedented investment of more than $16.6 billion USD in South Korea in 2025, Hyundai is setting the stage to surpass competitors like Volkswagen and Toyota.
A historic investment in the context of a crisis
Hyundai Motor Group, which includes Kia and Genesis, has announced it will invest 24.3 trillion KRW ($16.6 billion USD) in 2025, an increase of 19 percent compared to its previous record set in… 2024.
The massive new investment comes in a delicate political context in South Korea, marked by a crisis triggered after the impeachment of President Yoon Suk Yeol in December 2024. This instability has dampened consumption, leading to a 7.5 percent drop in Hyundai's domestic sales in 2024.
To counter the slowdown, Hyundai aims to strengthen its work in technological innovation and accelerate the transition to electrification.
Electrification and SDVs
Hyundai plans to invest:
- 11.5 trillion KRW ($7.9 billion USD) in R&D to improve product competitiveness, electrification, SDVs (software-defined vehicles) and hydrogen technologies.
- 12 trillion KRW ($8.2 billion USD) to increase the production of electric vehicles (EVs) and modernize manufacturing facilities in Korea.
The goal is to develop next-generation products and build factories dedicated to the production of electric vehicles.
Projects to accelerate EV production
In 2025, Hyundai plans to open a factory dedicated to large electric SUVs in Ulsan, marking a key step in domestic EV production. Kia, for its part, has already started production of the EV3 at its Gwangmyeong EVO plant and plans to start mass production of its PBV electric vans.
The United States, a priority market
Hyundai recently inaugurated a $7.6 billion EV plant in Georgia. The first model produced is the updated 2025 Ioniq 5, which offers increased range, a modernized design and compatibility with Tesla Superchargers thanks to the NACS port.
In 2025, Hyundai will also begin production of the Ioniq 9, its first three-row electric SUV, intended for the American and Korean markets. That model, eligible for the $7,500 federal tax credit, is a strategic asset for Hyundai against its competitors.
Objective: Surpass Volkswagen and Toyota
With its record investments in Korea, Hyundai Motor Group aims to increase its market share in the electric-vehicle sector and strengthen its competitiveness in SDVs and emerging technologies. More generally, the Korean automotive and economic giant wants to maintain stable growth despite the crises.
The combined efforts in Korea and internationally position Hyundai as a key player in the transformation of the automotive industry.
The final word
Hyundai's massive investment in 2025 marks a decisive step. By focusing on electrification and innovation, the South Korean manufacturer is preparing to compete with global leaders like Toyota and Volkswagen. With ambitious projects in Korea and the United States, Hyundai is establishing itself as a frontrunner in sustainable mobility.