In a candid executive dialogue, Sarwant Singh—our President & Chief Commercial Officer—had a discussion with José Muñoz, who leads Hyundai Motor Group as President and CEO, to explore the evolving landscape of transportation, diving deep into how Hyundai is strategically positioning itself for the seismic shifts reshaping the automotive world. Covering everything from emerging mobility trends to Hyundai's cutting-edge strategies in managing a rapidly evolving industry, their discussion offers a rare glimpse into the strategic thinking behind one of the world's automotive giants as it adapts to changes in the automotive industry.
*For the complete article, visit Forbes.com, and follow Sarwant for more thought-provoking articles on the developments and trends impacting the automotive industry.
I see several megatrends converging that will fundamentally reshape mobility in the coming decade. First, the rapid advancement of AI and digital connectivity is transforming how people interact with vehicles. This isn't just about infotainment—it's about creating safer, more personalized experiences through predictive maintenance, advanced driver assistance, and entirely new mobility services.
The diverging economic realities around the world are creating different mobility needs across markets. This requires us to be flexible in our approach.
Demographic shifts are equally important. Gen Z and millennials have different expectations about mobility, ownership, and sustainability than previous generations. At the same time, we have aging populations with unique accessibility needs.
Geopolitical factors are reshaping supply chains and manufacturing decisions. At Hyundai, we've responded with our localization strategy—investing USD 21 billion in the US over the next four years and expanding our manufacturing footprint globally.
Energy transition and sustainability have moved from ‘nice to have’ to business imperatives. This goes beyond powertrains to encompass manufacturing, materials, and entire business models.
But if I had to highlight one trend that ties everything together, it would be the convergence of mobility and energy. Our Executive Chair's vision of ‘Progress for Humanity’ recognizes that the future of transportation is inseparable from how we generate, store, and use energy. This is why Hyundai Motor Group has diversified beyond traditional automotive into robotics with Boston Dynamics, advanced air mobility with Supernal, and hydrogen infrastructure with HTWO.
Adapting to these trends is part of our DNA. It's why we approach challenges with our ppalli-ppalli (fast-fast) culture while planning strategically with miri-miri thinking.
The most relevant trends for the future of mobility are energy transition, autonomous technology, connectivity, and changing consumer expectations.
Energy transition will require a diversified approach. We're not just betting on one technology—we're investing in BEVs, HEVs, PHEVs, hydrogen fuel cells, and exploring other alternatives. Our strategy isn't driven by regulation but by providing customers with choices that meet their specific needs. This flexibility in our powertrain portfolio is a key advantage - we can adapt quickly to market shifts while maintaining our long-term direction toward electrification.
For autonomous technology, we're taking a pragmatic approach. Through partnerships with Waymo and our ownership of Motional and 42dot, we're developing solutions that create real customer value today while building toward more advanced autonomy. The recent announcement that we'll provide a fleet of IONIQ 5 EVs to Waymo for their autonomous ride-hailing service is a perfect example.
Connectivity is transforming vehicles into digital living spaces. Cars are becoming more personalized, adaptive, and integrated with other aspects of customers' digital lives. Our investments in software-defined vehicles reflect this reality.
As for changing consumer expectations, we're seeing a desire for sustainability balanced with practicality. Gen Z and millennials want vehicles that align with their values but still meet their everyday needs. This is driving our approach to design, materials, manufacturing, and the overall ownership experience.
I believe the car of the future will be electric in some form, highly automated (though not necessarily fully autonomous in all conditions), seamlessly connected, and adaptable to different use cases. It will be more personalized than ever before—not just in terms of features but in how it integrates with a person's lifestyle.
Our business is ultimately driven by consumer demand, not regulatory mandates. That's why we maintain a diversified powertrain portfolio and will continue to do so.
The growth of hybrid sales—up 85% in the U.S. market last year for Hyundai—demonstrates that customers want options. While we remain committed to electrification, we recognize that the transition will happen at different speeds in different markets.
We're doubling our hybrid electric vehicle offerings from 7 to 14 models and plan to sell more than 1.3 million Hybrid EVs annually by 2028—more than double our original goal. This is a strategic response to market demand, not a retreat from our electrification vision.
As for hydrogen, I continue to believe it has tremendous potential, particularly for commercial applications. Hydrogen is scalable, efficient, and clean. Our XCIENT fuel cell trucks are already in commercial operation around the world, proving the viability of this technology for heavy-duty transport.
The beauty of hydrogen is that it takes us beyond mobility toward an integrated ecosystem—from production to storage, transport, and delivery. This aligns perfectly with our Executive Chair's vision of addressing both mobility and energy challenges.
Regarding eFuels, we're monitoring developments closely. They could play a role in specific applications or markets, particularly during the transition period. But our primary focus remains on battery electric and hydrogen fuel cell technologies as the core of our zero-emission strategy.
What sets Hyundai apart is our dynamic capabilities—our ability to respond quickly to market shifts while staying focused on our long-term goals. When you have the manufacturing flexibility to produce multiple powertrains on the same production line— as we do at facilities like our plant in the Czech Republic—you can adapt to changing customer preferences without sacrificing your strategic direction.
That's a compelling framework for the challenges we face. I believe the first three ‘zeros’—emissions, deaths, and congestion—represent tremendous opportunities for innovation. The fourth—zero growth—requires us to fundamentally rethink our business models.
For zero emissions, our strategy includes both battery electric and hydrogen solutions, tailored to different vehicle types and use cases. Our commitment to carbon neutrality by 2045 encompasses not just vehicle emissions but our entire value chain.
Zero deaths aligns with our commitment to safety. Through advanced driver assistance systems, connected vehicle technologies, and intelligent infrastructure, we're working toward a future where traffic fatalities become increasingly rare.
Zero congestion requires thinking beyond the vehicle to the entire mobility ecosystem. Our investments in air mobility through Supernal, autonomous systems through Motional and 42dot, and public transit solutions reflect our holistic approach.
As for zero growth in traditional vehicle sales, this is perhaps the most transformative challenge. The answer isn't to simply push more vehicles into saturated markets—it's to create new sources of value.
We're pursuing several strategies:
The automotive industry's traditional business model of selling more units each year may eventually reach its limits in mature markets. But if we view ourselves as mobility providers rather than just vehicle manufacturers, tremendous growth opportunities remain.
This challenge also underscores the importance of our Dynamic Capabilities approach—being flexible, responsive, and aligned with rapidly changing realities. By maintaining this agility, we can pivot toward new opportunities even as traditional markets evolve.
We'll continue to maintain a broad portfolio while making strategic bets in high-growth segments. Our fundamentals are strong—we're building high-quality, safety-focused, eco-friendly vehicles across all major segments. This diversity gives us stability while allowing us to capture emerging opportunities.
SUVs and crossovers remain a priority given continued global demand. The success of models like Tucson, Santa Fe, and PALISADE demonstrates the strength of our offerings in this space. We'll continue to expand these lineups with diverse powertrain options— including the three-row IONIQ 9 EV, which is generating tremendous interest.
The luxury segment presents significant growth potential through our Genesis brand. In just ten years, Genesis has established itself as a legitimate luxury contender with stunning design, exceptional quality, and a distinctive brand identity. We're expanding the Genesis retail network with standalone spaces in Korea and exclusive dealerships in the U.S. The Genesis lineup will continue to grow, particularly with electric offerings like the Electrified GV70 and upcoming models.
As for pickups, the Santa Cruz has performed well in the US market, opening a new segment for Hyundai. We'll continue to evaluate opportunities to expand our presence in this category based on regional demands.
Smaller vehicles remain strategically important, especially in urban markets and for entry-level customers. The success of our new INSTER compact EV, which recently won EV World Car of the Year, demonstrates the continued relevance of this segment.
Ultimately, our product strategy is guided by customer needs rather than internal preferences. We maintain the flexibility to adjust our portfolio mix as market conditions evolve - a key component of our Dynamic Capabilities approach. Our manufacturing processes are designed to allow rapid shifts between different models and powertrains based on demand.
I do agree that 2025 will be a pivotal year for SDV launches, and I believe the frontrunners will be those companies that can seamlessly integrate hardware and software while maintaining control of the customer experience.
At Hyundai, we're taking a balanced approach. We're developing our own core software capabilities while strategically partnering with technology leaders where it makes sense. This hybrid model gives us the benefits of both worlds - control over the fundamental user experience and customer relationship, combined with the innovation and scale that comes from working with technology partners.
Our SDV strategy is built on three pillars:
First, we're developing a unified vehicle architecture that separates hardware from software, allowing for over-the-air updates and continuous improvement throughout the vehicle lifecycle. This will debut in our next-generation Connected Car Operating System.
Second, we're strengthening our internal software capabilities through our Global Software Center and strategic acquisitions. This ensures we maintain control of the critical touchpoints that define the Hyundai experience.
Third, we're forming strategic partnerships to accelerate innovation and scale. Our work with Waymo on autonomous driving technology is one example, and our recent MOU with GM explores areas where collaboration can benefit both companies.
The future of automotive isn't just about who has the best individual technologies—it's about who can integrate them most effectively into a cohesive customer experience. This is where I believe Hyundai's approach gives us an advantage.
We understand that vehicles are fundamentally different from smartphones or other consumer electronics. They require deep integration between software and hardware to ensure safety, reliability, and performance. Our decades of automotive expertise, combined with our growing software capabilities, position us well for this future.
As we move forward, you'll see Hyundai continuing to invest in both internal capabilities and strategic partnerships, maintaining the flexibility to adapt as the technology and market evolve. This reflects our ppalli-ppalli, miri-miri philosophy—moving quickly while thinking strategically.
You're right that Hyundai's strength in commercial vehicles is sometimes overlooked, but it's an area where we see tremendous opportunity for growth and innovation.
Our vision for commercial vehicles centers on providing clean, efficient, and versatile solutions that address the evolving needs of businesses and cities. The growth in e-commerce and urbanization is creating demand for new types of delivery vehicles, particularly in the ‘last mile’ segment.
We're already leading in hydrogen fuel cell commercial vehicles with our XCIENT heavy-duty trucks operating in Switzerland, Korea, and the U.S. These vehicles demonstrate the viability of hydrogen for commercial applications, offering quick refueling and long range capabilities that are essential for fleet operators.
On the electric side, the new STARIA Electric Van represents our commitment to providing zero-emission solutions for urban delivery and commercial transport. We're also developing smaller, purpose-built vehicles optimized for last-mile delivery in congested urban environments.
But perhaps most importantly, we're evolving beyond just selling commercial vehicles to providing comprehensive mobility solutions. This includes:
The commercial vehicle sector is also where our broader Hyundai Motor Group capabilities come into play. Our logistics subsidiaries provide insights into real-world operational needs, while our robotics and autonomous driving technologies open new possibilities for automation in warehousing and delivery.
I'm particularly excited about the potential for hydrogen in the commercial sector. While battery electric solutions work well for certain applications, hydrogen offers advantages for heavy-duty and long-range operations. Our HTWO division is working on hydrogen production, storage, and delivery solutions that will support the broader adoption of this technology.
As urbanization continues and e-commerce grows, Hyundai will be at the forefront of developing the commercial vehicles and mobility solutions needed to keep goods moving efficiently and sustainably.
I agree that we're entering a period where scale, technology capabilities, and capital efficiency will become increasingly important, making it challenging for smaller manufacturers to compete independently.
The automotive industry is facing unprecedented investment requirements across multiple fronts simultaneously—electrification, software development, autonomous driving, and new mobility services. This creates significant scale advantages for larger players who can amortize these investments across millions of vehicles.
We're already seeing various forms of consolidation—from full mergers to targeted partnerships focused on specific technologies. Our recent memorandum of understanding with GM to explore potential collaboration is an example of how even major manufacturers are finding areas where cooperation makes strategic sense.
Regarding Hyundai's approach to M&A, we're selective and strategic rather than pursuing growth for growth's sake. Our focus is on acquisitions and partnerships that strengthen our core capabilities or accelerate our entry into adjacent spaces. The acquisitions of Boston Dynamics in robotics and 42dot in autonomous driving technology demonstrate this approach.
For traditional automotive acquisitions, we evaluate opportunities based on whether they bring complementary capabilities, access to new markets, or technologies that would be difficult to develop internally. Any potential acquisition must align with our long-term vision and strengthen our ability to deliver Progress for Humanity.
That said, we believe in our ability to compete effectively through organic growth and targeted partnerships. Hyundai Motor Group has achieved its position as the world's third-largest automaker largely through internal development and strategic investments rather than major acquisitions.
Our current focus is on executing our 2030 Strategy with its USD 90 billion investment. This includes strengthening our position in important markets like the US and China, and in growth markets like India, South America, and Southeast Asia, accelerating our transition toward electrification, and expanding our software capabilities.
While we'll remain open to strategic opportunities that create value for our stakeholders, our priority is building on the strong foundation we've established and delivering on our ambitious growth targets for 2030.
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