Hyundai Leaving Combustion Engines As It Moves Towards EVs [UPDATE]

Automotive manufacturers worldwide are beginning a transition that will see the end of combustion-engine vehicles and the dawn of the pure electric vehicle era. As part of that transition for Korean automotive manufacturer Hyundai, it has confirmed that it will end the development of any new combustion engines. By ending the development of combustion engines, the company will accelerate its move towards being an EV-only manufacturer. UPDATE: Hyundai has Refuted this report, at least in part.

The Korea Economic Daily cites sources who claim Hyundai Motor Co shuttered its combustion-engine research and development center on December 23. About 12,000 employees worked in that division. Becoming a pure electric vehicle manufacturer is a big change for Hyundai as most of its vehicles today utilize traditional combustion engines.

Hyundai has been developing its combustion engines since 1983. The first engine produced exclusively by Hyundai debuted in 1991 and was known as Alpha. The automaker credits developing its own engines with helping it to rise from a little-known company to one of the top five automotive manufacturers in the world.

While it's unclear if any of the 12,000 employees working in the engine development division were let go due to the transition, the automaker said that teams focusing on powertrain development would be transitioned to electric systems development. However, some engine development specialists will continue to modify existing engines. Hyundai, like most automakers, is still several years from completing its electric vehicle transition.

EV Transition

As part of the transition to an electric vehicle manufacturer, the existing powertrain system development centers are being converted to electrification test centers. Hyundai operated a powertrain performance development center, which is transitioning to an electrification performance development center. Automotive fans have found over the years since the first electric vehicles debuted that EVs can have significantly better performance than an internal combustion engine vehicle. That improved performance is thanks in large part to the ability of electric motors to produce 100 percent of their torque as soon as you step on the throttle.

Another major component of the Hyundai EV transition plan is establishing a new battery development center. Batteries are the most critical component of an electric vehicle, and significant amounts of money and research effort are invested into improving batteries. One significant differentiating factor between brands is the electric driving range, and improving battery technology is critical to that. Hyundai intends to transition to electric vehicle development only as quickly as possible.

EV Goals

As part of its electric vehicle transition, Hyundai has offered some goals to highlight its aggressive transition. By 2026, Hyundai Motor and sister company Kia plan to sell 1.7 million electric vehicles globally. It represents almost twice its goal of selling 1 million EVs globally by 2025. Hyundai and Kia have shared vehicles and platforms for a long time. The main difference between the vehicles the two automakers offer typically comes down to slight changes in trim and styling.

Presumably, this will continue to be the case as the companies transition to electric vehicles. With government mandates pushing buyers to electric vehicles in place worldwide, electric vehicles are expected to dominate the automotive market by 2030. That prediction is a stark change to forecasts made in 2020 that predicted electric vehicles to account for only half the overall automotive market by 2040. It remains to be seen if electric vehicle transition timelines stay in effect should the US have a different administration in the White House in the next election.

EV Transition Challenges

Like other automotive manufacturers, Hyundai does face some significant challenges in its EV transition. Two of the biggest challenges today for electric vehicle manufacturing are sourcing raw materials to build batteries and semiconductors, which are in very short supply due to the ongoing pandemic. Hyundai has stated that its new R&D center will focus on securing raw materials for batteries and semiconductors.

Currently, many new electric vehicles are in short supply because of bottlenecks in securing batteries and semiconductors. Ford, for instance, has faced supply constraints for its Mustang Mach-E and its new small Maverick Hybrid pickup due to battery and semiconductor supply issues. Unfortunately for shoppers in the market for an electric vehicle, tight supply means many have to settle for conventional combustion-powered vehicles or pay significantly over MSRP to secure an electric vehicle.

Current excessive dealer markups and soaring prices on used vehicles are pushing some buyers away from hybrids and electric vehicles and back to traditional gasoline or diesel-powered cars, trucks, and SUVs. There's still no clear indication when battery and semiconductor constraints will be lifted.