South Korean automobile manufacturer Hyundai will reportedly reduce the number of combustion engine models in its line-up to free up resources to invest in electric vehicles (EVs).
As per the sources, the move will result in a 50 percent drop in models powered by fossil fuels as a supporting strategy was approved by high management in March.
“It is an important business move, which first and foremost allows the release of research and development (R&D) resources to focus on the rest: electric motors, batteries, fuel cells,” the sources said, without giving a timeframe for the plan.
The company stated that it was speeding up the adoption of eco-friendly vehicles such as hydrogen fuel cell vehicles and battery EVs.
The automaker also stated that it plans to gradually expand its battery EV offerings in important markets such as the US, Europe, and China, to achieve full electrification by 2040.
Hyundai, which includes Hyundai Motor Co., Kia Corp., and Genesis, expects to sell one million EVs per year by 2025 to achieve a 10 percent share of the global EV market.
Faced with tighter CO2 emission targets in Europe and China, all major automakers are speeding up their transition to EVs.
The high expense of developing electric motors and improving the range of car batteries has already prompted some to say their days of investing in traditional engines are numbered.
The sources said that “Hyundai has stopped developing new powertrains for internal combustion engine cars.”
France-based PSA Group announced in November that it will no longer invest in combustion engines, shortly before merging with Fiat Chrysler to form Stellantis.
Some automakers have already announced their intentions to go electric, with Sweden’s Volvo, which is owned by China’s Geely, stating that it will do so by 2030.
The move is particularly important for Hyundai, which, along with Kia, is one of the world’s top 10 auto groups, because it boasts one of the industry’s broadest ranges of engine and gearbox technologies.
According to sources, the company will finalize its plan to move to all-electric models over the next six months. Hyundai announced in April that it would reduce the number of gasoline models it offers in China to 14 from 21 by 2025 while launching new electric models every year beginning in 2022.
The company announced in February that it was no longer in negotiations with tech giant Apple about developing an autonomous vehicle.
According to sources, the concept of the company becoming a contract manufacturer for Apple encountered strong internal opposition.