"Electric Vehicles, Production Capacity Determined After Semiconductor Shortage" Auto Industry Strengthens Endurance

Parts Supply Still Delayed Causing Production Disruptions
Normalization Expected Around Next Year... Increased Production Capacity
Existing Factories Transition to Electric Vehicles and Launch Dedicated Plants

The Hummer electric vehicle (EV) from GMC, a subsidiary brand of General Motors (GM) in the United States. It is produced at Factory Zero, an electric vehicle-only plant in Detroit, Michigan.

[Asia Economy Reporter Choi Dae-yeol] Tesla sold about 1 million pure electric vehicles (BEVs) last year. While this falls short of the total vehicle sales of Toyota and Volkswagen, which surpassed 10 million units several years ago, Tesla leads by a wide margin when considering only electrified vehicles.

In the first quarter of this year, Tesla's production and sales reached 300,000 units, a 70% increase compared to the same period last year. Despite ongoing global supply chain challenges for components such as automotive semiconductors and unexpected variables like the Russian invasion and COVID-19 shutdowns, Tesla CEO Elon Musk expects significant growth again this year.

Tesla has demonstrated unprecedented moves in the entire automotive business, including vehicle development, production, and sales. Overcoming recent challenges with integrated body structures, proprietary battery designs, and software redesigns, Tesla has significantly increased production volume. The company recently announced first-quarter results and expressed confidence in achieving its annual target of 1.5 million units. This is supported by the operation of new factories in Germany (Berlin) and the United States (Austin), as well as the partial resumption of the Shanghai plant following the lifting of shutdowns.

Volkswagen electric vehicle ID.3 being produced at the Dresden plant in Germany

Traditional automakers are also accelerating their electrification transitions and gradually delivering results. Although semiconductor and other component supplies are not yet stable enough to run production lines at full capacity, they anticipate that supply systems will be fully operational by the end of this year or early next year, prompting proactive measures. Volkswagen has decided to build a new electric vehicle-dedicated factory near its headquarters to produce new electric vehicles scheduled for release around 2026. The plan aims to double productivity compared to the world’s best internal combustion engine plants by reducing production time per vehicle to about 10 hours.

General Motors (GM)’s premium brand Cadillac began mass production of its first electric SUV, the Lyriq, last month at its Tennessee plant in the United States. This came just a year and a half after announcing its electrification investment plan in 2020. The Hamtramck plant, once one of GM’s flagship factories, has been transformed into an electric vehicle-only plant named ‘Factory Zero.’ GMC’s Hummer electric vehicle (EV), primarily a pickup truck, is scheduled for release next year.

Elon Musk, CEO of Tesla, dancing at the opening event of the Tesla Berlin Gigafactory held last month

Hyundai Motor Group is also converting existing facilities and internally refining plans for new factories in line with its mid- to long-term electrification strategy. Alongside converting domestic plants to enable electric vehicle production, Hyundai started EV production at its Asan plant following the Ulsan plant. The second dedicated electric vehicle, the Ioniq 6, which began production in February this year, is set to launch in the second half of this year.

Kia is negotiating with labor unions to begin parallel production of the dedicated electric vehicle EV6 at its Hwaseong Plant 2 within this year. Currently, production is limited to Plant 3. Hwaseong has also effectively finalized plans to add a new factory in addition to Plants 1 through 3. The new factory is likely to operate as an electric vehicle plant for purpose-built mobility (PBV), a project promoted at the group level.

EV6 being produced at Kia Hwaseong Plant. Kia's first dedicated electric vehicle and the top export model among domestic electric cars.

At Kia’s Gwangmyeong plant, which produces models like the Carnival and Pride, discussions with the labor union are underway to produce a mid-size electric SUV. Once electric vehicle production begins at Gwangmyeong, Kia will manufacture EVs at all three of its major domestic plants (Hwaseong, Gwangju, and Gwangmyeong).

Hyundai and Kia’s overseas electric vehicle production bases are also increasing one by one. Following the start of Ioniq 5 mass production at the Indonesia plant earlier this year, the U.S. plant is set to begin production of the GV70 electric vehicle by the end of this year. Hyundai Motor Group currently does not have a dedicated electric vehicle factory overseas but is reportedly considering establishing one in key foreign markets. While some plants in the Czech Republic, India, and China have electric vehicle lineups, these are based on existing internal combustion engine platforms, resulting in minimal production volumes.

This content was produced with the assistance of AI translation services.