Hyundai Motor to Build Electric Vehicle-Only Factory in Korea... Construction Starts Next Year, Operation Begins the Year After (Comprehensive)

Domestic Factory Construction After 29 Years
Completion and Mass Production Targeted for 2025
Kia Also Builds New Factory at Hwaseong Plant
Labor and Management Collaborate on Production Efficiency, Quality Improvement
Efforts to Discuss Workforce Reassignment and Placement

The dedicated electric vehicle Ioniq 5 being produced at Hyundai Motor Company's Ulsan plant. The existing internal combustion engine production line has been modified to manufacture electric vehicles.

[Asia Economy Reporter Choi Dae-yeol] Hyundai Motor Company has decided to build a dedicated electric vehicle (EV) factory aiming to start operations in 2025. If the new factory is established, it will be Hyundai's first new plant in 29 years since the Asan Plant began operations in 1996. It is also highly likely to be the first EV-only factory under the Hyundai name. Amid the upheaval in the automotive industry, the company has been reviewing domestic investment plans, and the labor union has been demanding an expansion of domestic jobs in line with the electrification transition, resulting in aligned interests between both parties.

According to the industry on the 12th, a special agreement on future domestic factory investments containing these details was prepared during the 15th negotiation between Hyundai Motor's labor and management held the previous day. Accordingly, construction of the dedicated EV factory will begin in 2023, be completed in 2025, and immediately start mass production. It will be the fourth domestic factory. Hyundai currently operates the Ulsan Plant (1968, Plants 1-5), the Jeonju Plant producing commercial vehicles (1995), and the Asan Plant mainly producing sedan models (1996) in South Korea.

The dedicated electric vehicle Ioniq 5 being produced at Hyundai Motor Company's Ulsan plant. The existing internal combustion engine production line has been modified to manufacture electric vehicles.

During this year's wage negotiations, despite significant disagreements leading the union to approve a strike and the Central Labor Relations Commission issuing a suspension of mediation, behind-the-scenes talks have continued. Although conflicts over wages and domestic and overseas investment plans have occurred, both the company and the union found it undesirable for investment plans to be delayed, leading to a difficult compromise. The meeting ended close to midnight.

Along with the existing Ulsan Plant and ongoing discussions with local state governments, the new factory is expected to become one of Hyundai Motor's global EV production hubs. The U.S. EV factory is also planned to begin construction next year with a goal to start operations in 2025. Kia, a group affiliate, is also set to add a new factory at its Hwaseong Plant to produce purpose-built vehicles (PBVs), operating the dedicated EV factory from 2025.

Overview of Kia Hwaseong Plant. Labor and management are negotiating to build a new factory for purpose-built electric vehicles.

Hyundai Motor and Kia have set a target to produce about 350,000 EVs domestically this year and increase that to 3.23 million by 2030. The primary role will be handled domestically. As EV demand rapidly grows in Europe, the U.S., and other regions, the need to establish local production systems has increased. However, since developing and manufacturing finished vehicles is not something that can be achieved by just one or two companies' capabilities, the company has decided to strengthen its domestic production base. Hyundai plans to sequentially rebuild its older factories to enable smooth EV production.

Along with facility investments, advanced production and quality systems will be introduced. Measures to guarantee employment in the internal combustion engine powertrain sector, which is expected to see declining demand, and job transition training linked to industrial transformation will also be prepared. The labor union will work to negotiate various matters related to these investment plans, including improving global-level production efficiency and quality assurance, model transfers, workforce redeployment, pre-mass production training, adjusting input ratios after mass production, and production linked to market demand.

May 10th, the Hyundai Motor labor-management wage negotiation meeting introductory session

Additionally, labor and management have agreed to hold an annual briefing session on future new businesses. They will also establish a labor-management consultative body for domestic factory internal and external risk response, with representatives from both sides attending quarterly regular meetings. This is to share industrial trends, safety, production, and quality indicators on an ongoing basis. Hyundai Motor Group's three affiliates?Hyundai Motor, Kia, and Hyundai Mobis?announced in May that they will invest 63 trillion won domestically by 2025.

A company official said, "Despite internal and external risks such as the industrial transition and global economic downturn, labor and management have made a decision to coexist focusing on the future vision of domestic factories and employment stability. Even amid uncertainties in the business environment, labor and management will join forces to ensure that domestic sites serve as global hubs and lead future industries."

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