Hyundai Gongup Expects to Secure All Interior Material Orders for US Electric Vehicles... "Best Sales and Margin Rate This Year"

As the United States begins full-scale implementation of the Inflation Reduction Act (IRA), Hyundai Motor Company is increasing the proportion of lease car sales. By establishing a joint venture (JV) with SK On for battery cells in North America, it is expected that all models produced locally in the U.S. from 2026 will benefit from the IRA.

As Hyundai Motor Group actively responds to the IRA, Hyundai Industry, which produces automotive interior materials, is gaining attention. It is the only partner company producing premium interior materials locally in the U.S., raising expectations for growth.

On the 25th, Hyundai Industry closed trading on the KOSDAQ market at 8,970 KRW, up 13.83% from the previous day.

Seogang Hyun, Vice President and Head of Hyundai Motor’s Planning and Finance Division, stated during the Q1 earnings conference call that "We are maximizing lease vehicle sales through Hyundai Capital America (HCA)." The lease ratio, which was only 5% previously, expanded to 35% as of last month, and Hyundai Motor has confirmed that electric vehicle sales in the U.S. have not decreased. According to the detailed guidelines of the IRA, electric vehicles sold for commercial use such as leases are exempt from requirements like local assembly in North America and thus qualify for subsidies.

Regarding the electric vehicle battery supply capacity of the JV established with SK On, Vice President Seogang Hyun said, "Production will start in 2025," and "We expect to sufficiently supply the models produced that year."

Hyundai Industry manufactures seat components such as seat cushions and backrests (seat pads), armrests, headrests, and side pads of seat backrests. It supplies interior products to almost all models of Hyundai Motor and Kia, including Genesis G90, G80, GV80, Grandeur, Palisade, and Sorento.

Researcher Seung-hwan Lee from ResearchAlum explained, "Among parts suppliers related to Hyundai Motor and Kia’s local electric vehicle production, Hyundai Industry will be the biggest beneficiary. Hyundai Industry is the only domestic company producing armrests, headrests, and leg rests locally in the U.S. for electric and premium vehicles."

He added, "To receive U.S. IRA subsidies, Hyundai Motor Group must contract with companies producing locally. Hyundai Industry has an advantage in bidding for orders as it can reduce transportation costs and tariffs."

Earlier this year, Hyundai Industry invested approximately 13.1 billion KRW to establish a new factory and logistics warehouse in Newnan, Georgia, USA. The factory will begin full-scale operations in the second half of this year. It mainly produces armrests, headrests, and leg rests, with an annual production capacity of 300,000 units.

Researcher Lee analyzed, "Hyundai Industry has agreed to supply parts for many electric vehicles such as Ioniq 5 and Ioniq 7, which Hyundai Motor and Kia plan to produce in the U.S. They aim to secure orders for about 10 new electric vehicle models to be mass-produced in the future." He added, "Securing orders for all new electric vehicles is entirely possible. As electric vehicles have larger interior space compared to internal combustion engine vehicles, the proportion of interior materials will also increase."

Hyundai Industry recorded sales of 278.5 billion KRW and operating profit of 15.1 billion KRW last year. Researcher Lee said, "Sales and operating profit are expected to increase compared to the previous year, and the company is anticipated to achieve the best sales and margin rates."

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