Know Why General Motors and Hyundai Collaborating

General Motors (GM) and Hyundai Motor Co. announced on Thursday that they have entered discussions to explore future collaboration across several key strategic areas. The collaboration will focus on joint vehicle development, addressing supply chain challenges, and advancing clean-energy technologies.

The automotive industry is facing significant capital costs, amounting to tens of billions of dollars, as companies strive to develop electric vehicles (EVs), batteries, and self-driving technologies. In addition to meeting increasingly stringent emissions regulations, automakers are competing on a global scale to secure supply chains and build new EVs.

Memorandum of Understanding (MoU)

Both automakers have signed a non-binding memorandum of understanding (MoU) to investigate potential synergies. The goal is to leverage their combined scale and strengths to reduce costs, speed up the development of new vehicles, and introduce cutting-edge technologies to the market more quickly.

Potential Collaboration

GM and Hyundai have identified several potential collaboration projects, which include the joint development and production of passenger and commercial vehicles. These projects will also focus on internal combustion engines (ICE), clean-energy solutions, and advancing electric and hydrogen technologies.

The two companies plan to assess opportunities for combined sourcing in crucial areas like battery raw materials and steel. 

Leadership Remarks

Mary Barra, GM's Chair and CEO, emphasised the importance of this collaboration, stating, "Our goal is to unlock the scale and creativity of both companies to deliver even more competitive vehicles to customers faster and more efficiently."

Hyundai Motor Group Executive Chair, Euisun Chung, echoed these sentiments, highlighting that the collaboration will focus on "enhancing competitiveness in key markets and vehicle segments" while driving cost efficiencies and delivering greater value to customers.

Future Plans

Both GM and Hyundai have aggressive plans to expand their electric vehicle production in the coming years. The strategic collaboration aims to bolster their competitiveness, positioning them to better meet the demands of the evolving automotive industry.

Recent Industry Context

This partnership comes shortly after Honda Motor and GM scrapped a plan to jointly develop affordable electric vehicles. The companies had originally agreed in April 2022 to develop a series of lower-priced EVs, but the plan was discontinued in October 2023. GM and Hyundai’s collaboration reflects their ongoing commitment to driving innovation and staying competitive in a rapidly changing market.