The gap between the US and China creates a fast track for Hyundai
The gap between the US and China creates a fast track for Hyundai

The gap between the US and China creates a fast track for Hyundai

US President Joe Biden comments with Hyundai Motor Group Chairman Euisun Chung on the automaker’s decision to build a new electric car and battery factory in Savannah, Georgia, as Biden concludes his visit to Seoul, South Korea, on May 22, 2022. REUTERS / Jonathan Ernst – RC22CU9T5XOJ

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HONG KONG, May 23 (Reuters Breakingviews) – Hyundai Motors gets a boost from closer ties between the US and South Korea. Last week, President Joe Biden launched his inaugural tour of Asia in Seoul Read more , signaling deeper economic and military cooperation between the Allies. His counterpart, newly elected President Yoon Suk-Yeol, will benefit from less dependence on China for trade. The price for Hyundai and peers will be a greater presence in US markets.

As part of Washington’s campaign to strengthen supply chains and compete with China, Biden is suing Samsung Electronics’ business leaders (005930.KS) Jay Y. Lee to Euisun Chung of Hyundai Motors. Sunday, the US President personally thanked third-generation heir to South Korea’s largest automaker for plans to invest more than $ 10 billion in the state by 2025, including a $ 5.5 billion electric car factory in Georgia. Chung also added that he was eager to collaborate with US companies in areas such as robotics and autonomous driving.

Yoon, who has criticized his predecessor’s strategic ambiguity between Beijing and Washington and campaigned for better ties with the latter, will be eager to see Hyundai and peers chase growth in America. Although South Korea’s largest trading partner is still China, local brands have thrown themselves into the People’s Republic since diplomatic relations between the two sides deteriorated in 2017. The world’s largest car market barely joins Hyundai Motor Co.’s (005380.KS) sales these days: its market share was only 2.4% last year, down from almost 8% in 2016, per. S&P Global.

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It helps that Chung’s ambitions align with Bidens. Hyundai’s listed entity aims to sell 1.9 million electric battery vehicles annually in 2030 and wants to account for 7% of the global market share compared to 2.6% in 2022, per year. Bernstein. At the same time, the US president wants half of all new vehicles sold in America to be battery-powered by 2030.

Others will follow. Last year, Biden helped tease out of an agreement between battery manufacturers LG Energy Solution (373220.KS) and SK Innovation (096770.KS), who was involved in a bitter legal dispute in US courts. The deal helped keep both Korean manufacturers on U.S. soil and allayed concerns that automakers could become too dependent on Chinese suppliers. Samsung, the world’s largest maker of memory chips, is also building a $ 17 billion semiconductor plant in Texas. As Biden and Yoon get closer to each other, South Korea Inc will happily play third wheel.

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CONTEXT NEWS

– US President Joe Biden began his opening trip to Asia on May 19 with a visit to South Korea.

– The same day he visited a Samsung Electronics semiconductor factory. The president was joined by corporate vice president Jay Y. Lee after the director was acquitted of participating in a lawsuit over accounting fraud.

Biden also met with Hyundai Motor Group Chairman Euisun Chung on May 22 in Seoul to thank him for a major investment in the state of Georgia.

Hyundai Motor Group said on May 22 that it will invest $ 5 billion in the United States in 2025 to strengthen cooperation with US advanced technology companies. On May 19, the group also announced plans to invest $ 5.5 billion in Georgia to build electric vehicles and battery facilities.

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Edited by Robyn Mak and Thomas Shum

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Expressed opinions are the author’s. They do not reflect the views of Reuters News, which, according to the principles of trust, is committed to integrity, independence and freedom from bias.


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