Hyundai Mobis CEO Lee Gyu-suk (left) and Ulsan Mayor Kim Du-gyeom shake hands after signing an agreement for the new EV module plant at Ulsan Metropolitan City Hall on Thursday. (Hyundai Mobis)

Hyundai Mobis, the parts and service arm under Hyundai Motor Group, will construct a dedicated electric vehicle module plant in Ulsan, South Korea, with an investment of approximately 90 billion won ($65 million) and completion expected in late 2025.

The company signed an investment memorandum of understanding with the Ulsan Metropolitan City on Thursday, with Ulsan Mayor Kim Du-gyeom and Hyundai Mobis CEO Lee Gyu-suk attending the signing ceremony.

Located near Hyundai Motor Group's upcoming EV plant in Ulsan, this facility will supply critical modules like chassis and driver's seat modules for next-generation electric vehicles. The chassis module, a crucial structural system, integrates lower vehicle functions like suspension, steering, and braking. It will be delivered as part of a Power Electric (PE) system, incorporating an electric motor and an inverter to ensure optimal performance. The driver's seat module includes systems such as driving information, infotainment, climate control, and safety features like airbags.

The new plant adds to Hyundai Mobis' extensive domestic manufacturing network, which already includes battery system and PE system plants in cities like Ulsan, Daegu, Chungju and Pyeongtaek. By maintaining a strong manufacturing presence in these key locations, Hyundai Mobis sustains a stable supply chain for electrification components at home.

On a global scale, Hyundai Mobis has been expanding its reach by establishing electrification production bases overseas. It produces battery systems in China and the Czech Republic while building a new battery system assembly (BSA) plant in Indonesia. In North America, the company is developing production facilities for battery and PE systems to serve Hyundai Motor Group's Meta Plant America, a new electric vehicle factory. The company also has a facility in Alabama that supplies electric vehicle modules to Mercedes-Benz. Furthermore, Hyundai Mobis is constructing a significant battery system factory in Spain, poised to supply Volkswagen with key electrification components.

“Our goal is to support automakers by consistently delivering high-quality, customized modules for their future EV lineups,” said Lee Hyun-woo, executive vice president and head of the module business unit.

Hyundai Mobis is establishing itself as a vital partner for global automakers seeking cost-effective electric vehicle components amid intensifying competition. In 2023, the company secured $9.2 billion in overseas orders from Europe and North America, reflecting a 98 percent increase from the previous year.

This figure only includes orders from brands outside of Hyundai Motor Group, with the 2023 total doubling the company's prior record of $4.65 billion in 2022. The growth rate of international orders has consistently accelerated, with increases of 39 percent in 2021, 85 percent in 2022, and 98 percent in 2023. Compared to 2020's $1.76 billion in orders, the latest results are over five times higher.

The surge in orders from European automakers is driven by intense competition to reduce EV production costs. Chinese manufacturers like BYD are gaining market share with lower-priced models, and Tesla’s focus on market expansion over profitability has triggered a price-cutting race.

To stay competitive, automakers like Volkswagen are outsourcing key EV components, such as BSAs, to specialized suppliers like Hyundai Mobis. The Korean auto parts maker’s track record in supplying BSAs to Hyundai and Kia is considered to have contributed to its growth in the global market.

By Moon Joon-hyun (mjh@heraldcorp.com)