Hyundai Motor Group was slow to jump on the hybrid-powertrain bandwagon, as rivals surged ahead with the fuel-sipping technology.
But the Korean lines are making up for lost time.
Hyundai Motor Co. is on an aggressive path to electrification that seeks 7 percent of the global battery-electric market by 2030.
In the U.S., Hyundai hopes half of its new-vehicle sales will come from EVs in that time frame.
But part of transforming itself into an electric automaker is offering a conventional hybrid-electric or plug-in hybrid variant for every model in its gasoline-powered lineup.
That approach represents a pivot for the automaker.
“What prompted the change was a significant shift in strategy” to go all electric, Jose Muñoz, Hyundai Motor Co.’s global COO, told Automotive News in an exclusive interview.
“We see hybrid buying habits as the next step toward electrification,” he said.
“Many customers are still reluctant to take the bold step of moving into a battery-electric vehicle right away. However, we have seen a significant increase in demand of hybrids and plug-in hybrids.
“If we want to be a key player in electrification, we need to be strong in hybrids and plug-in hybrids — but with the ultimate goal to be a very strong on battery EV technology.”
Having the full spectrum of electrified products might help bridge the gap between gasoline and electric, but there are other factors in play.
“At this point, making sure you have hybrid and plug-in hybrids across a broader portion of the portfolio and making it more prominent is partially about emissions regulations,” said Stephanie Brinley, principal analyst for IHS Markit.
New EPA rules that take effect in September require a 28.3 percent reduction in vehicle emissions by 2026.
Saying customers will move more easily into EVs if they’ve tried electrification “feels like a theory in some respects, but it can’t hurt,” Brinley said.
“People who have chosen to do hybrids, plug-in hybrids or mild hybrids are obviously more interested in electrification or more willing to consider it,” Brinley said.
“Plug-in hybrids have a better potential for getting a customer used to the plug and understanding what the capabilities are. With hybrids, [customers] don’t have to do anything different and use same infrastructure.”
Hyundai’s “green” vehicles now represent 15 percent of Hyundai’s business, an increase of 5 percentage points over a year earlier, according to Muñoz.
By year end, Hyundai expects to have 10 electrified vehicles. One is the hybrid version of the Santa Fe midsize crossover, the first electrified Hyundai vehicle to be built in the U.S. at its factory in Montgomery, Ala. The Santa Fe has gotten a PHEV, and the Tucson compact crossover mirrors that format.
Kia is using the same playbook.
The redesigned, fifth-generation Sportage compact crossover, which had its first full month of sales in April, will add a hybrid and PHEV variant in June and July, respectively. Kia’s redesigned Sorento, which went on sale in 2021, also comes in gasoline, hybrid or PHEV versions.
Kia offers a dedicated hybrid, the Niro, that went on sale in 2017 and was followed by PHEV and EV variants in 2018 and 2019, respectively. Interest in the Niro family has seen highs and lows. But since January, the Niro has been experiencing triple-digit gains — mostly because of sales of the hybrid variant.
In the first quarter, the Niro hybrid notched 6,148 sales, compared with 4,014 for the EV and 2,060 for the PHEV, according to data from Motor Intelligence.
Hyundai and Kia are not the only brands targeting hybrids on the road to zero emissions.
Honda Motor Co. — which has attempted to sell hybrids in the past — has set a target of selling 800,000 EVs in North America by 2030.
But Dave Gardner, head of national operations and sales for American Honda, said the company will help its customers ease into EVs by getting them into hybrid versions of its popular models first.
Honda is prioritizing the Accord and CR-V, both high-volume models built with a 25 percent hybrid mix — sometimes more for the CR-V.
The Civic, which Gardner describes as a “gateway to the brand,” will be the next to get a hybrid variant, although Honda has not specified timing.
More desirable features and tech will be loaded onto the hybrid models as extra incentive for shoppers to try the electrified platform.
“The dealers can see the transition,” Gardner said. “We’ve got a solid plan and I think it’s clear to see the pathway as we head to the end of the decade.”