As global automakers race toward electrification, Hyundai Motor Group has made the strategic decision to develop and manufacture EV batteries in-house, marking a significant shift in its supply chain approach. The Korean automotive giant aims to reduce its dependency on external suppliers like CATL, SK On, and LG Energy Solution while lowering battery costs from the current 40% to below 30% of total EV manufacturing expenses.
This vertical integration strategy mirrors moves by competitors Tesla and BYD, who have leveraged battery production capabilities to gain market advantages.
Hyundai’s technological framework centers on an innovative Cell-to-Vehicle design that promises to reduce battery system weight by 10% compared to conventional Cell-to-Pack approaches. The company is developing advanced chemistries including NCM and NCMA for premium models, while employing more cost-effective LFP batteries for budget offerings such as the Hyundai Kona and Kia Niro. These advancements align with industry trends focusing on energy density improvements to maximize vehicle range and performance.
Battery innovation is the cornerstone of Hyundai’s EV strategy, with tailored chemistry solutions across its diverse vehicle portfolio.
I’ve noted that solid-state battery development has been delayed until 2030 due to persistent technological hurdles.
The change won’t be without challenges. Hyundai faces potential low yield rates and high production costs as it scales manufacturing capabilities. The planned production lines will have a 1-2 GWh capacity at the new R&D center in Anseong, Gyeonggi Province. A hybrid approach—potentially a “fabless” model that balances outsourcing with in-house production—may mitigate these risks during the transitional phase.
Construction of Hyundai’s dedicated battery research facility in Anseong began in March 2025, representing a critical investment in proprietary technology development. The facility, officially named Mobility Alpha Line Anseong Center, will be the company’s first independent R&D hub dedicated exclusively to battery technology. Currently at the fifth of nine “technology readiness levels,” the company is focused on prototype development and collaboration with academic institutions.
The benefits of this strategy extend beyond cost reduction. In-house production grants Hyundai enhanced control over supply chains, production timelines, and pricing flexibility.
Custom-designed batteries will allow for differentiation in range and performance across the company’s expanding EV lineup. While substantial R&D investment is required, Hyundai’s strategic pivot positions it to compete more effectively against established EV manufacturers and potentially carve out a significant position in the evolving battery recycling market.
