Hyundai Motor Group outlines future powertrain development strategy




Hyundai Motor Group is to focus on next-generation internal combustion, electric, fuel-cell, and plug-in hybrid powertrains.

IHS Markit perspective

  • Significance: Hyundai Motor Group has outlined its future powertrain development strategy, which represents the next step for the group towards creating a cleaner environment through next-generation internal combustion, electric, fuel-cell, and plug-in hybrid powertrains.
  • Implications: Hyundai-Kia aims to become the second largest alternative-powertrain automaker by 2020. The two automakers plan to launch 31 such vehicles in global markets by 2020.
  • Outlook: IHS Markit forecasts that global production of Hyundai's plug-in vehicles, which include EVs and PHEVs, will grow to over 204,100 units by 2020. We also forecast that the group's annual output of FCEVs will peak to 2,070 units in 2019.

Hyundai Motor Group has outlined its future powertrain development strategy at its International Powertrain Conference in South Korea, according to a company press release. The group is displaying the first four engines and two transmissions from its forthcoming line-up of new 'Smart Stream' powertrains. The next-generation Smart Stream technology optimises the existing powertrain structure, with engine components reduced in size and weight to enhance fuel efficiency. With the advanced combustion techniques of Smart Stream engines, Hyundai Motor Group aims to maximise thermal efficiency by up to 50% in the future.

Among the Smart Stream technology presented at the International Powertrain Conference is the first commercial application of continuously variable valve duration (CVVD) technology. In the Smart Stream G 1.6 turbo engine, the opening and closing of the cylinder valve is timed to best respond to various driving modes, such as eco-driving or dynamic driving. Other new technology includes the Smart Stream eight-speed wet dual clutch transmission (DCT). The dual clutch system enables optimal shift response, with the eight-speed gearing and high-efficient hydraulic system delivering both faster acceleration performance and better fuel economy at the same time, compared with conventional automatic transmission.

Beginning with the introduction of 1.6-litre gasoline (petrol) and diesel Smart Stream engines, the technology will eventually be available for all Hyundai Motor Group vehicles. By 2022, the group aims to develop an all-new Smart Stream powertrain line-up composed of 10 gasoline engines, six diesel engines, and six transmissions.

Strategy for 2025

Hyundai expects that the internal combustion engine (ICE) will maintain a strong presence in the market until 2025, as plug-in hybrid and electric powertrains have started to receive wider acceptance. In a bid to respond to a diversifying market, the group plans to produce a greater proportion of electric, fuel-cell, and plug-in hybrid powertrains alongside its new Smart Stream internal combustion engines. This shift to produce more alternative powertrains is coupled with plans to enhance battery capacity and increase the electric-only range capabilities of its electric models. The group also aims to lead in fuel-cell electric vehicles (FCEV) industry, by investing in the development of its next-generation hydrogen powertrain. Hyundai's next-generation FCEV will have a driving range of 800 km, a maximum power output of around 120 kW, and the largest hydrogen storage density of any FCEV on the market.

Outlook and implications

The new powertrain strategy from Hyundai clearly hints that the company expects most of the powertrain technologies to exist simultaneously with varying market share. In the short term, Smart Stream engines will continue to see investment from Hyundai. The Smart Stream engines were first showcased by Hyundai at the 2017 Frankfurt International Motor Show. The Smart Stream powertrains will allow Hyundai Motor Group to respond to global changes in environmental regulation and delivering greater value to customers. The Smart Stream powertrains deliver improved fuel economy and reduced exhaust emissions.

Meanwhile, Hyundai Motor Group aims to become the second largest alternative-powertrain automaker by 2020. The group has launched a new roadmap revealing growth plans for the alternative-powertrain vehicle segments. Both Hyundai and its affiliate Kia plan to launch 31 alternative-powertrain vehicles in global markets by that year. This includes 10 hybrid vehicles, 11 plug-in hybrid electric vehicles (PHEVs), eight electric vehicles (EVs) and two FCEVs. 

Hyundai plans to launch an all-electric version of its new Kona compact crossover in 2018, with a driving range of 390 km on a full charge. It also plans to introduce a 321 km-range version of the pure-electric IONIQ sedan by 2018. The automaker also confirmed that it is developing its first dedicated EV platform, which will allow the company to produce multiple models with longer driving ranges. Kia also plans to expand its EV line-up by launching the Niro electric SUV in the country next year. Hyundai also plans to introduce an all-electric Genesis sedan in 2021 and plans to launch an EV with a range of 500 km per charge after 2021.

The group's plan to launch long-range EVs is aimed at competing with other models that boast pure-electric ranges of more than 200 miles. For instance, Chevrolet's Bolt EV has a driving range of 383 km, while Tesla's Model S 90D can travel up to 378 km on a single charge. The Hyundai IONIQ's current range in pure-electric mode is around 200 km, while Kia's Soul EV has a driving range of 180 km.

The automaker will also strengthen its global leadership in hydrogen fuel-cell technology by enhancing research and development (R&D) efforts to boost FCEV performance and durability, while also making the technology smaller and cheaper so that it can be applied to smaller sedans. As part of these efforts, Hyundai will unveil a new hydrogen-powered bus in the fourth quarter of this year and launch the new fuel-cell SUV early next year. Hyundai has recently unveiled a near-production version of its next-generation FCEV in Seoul. The yet-to-be named FCEV, an SUV, uses the automaker's fourth-generation hydrogen fuel-cell technology, resulting in a substantial improvement in both efficiency and performance. Hyundai will showcase the new-generation fuel-cell SUV at the 2018 CES, along with revealing its official name. The vehicle is expected go on sale in South Korea early next year, followed by the United States and Europe. The automaker is also considering launching the vehicle in markets with high growth potential for alternative-powertrain vehicles such as China.

Although Hyundai has made significant progress in fuel-cell technology, demand for fuel-cell vehicles remains low due to its exorbitant price and the limited availability of hydrogen refilling infrastructure. The automaker is developing its fuel-cell technology to help reduce the overall cost of the vehicle. It has developed its own membrane electrolyte assembly (MEA) and metallic separator, both critical components of hydrogen fuel-cells. In a bid to promote FCEVs, the automaker has signed several agreements with taxi operators and car-sharing service providers in Germany and South Korea. These partnerships are valuable for Hyundai as they offer the automaker an opportunity to enhance the visibility of its FCEVs. Hyundai has also joined a global initiative, the "Hydrogen Council", to promote the development and commercialisation of FCEVs. It also plans to launch a fuel-cell sedan in future, while Kia plans to launch an FCEV by the end of 2021 to further expand its hydrogen-powered vehicles line-up.  However, it is going to take several years before the South Korean automakers achieve economies of scale in fuel-cell technology.

According to IHS Markit's light-vehicle powertrain forecast, global production of the Hyundai group's plug-in vehicles, which include EVs and PHEVs, will grow to more than 204,100 units by 2020, up from around 14,330 in 2016. We also forecast that the group's annual output of FCEVs, which are new technology, will peak at 2,070 units in 2019, up from 233 units in 2016.

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About The Author

Jamal Amir joined IHS Markit in August 2015 as research analyst for the World Market Automotive Practice, covering the Middle East, Africa, South Korea, Australia, and the ASEAN region. He has around four years of experience in the field of research and analytics. Prior to joining the company he worked as research associate studying and writing about investment opportunities in various sectors of India. He holds a PGDM in Marketing and Human Resource from Jaipuria Institute of Management and a BE in Computer Science from MVJ College of Engineering.