Hyundai Motor Group, South Korea’s leading automaker, has initiated the development of a next-generation powertrain known as a range extender. This move comes as the industry grapples with a slowdown in electric vehicle (EV) sales, often referred to as the “EV chasm.” The company aims to apply this technology to its lineup of pickup trucks and sport utility vehicles (SUVs) to bridge the gap until full EV adoption becomes more widespread.
The new powertrain, known as the Extended-Range Electric Vehicle (EREV) system, involves a fuel-based auxiliary power unit that charges the vehicle’s battery while driving, significantly extending its range. Unlike traditional hybrids, which rely on both an internal combustion engine (ICE) and a battery to drive the wheels, EREVs use the ICE solely to generate electricity for the battery, allowing the vehicle to travel up to 1,000 kilometers without requiring a charging stop.
Hyundai’s decision to focus on EREVs reflects its strategic response to the barriers hindering rapid EV adoption. These barriers include a relatively short driving range and a lack of comprehensive charging infrastructure, particularly in markets like the United States. Moreover, increasing concerns about the safety of EVs, particularly the risk of fires, have led Hyundai to prioritize the development of EREVs as an interim solution before fully transitioning to pure electric vehicles.
Industry sources indicate that Hyundai has established a dedicated “xEV system” task force at its Namyang R&D Center to spearhead the EREV project, with Yang Heui-won, Hyundai Motor Group’s president and R&D chief, at the helm. The company plans to roll out EREV versions of its flagship Santa Fe SUV and the Genesis GV70 within the next two to three years. Additionally, Hyundai’s upcoming generation of pickup trucks, codenamed TE for Hyundai and TV for Kia, will be equipped with EREV drivetrains and are expected to hit the market by 2028 or 2029.
The introduction of EREV pickup trucks is anticipated to strengthen Hyundai’s foothold in the U.S. market, where pickup trucks dominate sales. In 2023, pickup truck sales in the U.S. reached 2.86 million units, significantly outpacing large sedan sales. Hyundai’s current offering in the segment, the Santa Cruz, sold 36,675 units last year, ranking 12th in pickup truck sales. The new EREV-powered pickups, with a range of over 530 kilometers and a payload capacity exceeding 4,535 kilograms, are expected to enhance Hyundai’s competitive edge in this lucrative market.
The Broader Context: Slowing EV Adoption
Hyundai’s shift toward EREVs and hybrids highlights broader concerns within the automotive industry regarding the slower-than-expected growth in EV adoption. Despite significant advancements in battery technology and a global push towards sustainability, the anticipated rapid transition to electric vehicles has encountered several hurdles.
One of the primary challenges is the lack of sufficient charging infrastructure, which continues to be a major deterrent for potential EV buyers. While urban areas in developed countries are increasingly well-served by charging stations, rural areas and developing nations lag far behind. This disparity in infrastructure development has created a patchy landscape that slows the global uptake of EVs.
Moreover, the high cost of EVs compared to traditional ICE vehicles remains a significant barrier. Although prices have been gradually decreasing, they are still out of reach for many consumers. The situation is compounded by concerns over battery life and replacement costs, which can be prohibitively expensive.
The EV chasm is also characterized by growing consumer anxiety over EV safety, particularly following high-profile incidents of EV fires. These concerns have led some automakers to slow down the transition to pure electric vehicles and instead focus on interim technologies, such as hybrids and EREVs, that offer a compromise between traditional ICE vehicles and fully electric models.
The Road Ahead
Analysts suggest that the automotive industry may experience a period of stagnation, or “chasm,” in EV demand for the next two to three years. During this time, automakers like Hyundai and Kia are expected to focus on hybrid models and EREVs to maintain their market positions and prepare for the eventual widespread adoption of EVs.
Hyundai’s strategy to produce both EVs and hybrids at its new Metaplant America facility in Georgia underscores its commitment to a balanced approach. This facility is expected to play a crucial role in Hyundai’s U.S. expansion plans, particularly as it prepares to compete with established players like Ford, Chevrolet, and Ram, as well as new entrants such as Tesla’s Cybertruck.
As the industry navigates this challenging period, the development and deployment of EREVs could provide a critical bridge, ensuring that consumers have viable, efficient alternatives while the necessary infrastructure and technologies for full EV adoption continue to evolve.
