Hyundai will invest the equivalent of $35 billion in mobility and other automotive technologies by 2025, Reuters reports.
In an announcement, the company revealed that its huge investment will encompass autonomous, connected and electric vehicles, as well as the associated technology for ride-sharing services.
The South Korean government fully supports Hyundai’s move with President Moon Jae-in boldly declaring that self-driving cars could account for half of all new car sales in the country by 2030, saying that “the self-driving market is a golden market to revitalize the economy and create new jobs”.
An industry ministry official told Reuters that the government will spend 1.7 trillion won ($1.4 billion) on self-driving technologies between 2021 and 2027 and expects Hyundai to launch a Level 4 autonomous vehicles for fleet customers in 2024 and for the general public in 2027.
Hyundai’s investments come shortly after it was announced that it and two affiliates will invest $1.6 billion with U.S. self-driving technology company and supplier Aptiv.
Achieving the South Korean government’s self-driving goals may not be easy. The government recently acknowledged that the nation lags behind in some key areas necessary for self-driving vehicles including artificial intelligence, logic chips, and sensors. Some experts believe the targets set by the government and Hyundai may not be realistic.
“Hyundai has to buy technology from someone else because it lacks software technology. Even though it has a lot of cash, this could become a financial burden if its earnings deteriorate,” analyst from Samsung Securities, Esther Yim said.
To prepare itself for the world of autonomous vehicles, the South Korean government will prepare a regulatory and legal framework for self-driving cars and the questions they pose by 2024.