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Hyundai Q1 profit triples, as it adjusts production due to chip shortage

  SEOUL — Hyundai Motor Co posted a first-quarter profit that nearly tripled to its highest in four years as people bought its luxury cars, but warned it would have to adjust production again in May because of a chip shortage. Unlike its rivals, the South Korean automaker staved off production halts in the first quarter, thanks to a healthy chip inventory. But the shortage, exacerbated by factors including a fire at a chip factory in Japan and storms in Texas, is now catching up with Hyundai. Hyundai, which has lagged its rivals in the electric vehicle (EV) race, also said on Thursday that it was developing solid-state batteries and planned to mass produce EVs using solid state batteries in 2030. In February, Hyundai launched its Ioniq 5 electric midsize crossover, the first in a planned family of EVs that it hopes will propel it into the third rank of global EV makers by 2025. Hyundai Motor and Kia together aim to sell 1 million EVs in 2025. In the quarter ended March 31, Hyundai was unscathed as people at home and the United States snapped up its high-margin sports-utility vehicles and premium Genesis cars as the coronavirus pandemic dragged on, fueling car ownership. Net profit surged 187% to 1.3 trillion won ($1.16 billion) from 463 billion a year earlier, when business slumped as countries shut down to limit the spread of the coronavirus. This was in line with an average Refinitiv SmartEstimate. Revenue rose 8.2% to 27.4 trillion won. Hyundai is expected to report net profit of 1.4 trillion won for the April-June period, up 536% from the corresponding period a year earlier, Refinitiv SmartEstimate showed. Hyundai affiliate Kia Corp reported operating profit of 1.1 trillion won for January-March, up 142% on the year. Hyundai, which together with Kia is among the world's top 10 automakers by sales, has temporarily paused production three times since the beginning of this month and saved chips for its most popular models. "The condition of semiconductor parts is being a little more prolonged than we expected," said Seo Gang-hyun, an executive vice president at Hyundai. "As the semiconductor procurement condition is rapidly changing, it's difficult to predict production status after May.

Hyundai's electric car strategy takes shape under the radar

Green car fans are frothing over the Tesla Model 3. The Chevy Bolt may turn out to be the better car, and it will be available sooner. But don't overlook another electric car that's also due next year: the Hyundai Ioniq. With far less attention, Hyundai is launching an EV that is expected to be competitively priced and will spearhead the Ioniq lineup, which also has hybrid and plug-in hybrid versions. They share the same platform and look similar, but the Ioniq EV could prove to be a game-changer for Hyundai when it arrives at the end of the year, bringing new customers and casting the company as one with proficiency in the electric arena. Built in South Korea, the Ioniq line will be available at every Hyundai dealership that wants to sell the cars, already giving it a leg up on Teslas that often have long waiting periods for buyers. With a range of 124 miles on a single charge, it won't compete with the Model 3, which will travel at least 215 miles on a charge, or the Bolt, which has a range of 238 miles. Rather, it will face off against humbler products like the Nissan Leaf (107 miles) and the Volkswagen E-Golf (83 miles). Hyundai has not announced pricing, but is mindful the Ioniq trails Chevy and Tesla in range. An executive also indicated it could be working on an Ioniq with a longer distance capability, but declined to discuss specifics. Hyundai argues its found a sweet spot with the Ioniq EV, whose range is well within the distance most Americans drive in a day. It can recharge in about four hours and 25 minutes, which is faster than the six-hour charge time for the Leaf but slightly longer than the four-hour E-Golf. In quick charge mode, the Ioniq can juice up to 80 percent in 23 minutes. Critically, Hyundai is also offering a lifetime warranty on all of its hybrid and electric battery packs (it has since 2012), which could sway consumers still wary of the technology. It's a lot of numbers, and Hyundai will need considerable marketing muscle to make buyers consider Ioniqs in the face of a growing field of electrified competitors. But it's part of a broader play to reach an audience of younger consumers, who expect electrification to be baked into their cars. Millennials will account for 40 percent of new car purchases by 2020, and Hyundai says the generation is more likely to consider alternative powertrains than older ones.

Average new-car fuel economy figures continue record pace

Manufacturers are making more efficient cars and trucks; we've known that to be true for some time. Nearly every new car has some sort of trick to eke a few extra miles out of every gallon of fuel. Whether that be turbocharging, active aerodynamics or hybrid technology/electrified powertrains, the fact is that our vehicles are more efficient than ever before.
Thanks to a recent study by TrueCar, we've got fresh quantitative data to support the above statements. For the fourth month in a row, we've seen an improvement in national fleet fuel economy. We Americans are 0.7 miles per gallon more efficient than we were last month, and our cars are 1.6-mpg better than at this time last year. That said, we're still down on 2013's high, which was set back in January at 24.5 mpg.
Not only does this reflect the improved technologies in our vehicles, but it demonstrates a changing mindset among consumers, who are purchasing more efficient vehicles despite the relative stabilization of fuel prices. Every fuel-efficient model sold drives its manufacturers fleet average up.