Hyundai Motor (005380.KS) will begin full-scale production of the Ioniq 3, a compact hatchback for the European market, in August. Amid a sharp decline in its European market share driven by an aggressive push from Chinese electric vehicle makers such as BYD, Hyundai aims to stage a rebound with the Ioniq 3 as its starting point. In particular, Hyundai plans to fully activate its alliance with Samsung by fitting the Ioniq 3 with batteries from Samsung SDI.
According to the automotive industry Thursday, Hyundai will produce the Ioniq 3 at its Izmit plant in Turkey from August. The company plans to start with 27,000 units this year and expand production to more than 40,000 units next year.
The Ioniq 3, a model exclusive to the European market, features a simple yet refined exterior designed to appeal to local consumer tastes. Its price is expected to be set between 25,000 and 35,000 euros. The key long-range trim will use Samsung SDI's high-performance nickel-cobalt-aluminum (NCA) battery. It can travel up to 496 kilometers on a single charge.
To improve the efficiency of its European EV production, Hyundai will build a battery system assembly plant worth 55 million euros (about 96 billion won) within the Izmit facility. Hyundai Mobis will handle the battery cell integration and packaging processes.
The Ioniq 3 is the fruit of the battery alliance forged between Hyundai and Samsung. The two groups previously signed a large-scale battery supply contract in 2023, under which Hyundai will receive prismatic batteries from Samsung SDI's Hungary plant for next-generation electric vehicles bound for Europe over a seven-year period from this year through 2032. The Ioniq 3 marks the first case of Samsung SDI supplying batteries to Hyundai.
Hyundai plans to seek a turnaround in the European market, where it has been falling behind, through its battery alliance with Samsung. Hyundai sold 37,062 units in Europe in May, down 18.8% from a year earlier. On a cumulative basis from January to May, it recorded sales of 197,308 units, down 10.1% from last year.
The biggest cause is the absence of an EV lineup. Hyundai currently sells the Casper, Kona EV, and Ioniq 5, 6, and 9 in Europe. Cumulative sales from January to May reached 32,285 units, up 7.2% from a year earlier, but their share of total sales remains a slim 16.3%.
By contrast, Kia, which boasts a comprehensive lineup with the Soul, Niro EV, EV2 through EV6, EV9, and PV5, saw its May sales rise 14.9% to 49,382 units. On a cumulative basis from January to May, it sold 237,656 units, showing growth of 5.1%. In particular, its EV sales reached 71,075 units, marking high growth of 58.4%, with EVs accounting for 29.9% of total sales.
Hyundai's plan is to boost overall sales volume with the Ioniq 3 at the forefront while joining Kia's strong EV sales to face off directly against Chinese EV makers aggressively targeting the European market. BYD sold 135,307 units in Europe from January to May, more than double its total from last year (55,183 units). Chery Automobile sold 125,207 units over the same period, recording a growth rate of 316%.
The Ioniq 3's mass production is also expected to contribute significantly to Samsung SDI's profitability. The Ioniq 3 will be fitted with a 61-kilowatt-hour (kWh) battery. The total battery capacity for the 67,000 units Hyundai plans to produce through next year is 4,087 megawatt-hours (MWh), with the supply scale estimated at about 700 billion won. Samsung SDI has reportedly been supplying NCA batteries for the Ioniq 3 to Hyundai's Turkey plant since May.
In particular, with Samsung SDI's battery shipments falling 31.2% to 8.6 gigawatt-hours (GWh) from January to May, down from 12.5 GWh in the same period last year, a hit from the Ioniq 3 is sorely needed. As low-cost electric vehicles equipped with lithium iron phosphate (LFP) batteries have become a trend this year, sales of premium brands that use Samsung SDI's batteries have declined. BMW, a major Samsung SDI customer, saw its market share outside China fall to 5.8% from January to May this year, down from 7.0% last year.
