Hyundai bets on China for growth after Russia exit and U.S.-Europe EV slowdown

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Hyundai bets on China for growth after Russia exit and U.S.-Europe EV slowdown

Published: 20 Apr. 2026, 05:00 Updated: 20 Apr. 2026, 17:49

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

[NEWS ANALYSIS]

For Hyundai Motor, China has become a sales graveyard, as the company has held less than 1 percent market share over the past few years following its heyday in 2016. However, recently the Korean automaker has renewed its push in the market, as China is seen as one of the few viable electric vehicle markets globally given faltering EV demand in the United States and Europe.

The move had long been anticipated after Hyundai effectively exited Russia, abandoning its plant buyback option and signaling a broader strategic retreat.

While the Korean automaker’s biggest bet is a strategy centered on price competitiveness and China-specific models, success is far from assured, given the rapid technological advances of Chinese EV makers and the aggressive positioning of rivals such as Tesla.

Hyundai and Kia sold a total of 1.14 million cars in China in 2016, lifting their market share to around 5 percent. But following Beijing’s backlash against Korean brands related to the deployment of the U.S. Terminal High Altitude Area Defense antimissle system, or Thaad, sales fell sharply every year, dropping to 196,746 units in 2025, with market share edging just above 0.8 percent.

China remains the world’s largest auto market, with roughly 31.4 million vehicles sold last year, nearly twice the United States’ 15.98 million.

Hyundai Motor's Elexio EV, which was specifically designed for Chinese customers [YONHAP]

Golden and Aurora-inspired Ioniqs
Hyundai's first attempt at increasing market share seems based on leaning into themes that resonate with Chinese consumers — notably futuristic concepts such as gold and space.

Hyundai recently held a launch event in China for its EV brand Ioniq, unveiling concept models “Venus” and “Earth” for the first time globally, featuring gold and aurora-inspired designs aimed at a highly futuristic aesthetic.

“China has an auto market that is 60 percent controlled by domestic brands, and in order to survive there, Hyundai needs to improve its price competitiveness,” said Cho Chuel, senior research fellow specializing in the automotive and Chinese industries at the Korea Institute for Industrial Economics and Trade.

“At the same time, it lags significantly behind local players in autonomous driving, so it must find a differentiating edge that can overcome that gap.”

Learning from past missteps, Hyundai this time joined forces with Momenta, a Chinese self-driving technology firm, to equip its upcoming China-specific models with locally optimized autonomous driving systems.

Pricing for the new Ioniq models has not yet been disclosed, but is expected to be significantly adjusted downward.

Hyundai Motor's plant in Beijing [HYUNDAI MOTOR]

Hyundai’s Elexio, a China-dedicated electric model launched last year, starts at around 120,000 yuan ($17,600) in the Chinese market — a far lower price than domestic EV pricing, where the Ioniq series begins in the mid-50 million won ($33,700) range.

Hyundai’s Chinese subsidiary, Beijing Hyundai, currently operates three factories with an annual production capacity of 1.66 million units. However, their utilization levels fell to just 26.5 percent last year.

The company will also unveil production-ready designs and product details for China at the Beijing International Motor Show 2026 later this month, along with plans for a full-cycle EV ecosystem spanning sales and aftersales service.

Hyundai CEO José Muñoz said he plans to launch 20 China-dedicated models over the next five years, targeting sales of 500,000 units by 2030, in a new strategy called “In China, for China and to the world,” specified in a letter to shareholders last month.

Hyundai Motor's concept car for its Ioniq EV brand, which will be launched in the Chinese market [NEWS1]

Rivals on the offensive

It's not just Hyundai. China has also become a top priority for all global automakers in the midst of the U.S. President Donald Trump administration’s skeptical stance on EVs.

Tesla is in the process of developing a smaller, cheaper SUV aimed at China, which will be 4.28 meters (14 feet) in length — 51 centimeters (20 inches) shorter than the Model Y — and uses a smaller battery pack, bringing the weight down to around 1.5 tons, roughly half a ton lighter than the Model Y.

Volkswagen, meanwhile, has unveiled a slate of China-specific EVs through its three joint ventures, including the ID. ERA 9X, ID. AURA T6 and the Yuzhong 08.

Nissan’s joint venture with Dongfeng launched the NX8, a new mid-to-large electric SUV.

SAIC and General Motors' Buick brand also opened preorders for the E7, the first SUV under its premium sub-brand “Zhijing,” on April 10.

“The Chinese auto industry is expected to enter another phase of transformation starting in 2026,” said Lee Ho, principal researcher at the Korea Automotive Technology Institute.

“China’s government is attempting to shift the industry away from destructive price-based competition toward technological competition, in order to drive qualitative industrial upgrading.”

China produced more than 30 million vehicles in 2024, maintaining its position as the world’s largest automaker for the 17th consecutive year. In particular, environmentally friendly cars, which include pure electric and plug-in hybrid models, account for roughly two-thirds of its global production.

BY SARAH CHEA [[email protected]]