Tier 1 supplier Hyundai Mobis Co., Ltd. will build its third auto component factory for electric vehicles (EVs) in Pyeongtaek, Gyeonggi, South Korea, Yonhap News Agency reported.
KRW35.5 billion won (USD30 million) will be injected into the production site, which will be located on 16,726 square meters of land in Pyeongtaek. Construction will start in September. The plan is to start producing electric vehicle (EV) components in the second half of 2021.
The company plans to use the new factory to produce core EV components, including motors, inverters and power electronics modules. Referred to as PE modules for short, they are a combination of components that power EVs in place of an engine.
To meet with a rapidly increasing demand for EV components, Hyundai Mobis plans to secure production capacity of 150,000 units next year and gradually expand its facilities to reach a maximum of 300,000 units by 2026.
The Pyeongtaek plant will mainly supply Kia Motors, the auto parts maker’s sister affiliate under the Hyundai Motor Group. Kia owns a 17.24% stake in Hyundai Mobis. The Pyeongtaek site is relatively close to Kia’s Hwaseong plant in Gyeonggi, only 13 kilometers away.
This will be the Korean auto parts maker’s third factory specializing in electric vehicles.
The first is located in Chungju, North Gyeongsang, which has produced components for hydrogen and electric vehicles since 2013. A plant in Ulsan, still under construction, will also focus on EV parts supply, but to supply Hyundai Motor.
“The decision was part of our future strategy to prepare ahead of change in the industry. Pre-emptive investment was a must to succeed as the industry evolves to the era of electric vehicles,” Hyundai Mobis said.
Eugene Investment Securities Analyst Lee Jae-il said that Hyundai Mobis was going through fundamental change in terms of its product portfolio.
“Hyundai Mobis’ performance in combustible vehicle components was slow compared to Tier-1 competitors,” Lee said. “As the company has been focusing investment on future technology like autonomous or electric vehicles, our expectation is that Hyundai Mobis will become a Tier-1 player in those segments in 2021.”
Companies that supply parts or systems directly to original equipment manufacturers (OEMs) are called Tier 1 suppliers.