Hyundai: Chinese EV manufacturing muscle impossible to ignore

Hyundai is increasingly open to sourcing more of its future electric vehicles from China, with local COO Gavin Donaldson telling carsales the country’s dominance in EV manufacturing is becoming too significant to ignore. While a China-built Hyundai ute appears unlikely for now, the brand is actively assessing its global manufacturing options as it seeks to expands its EV lineup.

Roughly 75 per cent of all EVs on the planet now roll off Chinese production lines, and that kind of scale is starting to bend the strategy of even the most established car brands – Hyundai included. 

Speaking with carsales, Hyundai Australia chief operating officer Gavin Donaldson admitted the brand was now actively weighing up how much more of its future EV portfolio could be sourced from China.

The Hyundai Elexio mid-size electric SUV is the first Chinese-built EV from the Korean brand sold in Australia, and it certainly won’t be the last. 

“I think we’ll see more brands that will have joint ventures or partnerships coming through from China,” Donaldson said.

“I think that’s inevitable from that point of view. That’s the great thing about Hyundai, though: we've got factories all over the world that we can tap into.

“But I definitely think we’ve got a couple of options that we can use out of China, and I think we’ll continue to look at them.”

Hyundai is hardly breaking new ground though: Mazda has already gone all-in with Chinese car giant Changan, building its new electric 6e sedan and CX-6e SUV duo through the partnership – a serious commitment from a brand that’s traditionally guarded its manufacturing identity closely.

Kia already builds vehicles in China for various export markets while Tesla’s Shanghai Gigafactory has become one of the company’s primary global export hubs, and where all Aussie-delivered Tesla are sourced.

The list of western and Japanese brands with a foothold in Chinese manufacturing continues to grow, driven by the same reality: few, if any, countries can match China on manufacturing scale, speed and cost.

Donaldson also believes concerns around Chinese-built vehicles have largely disappeared.

“I think it's pretty much almost gone,” he said.

“Once we stopped manufacturing cars in Australia, you could name multiple countries where they come from. So I don’t think there’s as much of a stigma around where the cars are built anymore.

“I think they’re all built with relatively good quality from that perspective.”

Where Donaldson draws the line, at least for now however, is the ute.

Asked directly whether a Chinese-built Hyundai ute was on the cards, he didn’t rule it out, but he also made it clear other manufacturing hubs would take priority. 

“There’s probably a couple of other plants that we would probably like to see that would be more likely,” he said. 

“I would never say no, but I would say that we’ve probably got some other plants that we would probably consider to build [the upcoming ute]. 

“The fact that the ute would become such an important part of a Hyundai portfolio, I would probably say that our factories in Korea would want to look at it first, and then we’ve got factories in Thailand and Indonesia. 

“So there’s a lot of other options that we can consider first. Never say never, but I would probably say there’s other options we would go to first, and that’s got nothing to do with quality. It’s just the importance of getting that car off.” 

For now, South Korea remains Hyundai Australia’s primary production source with roughly 90 per cent of Aussie delivered cars sourced there. 

The brand is also actively exploring options across the “Asian corridor”, including Thailand, Vietnam, and China, to guard against supply disruptions, but its willingness to increasingly tap into its Chinese manufacturing footprint reflects a wider industry trend. 

As China’s dominance in EV production continues to grow, more Hyundai electric vehicles sold in Australia could eventually wear a 'Made in China' badge. Except for the upcoming ute, it would seem. 

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