Hyundai Motor Group Chairman Chung Euisun has set an ambitious target to outpace Tesla Inc. in software-defined vehicle (SDV) technology by 2028, underscoring quality over speed in South Korea’s top automaker’s transition to a software-first approach.
He unveiled the goal during a closed-door town hall meeting with some 150 employees at the group’s Advanced Vehicle Platform (AVP) headquarters in Pangyo, south of Seoul, on March 6, sources said.
The SDV, often called a “computer on wheels,” is a next-generation vehicle that operates through an advanced operating system – a segment, in which major global automakers are fiercely competing.
SDVs enable constant and seamless upgrades of a car’s functions through an over-the-air system throughout the car’s lifetime.
As the automotive industry’s rivalry to win the market with hardware advances is nearly reaching its limit, Hyundai has turned its focus to software upgrades like in-vehicle information (IVI) systems and self-driving technology.
“Tesla is currently leading the market, and Chinese manufacturers are aggressively developing their technologies, but no one knows what the landscape will look like in 2028,” he said. “When we launch our advanced SDV products in 2028, we must be ranked No.1 in evaluations.”
Chung emphasized the evolving role of SDVs, saying that “a car should be a comfortable space. The key role of an SDV is to enhance the convenience of working inside the vehicle.”
He said while rapid development is crucial, given Hyundai’s relatively late entry into the sector, “quality must remain the top priority.”
SDVs: HYUNDAI’S CORE FUTURE MOBILITY TECH
SDVs represent one of Hyundai’s core future mobility technologies, alongside robotics, autonomous driving and advanced air mobility (AAM).
The conglomerate has already outlined plans to transform all its new vehicle models to SDVs by the end of this year.
Chung also highlighted the strategic advantages of excelling in SDV development.
“Gaining expertise in SDVs will significantly strengthen our capabilities in robotics and AAM,” he said.
Addressing employees, he said Hyundai must deepen its expertise rather than rely on external partners.
“Collaboration is important, but we must know more than our suppliers. If we become too dependent, we risk losing control over quality,” he said.
The automotive group, which encompasses Korea’s two largest automakers – Hyundai Motor Co. and Kia Corp. – has committed 18 trillion won ($12.4 billion) to SDV development until 2030.
Established in January 2024, the AVP division serves as Hyundai’s central software R&D hub.
GLOBAL SDV RACE
The global automotive industry is racing to enhance SDV capabilities.
According to MarketsandMarkets Research, the global SDV market is forecast to grow to $419.7 billion by 2028 from $270.9 billion in 2024.
Toyota Motor Corp. is developing its own vehicle operating system, AreneOS, with an aim to commercialize it by the end of this year.
Volkswagen has invested 43 trillion won, or some $29.6 billion, into its subsidiary Cariad to boost automotive software technology, while Mercedes-Benz is co-developing SDV platforms with Nvidia Corp.
The global SDV race comes as the car industry’s prospects are clouded by slower-than-expected EV uptake.
While major EV makers, including Tesla and BYD Co., have begun slashing prices on their flagship models, battery makers are scrapping or delaying their production expansion plans.
In January 2024, 42dot Inc., Hyundai Motor’s self-driving technology unit, said it would partner with Samsung Electronics Co. to jointly develop an artificial intelligence-powered SDV platform.
42dot plans to introduce a new AI-powered SDV platform with Samsung Exynos auto chips this year.
By Gil-Sung Yang, Bo-Hyung Kim and Jung-Eun Shin
vertigo@hankyung.com
In-Soo Nam edited this article.
