South Korea's Hyundai Motor to invest $35 billion in autonomous driving

Hyundai Motor Group recently said it plans to invest 41 trillion won (about 35 billion U.S. dollars) in mobile travel technology and strategic investments by 2025, indicating that South Korea's largest automaker is unwilling to lag behind its competitors in electric vehicles and autonomous driving technologies.

Hyundai Motor said the investment plan covers areas including autonomous driving, intelligent networking and electric vehicles. Last month, Hyundai Motor Group announced that it had signed a cooperation agreement with Aptiv, a supplier of autonomous driving technology, to establish an autonomous driving joint venture. Hyundai Motor and its subsidiaries Hyundai Mobis Co. and Kia Motors Corp. jointly invested $1.6 billion in cash.

Hyundai's plan also has support from the South Korean government, which said on Tuesday it plans to spend 1.7 trillion won between 2021 and 2017 to advance self-driving car technology.

The South Korean government expects Hyundai to launch a nationwide service of fully autonomous cars to customers in 2024 and to make them available to the general public in 2027.

The move is part of a blueprint for future cars announced by South Korean President Moon Jae-in at an event at Hyundai Motor Research Center near Seoul.

South Korean President Moon Jae-in has previously said his country has aspirations to lead the world in areas such as batteries, hydrogen energy, semiconductors and information technology, and on Tuesday he predicted that self-driving cars will account for half of new car sales in South Korea by 2030.

"We will become the first country in the world to commercialize self-driving cars," Moon said. "Current policies related to autonomous driving are based on Level 3, but our goal is to commercialize fully autonomous vehicles (Level 4) by 2030."

In the SAE's autonomous driving classification, Level 3 autonomous vehicles still need to share vehicle control with the driver, while Level 4 is classified as advanced autonomous driving and does not require the driver to take over in most scenarios.

Although full of confidence, it is still unknown what the current level of South Korean automakers is, and the outside world has no way of judging whether the timeline set by Moon Jae-in can be realized. However, recent reports show that on the road to autonomous driving, South Korea still has a lot of lessons to learn in artificial intelligence, sensors and logic chips.

“Hyundai Motor may have to buy a lot of technology from third parties because it is so weak in the software field,” said Esther Kim of Samsung Securities. “Although Hyundai Motor has plenty of money, if its revenue capacity weakens in the future, outsourcing technology will also bring huge financial burden.”

More than half of 2019 has passed, and previously active autonomous driving manufacturers have become more realistic. They have to admit that commercial use of autonomous driving fleets is not easy.

Globally, competition in the field of fully autonomous vehicles is heating up, and automakers are facing tremendous pressure to fall behind.

Japan's SoftBank has invested billions of dollars to work with Toyota and General Motors to help develop driverless cars. Ford and Baidu have also teamed up to develop self-driving cars in China. Volkswagen has begun testing electric cars equipped with self-driving technology on some streets in Hamburg.

However, the investment cost of autonomous driving technology is also high, which will erode the profits of automakers at a time when global car sales are declining. In short, the research and development and commercial use of autonomous driving is a no-man's land for global players. At present, players from various countries are secretly competing with each other. As for whether South Korea's autonomous driving can be the first to be commercialized globally, we have to wait and see.