By Kim Yoo-chul
Hyundai Motor will release its first electric vehicle (EV) in 2016, with LG Chem supplying batteries for the car, officials said Tuesday.
The contract for supplying batteries will run until 2018, according to an official from an LG affiliate.
A Hyundai Motor official said the automaker is ready to launch EVs in 2016. This is a major change for the automaker as it has not been as aggressive in the development of EVs as its foreign rivals.
The demand for EVs has been dwindling due to declining oil prices and the increase in the development of shale gas reserves.
However, the official said the addition of EVs will help the automaker strengthen its portfolio ahead of its international competitors.
"Hyundai's first pure EV will be a mid-sized sedan. Equipped with improved batteries, enhanced system management and lighter materials, the upcoming model will weigh about 30 percent less than existing hybrid EVs," said the official.
Albert Biermann, recently scouted by Hyundai as executive vice president from BMW, will be in charge of the design of the EVs.
Hyundai seeks to establish a better product lineup ranging from hybrids to pure EVs.
Unlike plug-in hybrid EVs (PHEVs), which use both gasoline and batteries, pure EVs are powered just by batteries.
Officials at Hyundai's major local battery partners including SK Innovation said the automaker plans to expand its PHEV models to 12 by 2020 from the current four.
Hyundai plan to launch an electric sports car and a sports utility vehicles (SUVs) as well as small-sized sedans.
For electric SUVs, Hyundai separately agreed with the SK Group's battery affiliate to procure batteries until 2017 to diversify its battery sourcing channels.
Data from research firms showed PHEVs are receiving quite a response from customers in the United States.
By November this year, 83,647 electric cars were sold in America. PHEVs accounted for 55 percent of the electric cars sold in the U.S.
The all-electric Nissan Leaf and range-extended Chevy Volt are the top sellers this year, accounting for almost 50 percent of EV sales.
"It will be interesting to see how new government policies, the development of new models and lower energy prices play out in major EV markets," said an LG official.