Hyundai and GM Explore Strategic Partnership for Electric Vehicles and Beyond

SEOUL, March 20 (Reuters) – Hyundai Motor and General Motors (GM) are close to finalizing a deal that would see Hyundai supply two electric commercial van models to the U.S. auto giant, according to a source familiar with the discussions and documents reviewed by Reuters.

In a reciprocal arrangement, GM may provide Hyundai with pickup trucks to be sold under its own brand in North America, the source said.

The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan.

Expanding Cooperation in a Changing Market

These potential agreements could signal a broader partnership between the two automakers, as they continue to explore various avenues for collaboration. The documents reviewed by Reuters show that Hyundai is considering additional deals with GM. These include joint purchasing or development initiatives in areas such as computing chips, next-generation batteries, and battery materials.

Like other substantial global automakers, both GM and Hyundai are facing increasing competition from Chinese electric vehicle (EV) manufacturers. The threat of a global trade war also adds to the pressure, prompting both companies to consider sharing products to curtail spending.

Electric Vans and North American Production

Under the current proposal, Hyundai would manufacture the electric vans for sale under both its own and GM’s brands. Initially, the vehicles would be imported from South Korea, according to the documents and the source. However, Hyundai is evaluating the feasibility of manufacturing the vans in North America by 2028.

The current plan involves exploring options for production, this includes constructing a new plant, adding production capacity to an existing facility, or outsourcing the manufacturing process.

Pickup Trucks and Potential for Expanded Collaboration

The discussions concerning pickup trucks involve GM sharing its midsized truck models, such as the Chevrolet Colorado and GMC Canyon, which are popular in the United States, according to one source.

Hyundai has also expressed interest in selling a version of GM’s full-sized pickup trucks, the source said, although GM has not yet committed to this option.

It is expected that any agreement regarding pickup trucks will take more time to finalize compared to the commercial van arrangement, the source indicated.

The automakers are also discussing the possibility of Hyundai supplying GM with compact SUVs that could potentially be added to its product lineup in Brazil, the source said.

Statements from Automakers

In January, Hyundai had already announced that it was in discussions to provide electric commercial vehicles to GM. This was part of a preliminary agreement to explore potential cooperation in the areas of vehicles, supply chains, and clean-energy technologies, all designed to reduce costs and accelerate development.

Details of these partnership discussions, including the possible pickup truck agreement, are being reported here for the first time.

General Motors declined to provide specific comments on the negotiations but stated that both companies “continue to explore potential areas of collaboration.”

Hyundai has also issued a statement noting that no agreements have been finalized during the ongoing talks. They are, however, exploring deals “across key strategic areas.”

Addressing Competitive and Geopolitical Challenges

The rise of Chinese EV producers, offering high-tech models at lower costs, has disrupted the auto industry. GM, like many traditional automakers, is experiencing declining sales in China, the world’s largest auto market. The company is now aiming to enhance revenue in other markets.

While Hyundai’s business in China is currently limited, it faces the threat of Chinese exports globally.

Both automakers are also dealing with geopolitical tensions, including tariffs imposed or threatened by U.S. President Donald Trump. These trade barriers could restrict their ability to use imported components, potentially compelling them to establish more manufacturing operations in the U.S.

According to two sources familiar with the matter, tariff threats are also adding uncertainty to the GM-Hyundai partnership discussions.

Sam Fiorani, vice president at Auto Forecast Solutions, noted that a commercial van deal could enable GM to better compete with the Ford Transit and Ram ProMaster. This arrangement would circumvent the need for major investments in developing its own model.

GM is in need of new commercial vans as it is expected to phase out production of its older Chevrolet Express and GMC Savana models.

Hyundai is considering sharing its compact electric commercial vans based on its ST1 electric commercial vehicle. They would also supply GM with a larger electric commercial van that Hyundai is developing to compete with the Mercedes-Benz Sprinter, according to the documents and one of the sources.

The Hyundai documents indicate that the two automakers might share sales and service networks for the vans. The smaller van would initially be assembled at Hyundai’s factory in Ulsan, South Korea, making it available to GM, potentially starting in mid-2027. Subsequently, the larger van, similar in size to Hyundai’s Solati, is scheduled to follow in 2028.

The new North American commercial van factory that is under consideration would aim for a production of 60,000 units by 2030, and exceeding 100,000 units by 2032.

Strategic Advantages for Both Companies

Hyundai is seeing increased sales in the U.S. while experiencing a decline in China. They have emerged, alongside GM, as a competitor to Tesla in the EV market. However, unlike GM, Hyundai has a limited presence in the lucrative U.S. commercial vehicle and truck market.

Fiorani, of Auto Forecast Solutions, suggests that Hyundai can leverage the partnership with GM to gain a foothold in these segments. These areas are also where competitors such as Toyota and Nissan are less competitive against the Detroit Three automakers.

As Hyundai seeks to persuade GM to share its popular pickup trucks, it is considering offering GM a small sport utility vehicle called the Creta to revitalize its model lineup in Brazil, according to one of the sources.

According to a third source, GM anticipates using partnerships with Hyundai to partially offset its struggling business in China. The company could potentially utilize Hyundai’s small and mid-sized vehicle platforms for potential expansion in South American markets.