Hyundai Motor Group formed a special team of hundreds of key personnel at the Namyang R&D Center earlier this year to address the slowdown in adopting the global electric vehicle (EV) market. This team is developing a new vehicle that is neither a pure EV nor a hybrid—an Extended-Range Electric Vehicle (EREV). The company is considering applying this new technology to its luxury brand Genesis and a wide range of other models.
Traditional hybrids combine an engine and an electric motor to drive the vehicle and recharge the battery while driving. They typically deliver 30 to 40% better fuel economy than gasoline-only vehicles. Plug-in hybrids are different as they can be charged externally.
Like hybrids, the EREV features a battery, motor, and engine. Typically, the EREV runs 200-300 kilometers on a charged battery like a pure EV. However, when the battery is nearly depleted for long-distance travel, the engine can generate electricity to recharge the battery, extending the driving range by an additional 100-150 kilometers. The driving range can be extended by several hundred kilometers depending on the battery capacity and engine size. This innovation addresses the issues of range anxiety and insufficient charging infrastructure, which are significant barriers to EV adoption.
As the world grapples with the EV transition, major global automakers are unveiling new strategies, acknowledging that the complete shift from internal combustion engines to EVs may take longer than expected. These companies are developing interim solutions beyond merely increasing hybrid offerings. They are investing in upgraded, next-generation technologies, sometimes called “Hybrid 2.0.”
Earlier this month, Saudi Arabia’s state-owned oil company Aramco invested €740 million to secure a 10% state in ‘Horse Powertrain,’ a joint venture between France’s Renault and China’s Geely Auto. This venture aims to produce engines and hybrid systems for up to 3 million vehicles annually across Europe and South America. Renault and Geely established this company with the belief that there will be ongoing demand for internal combustion engines until the EV transition is complete, a belief that Aramco’s investment supports.
Mercedes-Benz CEO Ola Källenius announced last month that the company increased investments to maintain its internal combustion engine competitiveness through 2027-2028. Meanwhile, United States-based Stellantis acquired a 21% stake in Chinese EV company Leapmotor for $1.6 billion, aiming to produce and sell Leapmotor EVs in Europe. This move represents a strategy to purchase rather than develop new technology.
Japanese companies, known for their hybrid expertise, have also embarked on developing next-generation technologies. In May, Toyota announced a partnership with Subaru and Mitsubishi to create a new small engine that can use diesel, gasoline, or hydrogen fuel. This engine can also be paired with batteries for hybrid vehicles. Honda has started developing a next-generation hybrid vehicle with all-wheel drive technology suitable for EVs.
