Hyundai Motor Group invests $5.9 billion from overseas reserves into its South Korean electric vehicle (EV) plants, signifying a substantial reshoring effort. The funding, boosted by a 4.6-fold dividend increase from operations in Europe, the US, and India, will bolster the local EV ecosystem.
In other words, Hyundai Motor is reshoring or bringing its reserves back home so they can be used for the improvement of facilities and production of EVs in South Korea. Aside from the automaker itself, its other affiliates and subsidiaries outside of the country will also contribute to gathering the full $5.9 billion investment.
The Seoul-headquartered vehicle manufacturer further revealed on Monday, June 12, that it has also hiked up the dividends from its operations in Europe, the United States, and India by 4.6-fold. According to Korea Joongang Daily, Hyundai Motor reiterated that it would use the dividends as investment funds to give a boost to the local EV ecosystem.
From the $5.9 billion funds, the carmaker will get $2.1 billion from its business operations in India, the Czech Republic, and the United States, while Kia will get $3.3 billion from the group’s subsidiaries in Europe and the U.S.
In addition, Hyundai Mobis is getting $200 million, and the rest of the funds will come from other smaller affiliates such as Hyundai Glovis. The company is expecting 79% of the dividends to be forwarded to the headquarters within the first half of the year and the remainder before the end of 2023.
“Bringing in the profits companies earned overseas to Korea is considered a type of capital reshoring,” Hyundai Motor said in a statement. “The dividends will help Hyundai companies cut back on bank loans, which will enhance our financial solvency and allow us to make an aggressive investment.”
The Korea Times mentioned that Hyundai Motor Group will distribute the funds for the establishment of EV plants in Ulsan, South Gyeongsang Province and Gwangmyeong, Gyeonggi Province. Part of the investment will also go to the setting up of Kia Motors’ EV facility in Hwaseong, Gyeonggi Province.
Photo by: Hyundai Motor Group/Unsplash