Financial Times headline: Hyundai is catching up with Tesla in the global EV race
The weak Korean currency is helping the carmaker absorb rising battery and component costs
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https://www.ft.com/content/78e1e150-02ba-404d-b2a1-3780279ec…
". . . Shares of Tesla trade at 60 times forward earnings, more than 10 times that of Hyundai. Hyundai’s soaring electric car sales and the resulting record earnings in its latest quarter have done little to change the relative pessimism. But Hyundai’s pace of change has been much faster than expected. Its Ioniq 6 electric sedan can travel up to 610km (379 miles) on a single charge — longer than the Tesla’s Model Y and Model 3 Long Range. Its Ioniq 5 electric SUV has become the best-selling imported electric car in the US. Remote software updates are starting to be rolled out.
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In the coming months, electric carmakers face an uphill battle to protect margins as costs rise. Prices of lithium, a key battery material, remain near historical highs. That has pushed the price of batteries up, to up to 60 per cent of the total cost of making an electric car. Tight margins at global battery suppliers suggest there will be no let up in battery prices. That leaves electric carmakers to deal with the burden.
Here Hyundai has an advantage. A weaker Korean won, which has fallen 13 per cent against the dollar this year, translates to a boost of more than $1.6bn to the top line in the latest quarter. That has helped it absorb higher battery and component costs without taking a hit to margins. It uses local battery suppliers, meaning a more stable supply chain and lower currency fluctuation risks.
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