Hyundai Motor in GM tie-up talks; sees revenue growth slowing in 2025

Hyundai Motor is in discussions with U.S. automaker General Motors (GM) regarding the supply of commercial electric vehicles (EVs), joint parts purchasing, and collaboration on passenger vehicles.These talks aim to finalize binding agreements within 2025.However, the company forecasts its revenue growth to slow from 7.7% in the previous year to 3.0%–4.0% in 2025, with operating margins declining from 8.1% to 7.0%–8.0%.This outlook is influenced by uncertainties such as potential policy changes in the U.S., stricter emission regulations in Europe, and a slowdown in EV demand.Additionally, Hyundai reported a fourth-quarter operating profit of 2.8 trillion won, falling short of analysts’ expectations.Despite strong sales in the U.S. and India, overall global sales declined due to sluggish demand in South Korea, Europe, and China.Furthermore, U.S. President Donald Trump’s consideration of imposing import tariffs and eliminating EV tax credits presents additional challenges for the company.

Explanation and Impact

The collaboration talks between Hyundai Motor and GM aim to strengthen their positions in the commercial EV market.However, the anticipated slowdown in revenue growth and operating margins reflects challenges such as global automotive demand deceleration and policy uncertainties.Potential policy changes in the U.S. and stricter environmental regulations in Europe could directly impact Hyundai’s performance.Additionally, a slowdown in EV demand poses risks to the company’s electrification strategy.

Explanation for Beginners

Hyundai Motor is collaborating with GM to enhance their presence in the electric vehicle market. While this sounds promising, they have predicted slower revenue growth in 2025. This is mainly due to external factors like changing government policies, stricter environmental rules, and a global slowdown in car demand.

Think of it like running a lemonade stand: if the city suddenly decides to raise the cost of lemons or change the rules about where you can sell, it could impact how much profit you make, even if you have great customers.

For new investors, this means paying close attention to the bigger picture—not just the company’s plans but also what’s happening in the world around it. If you’re thinking of investing, consider whether you’re comfortable waiting for the company to overcome these challenges. A long-term perspective can help you avoid worrying about short-term ups and downs, and you can make informed decisions about when and how much to invest.