Hyundai to Bring Back Internal Combustion Engines After Dismantling the Division

Hyundai’s U-turn from electrification
Reviving the Engine Development Division
Recruiting scattered personnel

Just a year or two ago, the atmosphere was rife with anticipation for the imminent arrival of the electric vehicle era. Even long-established automakers had given up their insistence on internal combustion engines, with some companies publicly committing to cease engine development. Hyundai was one of them.

Having swiftly captured the market with its EV-specific architecture, the E-GMP, Hyundai disbanded its engine development division and reassigned related personnel to other departments. However, recent developments have seen a resurgence in opportunities for internal combustion engines, making their previous decision seem like a mistake. In less than three years, news has surfaced that they have embarked on new engine development.

Developing a New Engine in Response to Euro 7

According to a report by the local media outlet Electronic Times on the 24th, Hyundai Motor Group has established an engine design department within the Electrification Performance Development Center in the R&D headquarters. The division, composed of 150 to 200 members, has gathered the scattered engine R&D personnel previously dispersed to the electrification department. They are currently recruiting additional personnel from both inside and outside the company.

The engine design department is under the command of Yang Hee Won, who took office as the head of the R&D headquarters in January. The department discusses various measures, including developing new engines for upcoming releases and technical responses to the European Union’s (EU) emission regulations, Euro 7. Why did Hyundai suddenly revive its engine development department?

Reality Far from Expectations

Previously, the Hyundai Motor Group had boldly restructured its organization at the end of 2021, switching the responsibility of the powertrain division to electrification development and establishing a new battery development center. The goal was to shift the core axis of R&D from internal combustion engines to electrification. The industry was concerned about the organizational restructuring at the time, stating, “Hyundai has gone all-in on electric vehicles.” However, over the next two years, the market atmosphere exceeded Hyundai’s expectations. The growth of EVs slowed down while emission regulations in key markets such as Europe and North America were relaxed.

The original plan of the Hyundai Motor Group was to phase out pure internal combustion engine models in the European market and replace them with pure electric and hybrid vehicles. At that time, the EU had announced the Euro 7 regulations, known as “the end of internal combustion engines,” putting pressure on the automotive industry. However, as the industry criticized and resisted these regulations as unrealistic, the EU eventually decided to relax the emission regulations to the current Euro 6D level. The U.S. Environmental Protection Agency (EPA) also eased some requirements to give the industry time to respond, gradually applying the new standards between 2027 and 2029.

Likely to Develop Genesis HEV

Hyundai’s engine design department plans to focus on developing a new engine in response to the introduction of the Euro 7. Despite some relaxation of regulations on pollutant emissions, testing standards have been raised, presenting many challenges to address. In addition, the need to introduce hybrids to the Genesis models continues to be raised, and the development of a dedicated powertrain is expected to proceed.