Hyundai Motor Alters Self-Driving Tech Focus… Hyundai AutoEver's Standing at Risk, CEO Kim Yoon-gu Faces Strategic Test

[Korea Financial Times, Kim JaeHun] Hyundai Motor Group has made a bold move to reorganize its autonomous driving technology, shifting its focus from the previously emphasized radar-based approach to camera and other module-based technologies in pursuit of commercializing autonomous vehicles. This shift has raised concerns about a possible contraction of Hyundai AutoEver’s business, which had been developing autonomous driving technologies based on radar and high-definition maps.

The securities industry has also lowered its target price for Hyundai AutoEver, stating that “the company’s importance within the group needs to be reassessed.” With Kim Yoon-gu, who took office as Hyundai AutoEver CEO last year, focusing on recruiting software talent for automotive applications, attention is now on whether the company can secure new momentum.

Hyundai AutoEver is an SI (system integration) affiliate responsible for Hyundai Motor Group’s IT systems. In 2021, when Hyundai Motor Group declared its transition to SDV (Software-Defined Vehicle) and began pursuing future mobility including autonomous driving, Hyundai AutoEver pushed related software development as a new business. In particular, the company accelerated the development of autonomous driving technologies by leveraging its existing navigation software business, high-definition maps, radar, and vehicle control software.
However, concerns over business overlap arose in 2022 when the domestic autonomous driving startup 42dot was incorporated as a Hyundai Motor Group affiliate. In fact, Hyundai Motor Group selected 42dot as its dedicated affiliate overseeing autonomous driving and announced plans to commercialize Level 2+ autonomous driving by 2027.

The issue is that as the group transitions from its existing high-definition map and radar-based technologies to 42dot’s camera and module-based autonomous driving development, there are growing concerns that Hyundai AutoEver’s status within the group is being diminished.

The securities industry has also pointed this out, raising questions about the growth potential of Hyundai AutoEver’s HD Map-based new business in the automotive software sector.

Shin Yoon-chul, a researcher at Kiwoom Securities, recently stated in a report, “Recently, Hyundai Motor Group’s autonomous driving company 42dot has begun developing a fully autonomous model that does not utilize lidar or HD maps. As a result, Hyundai Motor Group’s fully autonomous driving business has become divided into two tracks. It is time to reassess Hyundai AutoEver’s importance within the group.”


Although Hyundai AutoEver’s automotive software division has shown increasing sales, analysis suggests that the growth rate is slowing each year, indicating a need for new momentum.

Hyundai AutoEver’s automotive software division recorded annual sales of KRW 500 billion in 2022 and KRW 639.6 billion in 2023, a growth of 27.9%. However, in 2024, sales are projected to reach KRW 804.4 billion, with the growth rate slightly declining to 25.7%. The securities industry estimates that this year’s sales in the automotive software division will be KRW 987.1 billion, with the year-on-year growth rate expected to decrease to 22.7%.

The decline in quarterly growth rates is even more pronounced. In the first quarter of this year, automotive software sales were KRW 192.2 billion, an 11.6% increase from the previous year. This is a significant slowdown compared to the year-on-year growth rates of 40.6% and 19.2% recorded in the first quarters of 2023 and 2024, respectively.

Of particular concern is that profitability indicators are declining despite rising sales. In the first quarter of this year, Hyundai AutoEver’s automotive software gross profit was KRW 27.1 billion, a 17.6% decrease from the same period last year. Gross profit, calculated by subtracting the cost of goods sold from sales, is a key indicator for assessing business sustainability. A lower gross profit indicates increased manufacturing and other cost burdens.
Researcher Shin Yoon-chul noted, “Hyundai AutoEver’s automotive software division is a key differentiator compared to competitors. However, if sustainable growth in this division cannot be ensured, the company’s value as a high-PER stock may also be diluted.”

He added, “For a full-fledged stock price turnaround, Hyundai AutoEver needs to present a blueprint that justifies its multiple premium (cloud + automotive software).”

There is still hope for Hyundai AutoEver. Since CEO Kim Yoon-gu took office, the company has aggressively recruited software talent and focused on strengthening SDV technology. In fact, since his inauguration in March last year, CEO Kim has recruited a total of 10 external software experts.

Notably, in March last year, former SOCAR CTO Ryu Seok-moon was brought in as head of software development and quality. In July, Choi Won-hyuk, formerly Executive Director of NAVER Cloud, and Ji Doo-hyun, formerly Executive Director of SOCAR, were appointed as Chief Information Security Officer (CISO) and head of the software development center, respectively.

Kim JaeHun (rlqm93@fntimes.com)