Global automaker Hyundai Motors is poised to break new ground by producing electric vehicles (EVs) under the brand Arcfox, a venture it shares with Chinese automaker BAIC Motor Corp.
With this collaboration, the South Korean company sees the Chinese EV industry booming soon especially since it's the largest market in the world.
Is Arcfox Alpha S a Tesla KnockOff?
Arcfox, a product of the Hyundai-BAIC collaboration, emerged in 2017 as a 50-50 joint venture. This electric vehicle brand has introduced multiple models, including the striking Alpha S.
At first glance, it could pass as a Tesla knockoff, since its design is quite similar to the Tesla Model S, not to mention its likeness with IONIQ 6, according to Electrek.
More recently, Arcfox unveiled the "HI" version, featuring cutting-edge Huawei technology that further mirrors Tesla's renowned style.
Hyundai's Drive to Revive Market Share
Hyundai's presence in the Chinese EV market has faced significant challenges. The automaker's market share plummeted from 7% to less than 1% in the past year, resulting in only 254,000 units sold.
Furthermore, Beijing Hyundai reported an operating loss of approximately $598 million (800 billion won) as Hyundai grappled to gain a foothold.
Hyundai's decision to manufacture Arcfox EVs under its brand in China represents a bold and determined strategy. It's a clear signal that the automaker is unwilling to relinquish its presence in the Chinese market.
"The cooperation suggests Hyundai has yet to give up the Chinese market. Hyundai is trying to rebuild a bridgehead for expansion in the country by establishing an EV production line," one source told KED Global.
By establishing an EV production line, Hyundai aims to rebuild its position in the country and reignite interest in its offerings.
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Hyundai's Struggles in Chinese Market
Since 2017, Hyundai has faced hurdles in the Chinese market due to tensions between Beijing and Seoul. The absence of dedicated EV models further hampered Hyundai's prospects, as Chinese consumers favored alternatives.
Even then, manufacturing Arcfox EVs provides Hyundai with an opportunity to reestablish its presence in China. The production, design, and quality control of these vehicles will likely take place at Hyundai's No. 3 plant in Beijing.
As part of its streamlining efforts, the automaker sold one of its five factories in China to Li Auto in 2021. This move allowed Hyundai to focus on more strategic endeavors in the Chinese automotive landscape.
Hyundai's foray into manufacturing Arcfox EVs represents a significant step towards reinvigorating its position in China's burgeoning EV market, and it highlights the company's commitment to innovative solutions in a competitive industry.
Meanwhile, Hyundai India plans to increase production for Exter SUVs so it can compete with other competitors.
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