Genesis will add hybrid powertrains to its lineup to adapt to changing consumer demand, becoming one of only two premium automakers to offer the technology.
The premium brand was previously focused on transitioning directly from internal combustion vehicles to electric vehicles, but the new shift positions hybrids as a bridge technology.
Its parent company, Hyundai Motor Co., said Aug. 28 that it will introduce two new gasoline-electric powertrains: a next-generation version of its existing hybrid system and a new extended-range electric vehicle, or EREV, system that uses an electric motor to drive the wheels and an internal combustion engine to recharge the engine’s battery.
The move, announced by Hyundai CEO Jaehoon Chang in Seoul at the company’s annual Investor Day strategy briefing, is driven by evolving market conditions and a recent slowdown in electric vehicle sales growth.
Both systems will eventually be used across Genesis’ portfolio. While the South Korean automaker said it planned to put the updated hybrid system in Hyundai-branded vehicles starting in January 2025, it did not specify a timeline for Genesis.
The company also said it would bring the extended-range electric system to the North American market by the end of 2026 for midsize crossovers from Genesis and Hyundai.
Consumer demand for conventional gasoline-electric hybrids has surged this year as electric vehicles remain unaffordable for most mainstream consumers, and the buildout of electric vehicle charging infrastructure has been slow.
“Customers who live in Los Angeles or the states where there’s more charging infrastructure are embracing electric vehicles. But if they’re in the middle of the country, for example, a hybrid is more their speed,” Ash Corson, Genesis’ director of product planning, told Automotive News this month.
Corson’s group has been working closely with retailers so the brand can bring “the right product, at the right time, to the right place.”
Adding hybrids is part of that plan, he said.
The news comes months after Hyundai Motor North America CEO Jose Muñoz said the company intends to add hybrid production to the EV and battery plant it is building in Bryan County, Georgia. The Metaplant is set to open in October and will build EVs for Hyundai, Genesis and Kia.
Industrywide, hybrid sales rose 34% through July, accounting for 9% of all new vehicle sales, according to data from Motor Intelligence. Hybrids accounted for 7% of all U.S. sales during the same period last year.
The Genesis could take advantage of Hyundai Motor Group’s suite of hybrid technologies.
Hyundai, for example, already has a very complete portfolio of hybrid crossovers and sedans. Through July, sales of Hyundai’s four hybrids were up 28% and accounted for 14% of Hyundai’s total volume — up from 11% in the same period last year.
“Automakers around the world are finally realizing there is a necessary step between all-gas and all-electric vehicles,” said Sam Fiorani, vice president at automotive data firm AutoForecast Solutions.
“Genesis can use the motor and battery technology currently under development to create better hybrids that enhance the luxury car experience,” Fiorani said.
Lexus is the only luxury automaker that offers standard gasoline-electric hybrid powertrains, though some offer plug-in hybrids. The brand has successfully leveraged the hybrid system from its parent company, Toyota Motor Corp., which pioneered the technology in the Toyota Prius.
Lexus currently offers the alternative powertrain in seven of its models. Hybrids accounted for 30 percent of the brand’s total sales in the first seven months of the year; Lexus’ hybrid volume increased 30 percent in the same period.
Genesis’ current global goal is to eliminate the sale of new gasoline-powered models by 2025, on track to become all-electric by 2030.
A Genesis spokesperson said they will not make any changes to their current commitments “for now.”
“Genesis has already softened its outlook for electric vehicles, leaving room to launch hybrids later this decade,” Fiorani said.
He expects Genesis to delay its plans for all new vehicle launches to be pure electric until 2030 or later. It depends on “political pressure and how quickly mainstream buyers adopt EVs,” he said.
Hyundai Motor Group is spending $7.6 billion to build its Metaplant based on a dedicated EV platform called IMA. This next-generation platform will succeed the E-GMP platform that currently underpins EVs from Hyundai, Genesis and Kia.
But with hybrids on the agenda, the group may be designing the platform so that it can accommodate hybrids as well as electric vehicles.
“While the IMA is geared toward electric vehicles, it is very likely that it will evolve toward hybridization potential, and its replacement could be fully electric,” Fiorani said.
“We’ve heard of a lot of platforms that were announced as being electric-only, but then they added a motor,” he said.
Fiorani noted that early announcements for Stellantis’ STLA platforms focused on its EV models. But as production approached, they evolved to include internal combustion engines in hybrid and extended-range EV configurations.
“Dynamic platforms,” he said, “are the necessary transition step for many manufacturers in the next decade.”