Hyundai Motor Company (005380.KS) Earnings Call Transcript & Summary

Ladies and gentlemen, please welcome Hyundai Motor Company President and Chief Executive Officer, [indiscernible].

Good morning. Welcome to New York, and welcome to our 2025 CEO Investor Day. Also, welcome to those watching online from Korea. [indiscernible] it is such an honor to host you today as CEO of Hyundai Motor Company. I often say it is a great time to be at Hyundai, and it's truer than ever. I'm very proud of the success our team has been able to achieve and couldn't be more energized about the future. Together with my colleagues, we're going to talk about our 2030 plans and our strategy to continue expanding around the world. We'll give an update on product segments where we see opportunity for greater margin as well as some advances in battery and fuel cell technology. Finally, we'll talk about our financial forecast. Before we get started, I want to address the recent situation at our Georgia facility. I want to express our sincere empathy for the workers from our supplier partner companies who were detained. We understand the stress and hardship this has caused for them and their families, and we are relieved that they return to Korea safely. Many of those colleagues were working on the final calibration and testing of advanced battery production technology and a battery plant supporting our operations in Georgia. As our executive chair said last week, we hope the U.S. and Korea can work on mutually beneficial solutions for short-term business travel, especially for specialized technical expertise. Hyundai has been part of the fabric of the U.S. for nearly 40 years and has operated in Georgia for more than 15 years. Our new facility there represents the largest economic development project in Georgia's history and it's helping transform the region with long-term economic benefits for thousands of families. HMGMA will play an important part of Hyundai's future, which is what we are very pleased to be talking about today. When I look around this room and consider our global stakeholders listening in, I'm reminded that we are not just presenting numbers and strategies. We are sharing our vision for the future of mobility. A future where Hyundai will continue to lead through innovation, adaptability and our unwavering commitment to treating every customer like an honor guest. [indiscernible], our global teams, it doesn't matter if you speak English or Korean as long as you can communicate in the universal language of data. With that in mind, let's start with Hyundai's performance. In 2024, we achieved an all-time annual revenue record, KRW 175.2 trillion in sales revenue, along with KRW 14.2 trillion in operating profit, with an impressive 8% operating margin. Our strong performance continued into 2025. In the first half, we posted record revenues of KRW 92.7 trillion and an operating profit of KRW 7.2 trillion. This is sustainable profitable growth driven by disciplined execution and strategic focus. These results show that our fundamentals are strong. We are not just weathering industry challenges. We are thriving by staying focused on what we can control, delivering beautifully designed, high-quality safety-focused vehicles with technology that customers value. Here in the U.S., we have delivered 1.5 million eco-friendly vehicles and our products are achieving broad industry recognition, 7 Hyundai and 4 Genesis models earned IIHS top safety Big Plus awards. The Ionic 9 was named Top gears, Best 7-seat EV. The palisad1cars.com best 3-row SUV. And globally, the Instar was recognized as the world Electric Vehicle of the Year. But awards don't drive business results, customers do. And these accolades reflect what our customers already know. We are delivering vehicles that exceed expectations across every segment we compete in. Our world-class marketing has a strong presence in live sports, where our brand builds powerful connections with passionate funds. In 2026, Hyundai will deepen its connection with the sports fans across the globe when the World Cup comes to North America. Hyundai is proud to be the official automotive partner of FIFA. And we are excited to have our brands front and center as the world watches the final right here in New York. I hope to be able to watch the beautiful game with you. I'll be rooting for the U.S. and Korea, except when they place pain. This is Hyundai's first CEO Investor Day outside of Korea. We picked the U.S. because it is the engine of growth for our company. We entered the market almost 40 years ago. Along the way, we built 2 U.S. factories and launched a luxury brand, investing $20.5 billion. It has been quite a journey. We delivered our first vehicle in 1986. By '25, we opened a factory in Alabama and sold 520,000 units. In 2017, we delivered 860,000 vehicles, while also unveiling our flagship Genesis SUV. In 2022, we began manufacturing electrified vehicles here and sold 940,000 units. And this year, with the grand opening of Hyundai Motor Group Meta plant America, we are targeting 1.2 million vehicle sales, 1 million of which will be in the U.S. This isn't just growth. It is a strategic sustainable expansion in the world's most important automotive market. But there is an even bigger story to tell. One of Hyundai's greatest strengths is our balanced and diversified global portfolio. With a strong operations in Korea, Europe, India and emerging markets, we built a resilient foundation that helps us navigate volatility and seize opportunities. Among all regions, North America stands out as our largest and most strategically important. It is where our brand continues to gain momentum and where our products and marketing resonates most deeply. But our global footprint demonstrates our true diversified strengths. As first half of 2025, North America represents 30% of our sales volume and 38% of our sales revenue. Europe accounts for 15% volume and 14% revenue. Korea maintained 17% volume and 19% revenue, while the remaining 38% volume and 29% revenue come from other markets worldwide. This geographic diversification provides resilience and reduces our dependence on any single market, a critical advantage in today's uncertain geopolitical environment. From product development to manufacturing, our brand to technology, our capabilities are being recognized across markets. So what's driving this? Our 4 key strengths. First, our global scale. We are one of the top 3 OEMs with a worldwide manufacturing footprint. This is enormously valuable when it comes to global vehicle platforms, technological innovations and supplier relationships. Second, we have a diverse portfolio across regions, product segments and powertrains. We are one of the few global OEMs with products ranging from small cars to big SUVs, commercial vans to semi trucks and buses and even vehicles with fewer than 4 wheels. Third, our localized operations help us stay agile and deliver what each market truly wants. We have embedded key functions like sales, design and supply chains in the heart of each region. And fourth, the power of the group, we are able to leverage more than 50 affiliates in our value chain to give us unprecedented efficiency and scale, enabling us to make strategic bets on the future of mobility. Hyundai Motor Group, our parent company ranks #3 in global sales behind only Toyota and Volkswagen. And in the first half of 2025, we ranked number 2 in operating profit, outpacing Volkswagen and underscoring the strength of our business fundamentals. We are now a top 5 brand in 26 countries and a 12 key markets like the U.S., Canada, Brazil and India, we are in the top 3. A key contributor to this remarkable performance is the 20,000 engineers, 5400 dealers and 17 production plants we have worldwide and the thousands of men and women who built our vehicles with such care. I'm so proud of our global team. They are helping us deliver mobility solutions to customers across regions and with consistently strong performance. Our common platform strategy enables both variety and efficiency. Today 84% of our vehicles are built on just 3 core platforms, allowing us to scale globally while staying responsive to local needs. Models like the Ionic series Tucson, Palisade and Kona are great examples of how this approach delivers high-quality market-relevant products worldwide across a broad range of vehicle segments. One of the things I'm most proud of is how deeply Hyundai is embedded in markets around the world. Our localized operational hubs integrate manufacturing, R&D, sales and support functions allowing us to stay close to our customers and understand what they truly need. This structure is a key driver of our ability to win globally. As you can see, the majority of the vehicles we sell are produced locally. This enable us to nimble in our production mix and minimizes the time between a car rolling off the manufacturing line and getting into the hands of our customers. Moving forward, we see the largest opportunity for increased localization here in the U.S. I'll share more about this later. The Power [indiscernible] Group's affiliates cannot be understated. These companies drive cost efficiencies and enhanced agility and resilience through 4 key areas: one, innovating new business models through robotics, autonomous driving, software-defined vehicles and advanced air mobility via affiliates like Boston Dynamics Superna, emotional and other technology companies; two, driving customer experience and sales excellence through finance, marketing and advertising and technology solutions that enhance every customer touch point. Three, delivering speed and coordination via infrastructure construction and engineering capabilities that allow us to build facilities and enter markets faster than competitors; four, driving cost efficiencies, agility and resilience through our end-to-end vehicle supply chain from steel and parts to engines and logistics. No other automaker has this integrated ecosystem advantage. Despite regulatory and market challenges, we are keeping our 2030 sales target at 5.55 million units. Every region is making significant contributions, especially emerging markets in Asia, plus China. We are targeting 4.17 million this year, growing to 4.64 million in 2027, and we expect to reach 5.55 million by 2030. This isn't a wishful thinking. It is based on approved product launches, planned capacity expansions and market engineering strategies already emotional. This of you or those of you who know me know that I think we can do more. But this is our guidance today. You may notice that our dependence on North America will decrease over time. But this is a strategic choice to ensure we are well diversified globally. As you can see here, North America remains our largest market and continues to grow. But each market is contributing meaningfully to our performance. In Korea, we expect the total industry demand to shrink over the next few years, but we will hold volumes steady and we are better insulated since our commercial vehicles offset decline in passenger vehicle sales. In China, our turnaround strategy showing success, and we are well positioned to be both competitive and profitable. This growth is creating powerful regional synergies, allowing us to scale faster, respond smarter and build a truly agile global business. Our electrification strategy is comprehensive and realistic. Most importantly, it is designed to meet customer demand. We are targeting 1 million electrified vehicle sales in 2025, reaching 3.3 million by 2030. This includes hybrid, battery electric and fuel cell vehicles, recognizing that customers' adoption varies by region and segment. Hybrid sales will increase significantly as we meet customers where they are in their electrification journey. We are not taking a one-size-fits-all approach. Originally, sales of electrified vehicles will more than double in North America driven primarily by hybrids. Europe will see similar growth, though hybrids will be a smaller share of the market. Korea and EV sales will grow significantly and other markets will, of course, contribute significantly to our global electrification goals. Manufacturing excellence is not just the foundation for all this. It is a strategic enabler of everything we aim to achieve. From quality to scalability, our plans are evolving to meet the demands of a fast-changing market. This is how we turn ambition into reality. Our manufacturing strategy is exemplified by Hyundai Motor Group's Landmark $26 billion investment plan for the U.S. between 2026 and 2028, creating 25,000 new direct jobs. This includes our new low carbon steel mill in Louisiana, expanding U.S. production capacity, a state-of-the-art robotics innovation hub and many additional investments to be announced. This isn't just about tariff mitigation. It is about building the most advanced efficient manufacturing ecosystem in the automotive industry. We are proud to announce Phase 2 of HMGMA, this is a major step forward in our U.S. manufacturing strategy, and they will expand production capacity by 200,000 units by 2028 with a clear focus on hybrids and battery EVs. This $2.7 billion investment over the next 3 years is not just about scale. It is about building the right mix for the U.S. market, investing in our suppliers and partners in the state of Georgia. With 3,000 new jobs created, we are reaffirming our commitment to the community and the region and to the future of mobility. Our investments in North America are not reactive. They are part of a long-term strategy. Back in 2019, we began shifting our U.S. production mix towards high demand SUVs laying the foundation for profitability. Since then, we've increased SUV production to 100% of our regional capacity with steadily expanded capacity most notably with HMGMA focus on high-margin hybrids and EVs. Alongside this, we work closely with group affiliates like our production partners, Mobis and Glovis and our battery partners to localize operations building a robust integrated ecosystem. Now we are entering the next phase. By 2030, over 80% of our U.S. sales will be produced locally. We are increasing local supply chain content from 60% to 80% and maintaining over 95% plant utilization across our facilities. This is how we mitigate tariff impact enhanced pricing and increase efficiency and secure long-term competitiveness through consistent and strategic investment. Alongside our expansion in the U.S., we are accelerating global production capacity across key regions. By 2030, we plan to add up to 1.2 million units of additional capacity, this is 200,000 more than announced at last year's Investor Day with new plants and upgraded in Korea, India, Vietnam, Saudi Arabia, North Africa and more. This isn't just about meeting demand. It is about building a resilient, regionally optimized production network that supports our long-term growth. Let me introduce the key plans driving our global manufacturing expansion. First, in India, our Pune plant will open later this year and grow to produce 250,000 units. This will bring our total production in India to over 1 million units. It will serve as a strategic [indiscernible] for both domestic demand and exports to emerging markets. Pune has flexible multi-model production in a smart factory that showcases our [ eForex ] vision for the future of manufacturing. Next, in Korea, the Ulsan EV plant will come online in Q1 2026, adding 200,000 units. It is designed as a next-generation facility with advanced automation robotics and AI-based inspection for our new lineup of EVs. It will be a core base for both domestic and global supply. Finally, in Saudi Arabia, we are adding production in Q4 2026 that will grow to 50,000 units. This plant will strengthen our presence in the Middle East with localization CKD production and the gradual integration of next-generation robotics. Together, these plants form the backbone of our originally optimized future ready production network. Our manufacturing strategy goes beyond increasing volume. We are increasing quality, efficiency, flexibility and safety in how we produce our vehicles. We are automating production, integrating data and evolving towards a software-defined factory. Today, we are focused on hardware-centric automation and real-time data analysis to optimize production. In the next year or so, we will merge hardware and software as we get ready for software-defined vehicles. You'll hear more about this later. And by 2030, we expect to have a fully built manufacturing environment. At the heart of this is our innovation center in Singapore, HMGICS, where next-generation manufacturing technologies are born and tested. Since its opening in 2023, we've been cascading these innovations first to HMGMA, than to Ulsan and ultimately, across our other global operations. from automated assembly and real-time connected manufacturing to software-defined factory standardization, each innovation brings us closer to autonomous intelligent production. By 2030, we aim to realize HMGICS 3.0, a fully virtual and autonomous manufacturing model. This isn't just about 1 plant. It is about transforming our entire global network. To be clear, our production colleagues are essential to our success. The robot to human ratio will continue evolving as we optimize our processes, but always in service of 3 goals; enhancing working safety and economics, improving quality, consistency and increasing efficiency. We are not trying to minimize human involvement. We are trying to maximize human potential by letting robots handle the dangerous repetitive and physically demanding task while our operations focus on higher value work like quality oversight, process improvement and complex problem solving. The cascading of new technologies from HMGICS to our global plants is already delivering measurable results. We've significantly improved production flexibility. I'm happy to announce will now have the ability to produce 10 different kinds of vehicles, including both HEV and EV models simultaneously, which requires meticulous planning and advanced processes. At our Ulsan EV plant, where we only produce EVs, this number goes up to 12%. Our robot-based automation systems are advancing rapidly enabling predictive maintenance, digital simulation and self-diagnostics across multiple sites. These innovations are not just theoretical. They are being deployed as scaled and are delivering real impact. This is how we build smarter factories capable of adapting to diverse product mixes and future mobility demands. Robotics will be at the center of our innovation journey. Through Boston Dynamics, we are advancing core technologies that enhance operational excellence from intelligent automation to human robot collaboration. These capabilities go far beyond manufacturing, that's shaping the future of mobility, logistics and smart infrastructure. We believe robotics will be a key growth engine for Hyundai driving both performance and transformation across industries. Boston Dynamics will play a key role in our manufacturing capabilities in the future. Have a sneak peak and what will show at CES. [Presentation] Innovation is a core Hyundai value, and Boston Dynamics truly delivers for us. Now I'd like to walk you through some of our future product plans. Product is the lifeblood of our industry. These products are not only aligned with our electrification strategy, they are designed to lead the market with innovation, performance and customer value. They are also designed to provide the greatest return on our investments. We are focusing on high-profit product segments and looking for opportunities in new segments. Here, you can see the global automotive profit pools in each region and segment as well as our performance today. In North America, we have an established brand in SUVs and see further opportunity to go larger with full-size SUVs. We also have ambitions to strengthen our presence in pickup trucks and light commercial vehicles. This is not only true for the U.S., but as you can see, pickups and LCVs are opportunities we are excited about globally. In Europe, we are investing in entry EVs that are purpose-built with European customers in mind. And finally, we recognize that China is leading in EV production and technology, and we cannot afford to miss out. have personally spent significant [indiscernible] time in China. And I know firsthand how competitive it can be. We have a new product strategy, which is to develop in China for China. Each region will take a different path. You can see here that hybrids and EVs are more important. And you can also see a more balanced powertrain portfolio in the future. We are prioritizing large SUVs, pickup trucks and light commercial vehicles as well as high-performance vehicles, all of which provide high margins. I will offer a full spectrum from hybrids and battery EVs to fuel cell vehicles to meet the diverse needs of our customers. This multidimensional strategy ensures we stay competitive, relevant and profitable wherever the market moves. One opportunity we clearly see is expanding our hybrid lineup in response to growing consumer demand. By 2030, we plan to offer more than 18 hybrids for vehicles ranging from entry level to large luxury. This will include Genesis starting in 2026. We are more than doubling the number of hybrid vehicles that we are offering from now to 2030. We'll prioritize hybrid-driven markets like the U.S. We want to ensure we can offer everything our customers are looking for. One of our most important and most profitable vehicles is the Palisade hybrid. We are excited to introduce the all-new Palisade hybrid to the North American market, the first model to feature our largest and most powerful 2.5 turbo hybrid system. This isn't just about adding another option. It is about delivering superior performance and efficiency compared to the ICE model. Not only does it deliver great horse power and torque. But with 34 MPG fuel efficiency, it is 48% more efficient than the ICE variant, giving customers a smarter, more sustainable choice. This launch expands our hybrid portfolio and gives customers more options without compromising on power or driving experience. Pickup trucks represent a white space opportunity, we are ready to capture. The midsized truck segment is 1 of the largest and most profitable in the industry. Since launching Santa Cruz back in 2021, we've gained valuable experience and brand presence in this segment. Now we are preparing to launch a new body-on-frame model before 2030 to build out our truck portfolio with the potential for an HUB variant. This expansion allows us to broaden our reach and connect directly with customers at the heart of the U.S. market. We've also built a strong momentum with our global EV lineup from the Ionic 5 to the Ionic 6, which gets a facelift for 2026 to our flagship Ionic 9. Now we're taking the next step, delivering EVs tailored to each region. In Europe, we just showed the Ionic 3 as a true mass market EV equipped with our next-generation infotainment system. In India, we're proud to launch the country's first EV design, specifically for Indian drivers with a localized supply chain. And in China, we are introducing our first locally produced EV, the Alexion, a C segment vehicle with up to 700 kilometers range, marking a major milestone in our commitment to the Chinese market. We will introduce another C segment EV in China next year as well. Some of our most exciting products are hands and high-performance models. These are born at our Naming R&D center and refined at the Nobel green in Germany, one of the world's most grueling race tracks. This lineup provides an exciting performance halo for our brand. By 2030, we will have more than 7 end models available. We have started this with our ICE and HEV models and then our EVs. We expect and sales by 2030 of over 100,000 vehicles, primarily in the U.S., Europe and Korea, but also in growing markets in Australia, the United Kingdom and Canada. We'll explore the possibilities in China and Japan and continue to expand globally. Earlier this year, we showed the all-new IONIQ 6N at the iconic Goodwood Festival of Speed in England. This vehicle will set the standard for high-performance EVs and embody Hyundai's end core principles, Corner Raskal racetrack capability and everyday sports car. IONIQ 6 will have explosive power with 478 kilowatt dual motor system that delivers 770 newton meter of torque and will go from 0 to 60 in just 3.1 seconds. It is its end battery management system features 3 models or 3 modes to optimize temperature for maximum performance. And it will have all the standard and features that engage the sensors and build an intuitive connection between the driver and the vehicle. The IONIQ 6N is a welcome addition to the end family. As I mentioned, Hyundai N provides a great halo for the brand. It starts with N-performance parts, which enable owners to enhance the regular Hyundai models. Then they are the end models themselves delivering an exceptional level of performance and excitement. Beyond that is our rolling lap with new parts and technologies are road tested. But it is motor sports that truly cement our reputation for advanced technology and performance. And all that delivers enhanced profits. You can see here how significant the end brand premium is and what the value of N parts and services to our bottom line. We are excited about the commercial vehicle business as well. Hyundai is a leader in this market globally. We have production hubs in Korea, China, Vietnam and Mexico delivering more than 14 products through 89 distributors and 474 dealers. We're going to ramp up our presence in the North American commercial vehicle market as well, leveraging our global expertise in R&D and distribution. We already have 56 [indiscernible] fuel cell trucks on the road here, and that number will grow quickly. Hyundai translate already has 29% of the U.S. market for van trailers and we will start production of electric LCVs as early as 2028. You'll see us on the road everywhere. We have great confidence in our product strategy because its vehicle in every category will showcase our commitment to customer value, performance and innovation. And it is Hyundai's ability to innovate with technologies that are changing the very nature of mobility that will ensure our continued success. So here to tell you more is our Executive Vice President and Head of Electrification Strategy, Solutions, Tech unique, my friend, Chang Hwan Kim.

Thank you, Jose. Good morning. Hyundai Motor Company holds the most diverse electrification portfolio among all global OEMs. We have established all relevant technologies so we can maximize customer safety and value. The journey began in 2009 when Hyundai became the first automaker to apply lithium-ion batteries in automotive application. Two years later, in 2011, we introduced a new kind of hybrid system, so-called TMED, which achieved the world-leading performance within this class, featuring key enabling technologies such as battery, power electric systems and contra algorithms became the cornerstone of our leadership in both battery EVs and hydrogen fuel cell EVs. Since its introduction in 2021, our EGM EV platform has been a masterpiece, earning numerous awards from leading global organizations. Earlier this year, we introduced the Hyundai's most advanced hybrid and enhanced fuels systems in PALISADE and Nexon. Our innovation is unstoppable, starting next year, we will introduce a series of groundbreaking innovations, including extended range EVs, luxury hybrids, our next-generation EV platform and for the new fuel cell systems, continuing our relentless pursuit of customer value. In the next few slides, I would like to take you deeper into Hyundai's advanced technology and share how we are shaping the future of EVs. When Hyundai introduced the first version of the TMED hybrid systems in 2011 Sonata, it delivered more than 60% improvement in fuel economy and over 20% increase in power compared with the conventional [indiscernible] is vehicle, making it 1 of the most competitive hybrid systems in the compact and midsized segments. At the core of Hyundai's hybrid technology are high-performance batteries, high-efficiency systems and advanced controls that maximize vehicle performance. More than 250 patents in hybrid positioned Hyundai as a leader in electrification. In 2025, we advanced even further with the launch of next-generation TMED 2 systems, featuring the state-of-the-art battery and motor technologies. This system applied in large vehicle segments delivers 4.3% greater fuel economy along with a significant performance compared to the current TMED 1. It will be the foundation for rear-wheel-drive luxury hybrids, offering the customer broader options in the future. Hyundai's innovation in electrification not only elevates vehicle performance, but also unlocks the new possibilities in the real-world customer experience. By integrating EV technologies, hands next-generation hybrids offer the customers to enjoy EV-like convenience. For example, to control of the front and rear motors improved both safety and handling creating a driving dynamic comparable to EVs. Additionally, advanced battery technology enables stay mode and vehicle to load, which is now available in hybrids. The hybrid and EV technologies positively creates synergies and accelerate each other's evolution and the evolution of our electrification technology will continue to produce more innovation on the horizon. Our innovation over the years, have enabled us design an alternative platform that offers new values to our customers, extended range EV. The new system delivers an EV-like driving experience and performance while eliminating range anxiety through extra miles generated by engine motor. Most notably, it achieves a driving range of over 600 miles, a defining feature that truly leaves up to its name. Unlike existing ERAs, the Hyundai's unique system takes advantage of 15 years of hybrid and EV development experience. The ultra high-performance battery designed by Hyundai engineers produces the same power with less than half the battery capacity compared to conventional EVs. This optimized balance of battery and motor will reduce the cost without losing EV performance. Among all electrification components, I would like to emphasize that the battery is the most significant factor in determining the vehicle price, driving range, charging speed and safety. When it comes to the battery, the quality matters above all. Because safe and long-lasting battery performance preserves customer value and peace of mind. Here on the left-hand side, we have the durability data from over 50,000 IONIQ 5 vehicles on the road. The result shows that the vehicle retain over 90% of battery performance and life even after 250,000 miles. This is a clear proof that Hyundai EVs deliver enduring value and reliability through advanced battery management as well as the robust battery design with our battery partners. And this technology will not only create the benefits for our customers but also reduce the warranty costs for Hyundai. And looking ahead, Hyundai is preparing for another leap forward. Starting in 2027, our next-generation EVs will feature highly optimized batteries at 30% lower cost with a 15% higher energy density and 15% shorter charging time, dramatically strengthening our EV competitiveness. And this will help accelerate mass adoption of EVs worldwide, bringing us closer to a future where electrification becomes more accessible to all. And safety is the quality that we can never compromise. Our goal is to prioritize technologies that protect our customers in any situation and Hyundai batteries are equipped with an industry-leading battery management system that performs real-time predictive diagnostics, rapid detection of normally, it enables proactive responses even before on any unexpected condition. And starting next year, we will take this quarter with a cloud-based BMS. With this advanced feature, we will be able to deliver even faster and more precise predictive diagnostics for the high safety. In addition, our battery pack features multiple layers of exclusive safety technologies such as separation barriers, ultra site release, refractory shields and safety events. Altogether, they prevent the thermal runaway by mitigating temperaturized, releasing accumulative gas and cutting off the relays when necessary. I believe Diane will remain committed to advancing battery technology to meet the high standards of safety. Now let me switch gears to the fuel cell. Another area where Hyundai is a true front runner. We are the undisputed leader in the fuel cell EV market. We hold more than half of the world's passenger FCEV sales a position where we have sustained through our unwavering dedication to hydrogen. Beyond sales, we have accumulated over 1.1 billion miles of rearward driving data, which is a powerful foundation for technical innovation and quality improvement. Also, 1 of the key measures in fuel set performance is hydrogen fuel economy, and Hyundai achieved a maximum efficiency of the 62% and well above the industry average. And this enables our customers to drive more than 440 miles on a single charge making Hyundai vehicles the longest range FCEVs in the world. More importantly, it provides the customers with a sense of freedom from range anxiety as well as lower hydrogen consumption relating to reduce the total cost of ownership. Hyundai's FCVs have been and will continue to evolve. We're now channeling our capabilities into our next-generation fuel cell systems for commercial vehicles. Our goal is to double the power and durability while drastically lowering cost, by achieving high performance, durability and cost competitiveness on par with ICE vehicles. We believe Hyundai will refine the future of the commercial vehicle market. Hyundai has market proven leadership, breakthrough technology and bold future vision for commercial applications. And this is why we will remain the true frontrunner in the fuel cell. The journey of electrification began with hybrids and Hyundai Motor Company is creating mobility solutions that are safer, smarter and more efficient and our vision will go beyond personal mobility, delivering customer-centered solutions for a sustainable future. Now Softer will play another big part in their development. And here to tell you more is the Senior Vice President, Head of Autonomous Driving Development Center, [indiscernible] up to the stage.

Thank you, Chang Hwan. Good morning, everyone. For decades, automotive industry was defined by 1 simple goal: build and sell quality vehicles. Today, that paradigm is fundamentally shifting. The power of flexible and scalable software has unlocked the potential for vehicles to continuously evolve long after they leave the factory. This is not just an industry trend. Customers are rapidly embracing these changes as well. They are now expecting smarter, more personalized experience from the vehicles that constantly improve over time to lead this new era. Hyundai has developed a clear software-centric strategy. We are convinced that the future industry leader will be defined by the ability to harness the full value of software, not just to advance the vehicle but to entice the entire customer experience. The environment of this strategy is our new global mobility brand, players. Today, I will outline the 4 key pillars of our plan to lead the transition into software-defined vehicle or SDV era. This transformation begins with the radical simplification of the vehicle hardware architecture on new platform we call KODA. KODA consolidated dozens of individual controls into unified system that is standard across our entire vehicle lineup. Instead of oriented system by individual functions, we structure them into computing domain and I/O domains. We developed high-performance vehicle computer, HVC, to build a shared computing environment and place done controls near the sensor and actuator to reduce widen complexity. This is the breakthrough. Instead of developing new physical hardware for every new feature, we can now deploy software updates on [indiscernible] and Jon controller. This dramatically reduces complexity, cut costs and accelerate our development time line. However, this simplified hardware is only half the equation to unlock its true potential, we need an equally revolutionary [indiscernible] layer to run on top of it. That layer is our proprietary operating system vehicle OS. We recognized [indiscernible] that owning the core OS is a nonnegotiable computer leadership. It is the key to controlling the customer experience and unlocking future value. Unlike treasure vehicle software, which is lock to specific hardware, players vehicle always create a clean separation between the vehicle software and its physical components. It introduces hardware abstraction layer that decouple software from its hardware components and resolve structural limitations. This allows our developers to innovate at the speed of software, not a speed of hardware manufacturing. Additionally, this fundamental shift enabled us to rapidly deploy new features, critical security updates and performance update over the year, delivering a safer, smarter and constantly improving experience directly to our customers. With this powerful OS in place we can now revolutionalize the most visible part of the software experience, the infotainment system. We call it [indiscernible], our next-generation infotainment platform -- it's more than just a screen. It's a dynamic connected or proposes digital life, featuring multi-window functionality deep personalization and vibrant end market open to the third-party developers. Players Connect will begin rolling out our new models in the second quarter next year. More importantly, this platform is our gateway to a recurring service-based revenue model, allowing us to offer constantly expanding set of digital products and experiences to our customers. Finally, we layer on the most critical components that ties everything together, artificial intelligence. Our AR is built on 3 powerful synergistic engines. First, Atria AI delivers advanced autonomous driving based on [indiscernible] deep learning models without relying on high depiction [indiscernible]. This breakthrough enhances both cost efficiency and scalability, making autonomy more critical and deployable. To accelerate this future, we are actively working with [indiscernible] and emotional leveraging their deep expertise to deploy the next generation of autonomous driving. We are executing a clear plan from initial validation to mass production. One pace -- our pace car goes on road next year. In 2027, we launched [indiscernible] system followed by urban develops system in 2028. Secondly, gaAI,,defines, how driver interact with their vehicles, delivering more into personalized experience through natural language interface. Third, Capra AI analyzes large-scale vehicle data to improve fleet operation efficiency. It offers a powerful competitiveness as a fleet AI solution in the B2B market. These 3 AE engine forms a comprehensive intelligence layer that long and improve with every mile driven. This is how we move beyond simply build costs to creating intelligent mobility solution that will shape the future. As you have seen today, these 4 pillars caught KODA, Plus Connect and our AI engines are more than just the strategy. They are our blueprint for leadership in the software-defined area. They walk together achieved on cargo transform our relationship with our vehicles and customers. We are moving beyond onetime sales to building liveshone connections, delivering continuous value through intelligent software better and services. This is how we lead the next generation of mobility, thank you. Now it's time to take a closer look at our luxury brand. [Presentation] Nearly 10 years ago, Hyundai announced a bold new ambition to launch Genesis as an independent global luxury brand. We are confident in the brand's bright future, but humbled by the challenges we face as a newcomer in a very competitive market. We've reached 1 million cumulative unit sales in 8 years, faster than any of our competitors. Genesis is contributing double-digit profits and adding tremendous value to the business in the 20 markets where we are present. One of the keys to the brand's early success has been its award-winning product lineup, impressing consumers and industry experts alike. Our complete portfolio of 6 model lines has won numerous cycle late for its bold designs refined driving experiences, advanced technologies and leading safety. You can see the Genesis profit pools in each region and segment as well as our performance today. We see opportunities across all regions and segments to maximize profitability. As we approach our 10-year anniversary, we look back funnily on all we have achieved but are keenly focused on the next chapter for Genesis and how we can meet consumers' needs in each and every market. In the next decade, we will be very intentional in how we grow the brand profitability by targeting the right segments, the right technology and the right markets. Our brand ambition is to strengthen our luxury lineup with high-end SUVs, performance vehicles, hybrids and ERVs and continue expanding into global markets. To ensure our success, we continue to ask ourselves how can Genesis truly redefine automotive luxury. Our answer, Genesis will focus on 4 pillars for future products. First, offering vehicles in all luxury segments that provide a truly elevated experience for high net worth customers. Second, deepening our emotional connection with customers, through refi luxury and [indiscernible] ship intended to appeal to a select few. Third, offering a bespoke program that enables the customer to fully customize the vehicle and fourth, infusion relentless performance and emotional connection into the brand's DNA. So here is how we'll do that. We'll go be joined the brand's existing model lineup to create new flagship vehicles. For example, an off-roader infused with the spirit of adventure, just like the X Grand equator concept in the back of the room and also a full-size flagship SUV of majestic presence. We are also evaluating an elegant convertible with an emotional look and feel that reinforces Genesis reputation for design leadership. And we are working on a concept that expresses the emotional thrill of the racetrack while on the road. These vehicles, which are currently concepts exemplify our ambition to offer leading products that deliver exceptional experiences. Our one-on-one bespoke program developed in the Middle East will connect with customers by ensuring that every detail material and color is tailored to bring the personal story to life. So the vehicle expresses their own unique identity. We're looking forward to introducing these bespoke offerings in global markets. And we will infuse high-performance emotional fund to drive characteristics into the brand's DNA by channeling the spirit of a racing team. Genesis MAGMA stands for more than just an accelerating driving experience. It will feature both comfort and the excitement of electrified high-performance engineered for the role. We will introduce the all-new GV60 Magma in Q4. But our high-performance ambitions don't stop there. Late last year, we announced Genesis Magma racing, establishing a new chapter in the brand's history that will bring on track technological breakthroughs and a halo effect to the Genesis product portfolio. Genesis Magma racing will compete in the global for Endurance Championship, hypercar series starting in 2026 and in the U.S. inside sports car championship from 2027. Development of our race car is well underway with a successful engine fire up and on track testing taking place earlier this year and our world-class driver lineup has already seen success in the 2025 European Liman series winning on their debut. As we expand our global presence we must meet the diverse needs of customers around the world. So we are also broadening our electrification strategy to include our 3 distinct production systems, battery EVs, hybrids, and ERVs. This diversity ensures that we can navigate market conditions successfully and help customers find the best fit for their lifestyle. Genesis is investing heavily in a future product lineup that will drive our customer journeys. We are customizing a global platform that will allow Genesis to maintain its strong design and performance identity, while leveraging the scale of the group. The new platform come into 2028 will have the flexibility to apply our 3 powertrains, BEV, ERV and hybrid. And our next generation of products will, of course, have software at their core, with SDB intelligence to support enhanced personalization and offer a greater variety of services. This year, Genesis sales will reach 225,000 units globally. We are targeting 350,000 annual sales globally by 2030. This includes a strategic core market growth in the U.S., where we expect sales to increase by 55% with U.S.-based production and EREV launch. In Europe, Genesis will expand in up to 20 markets. In China, we are developing dedicated vehicles based on local technologies for enhanced growth. In the Middle East, we are promoting one-of-one exclusivity and localized vehicles, and we are looking for new markets such as Asia Pacific and other emerging regions. We know that it's not only where we meet our customers, but how we meet them that builds loyalty and retention. With that in mind, we will sharpen our retail competitiveness at all our brand spaces. In North America, we have already opened more than 90 dedicated Genesis facilities in collaboration with local retail partners. And we plan to complete our fully dedicated retail network in a couple of years. You can see how the thoughtfulness of Genesis luxury manifests in the Genesis house just down the street. Genesis House combines Korean luxury and culture in a unique space that embodies our philosophy of some NIM, treating customers like honored guests. I invite you all to come to Genesis House for a Michelin Inspire mill. In Korea, we are expanding our dedicated Genesis space portfolio and providing an exclusive launch delivering private experiences to select VIP customers. We've had great success with VIP customers as the official mobility partner and first official vehicle of the PGA tour. Genesis is also giving back to our communities through philanthropic and art initiatives. Genesis has achieved so much in just 10 years. Now we are embracing the challenge to elevate the customer experience and strengthen our profitability as a refined luxury brand. We have an opportunity to deepen the emotional connection with our customers and nurture their passions in a way that moves us beyond being just a luxury automaker. This will be an exciting and rewarding journey. Now I'd like to shift gears and talk about how we are investing to strengthen the broader Hyundai ecosystem. From purchase to ownership across dealers, after sales and finance, we are building a more connected and resilient customer experience. These investments are not just about today. they're about securing long-term competitiveness and sustainable growth. Our FBB strategy fewer bigger, better is a key success factor in building a more focused and high-performing dealer network. We are consolidating partners efficiently while improving sales effectiveness and driving brand exclusivity. This isn't just operational optimization. It is about turning our dealers into true growth partners. Together, we are creating a network that's leaner, stronger and better equipped to deliver value across the entire customer journey. We are continuing to streamline our dealer network, not just for efficiency, but to elevate the customer experience. By investing in modern customer-centric facilities, we are creating spaces that reflect our brand and build lasting trust. And through our global brand ambassador program, we are deepening dealer engagement ensuring every partner is aligned with our values and equipped to deliver excellence. This is how we turn our dealer network into a true extension of the Hyundai and Genesis brands. Sales finance is a strategic growth engine for Hyundai. It enables us to meet customer needs more effectively, support dealers more competitively and strengthen our business fundamentals. Throughout handing capital and key financing partners, we are delivering an end-to-end experience from purchase to ownership that enhances satisfaction for customers, dealers and the company alike. Our sales finance engine helps us improve residual value, retain customers and grow our brand value. Markets with a strong sales finance coverage show 50% stronger brand loyalty, clear proof that financial innovation drives performance. Looking ahead, we plan to expand our finance coverage from 11 countries to 15 by 2030, increasing our global reach from 62% to 80% of sales. This is how we turn the financial capability into customer loyalty and long-term growth. We are also looking at opportunities beyond automotive finance and Capital overseas KRW 182 trillion of financial assets across a broad portfolio of financial products. The scale of the group allows us to offer a more comprehensive range of products and services. We will continue to grow Hyundai Capital as a leading global mobility finance solutions provider. There are a number of areas where our financial strength can be put to good use, like rentals, commercial vehicles and fleets robotics, robotaxis and hydrogen, even personal loans and corporate finance. Our global scale, our approach to profitability management, our data management and AI integration experience and even our global sales support network make this a natural development. Hyundai's global strength is certainly impressive, but it doesn't mean we have to stand alone. The strategic collaborations are becoming a new growth driver for us. We are leveraging external innovation to accelerate transformation across mobility, technology and customer experience. These partnerships allow us to share core competencies, enter new markets and scale faster. From autonomous fleets to digital retail, each alliance is designed to create synergy and unlock long-term value. For example, we are proud to supply the IONIQ 5 for way more power autonomous fleets, equipped with Waymo's sixth generation fully autonomous driver technology, just like the 1 on display here. We have already inspected and delivered a small fleet and we are preparing for public road testing in the U.S. starting this year. These vehicles will be produced at HMBMA, reinforcing our commitment to U.S.-based innovation and manufacturing. This collaboration is a strategic move that positions Hyundai at the forefront of autonomous mobility while opening doors to new fleet customer opportunities in a rapidly evolving market. We are also proud of our partnership with Motional, who is also a leader in autonomous technology. We are excited to share progress on our strategic alliance with General Motors. Our partnership builds on mutual strengths and shared ambition. One of our first initiatives is to codevelop the 5 vehicle types targeting over 800,000 units by 2028 across North Central and South America. Under this partnership, we are entering the electric commercial van segment in North America with localized production in the U.S. In Central South America, we are expanding into compact cars, SUVs and trucks, leveraging Hyundai's product leadership and GM's deep expertise in pickups. Beyond product, we are exploring collaboration in joint sourcing no carbon steel, propulsion systems, batteries and fuel cells, creating synergy by sharing core competencies across the value chain. This alliance is a powerful example of how we scale faster smarter and more sustainably together. Our partnership with Amazon is transforming how customers discover and engage with Hyundai, creating a new digital purchase journey that complements our existing retail network. This isn't just about online visibility. It is about connecting dealers with new opportunities. We have 80% market coverage via dealer enrollment -- the results speak for themselves. 90% of visitors are new to Hyundai. There is a 39% increase in brand consideration and 27% of buyers are first-time 100 customers. The Amazon partnership is also making clear contributions to dealer profitability through new financing options, accessories and better off-line sales visibility. With Amazon's Net Promoter Score 40 points above the industry average. This partnership is helping us elevate brand perception, reach new customers and drive incremental sales, all while keeping our dealers at the center of the experience. These partnerships are another biggest step in the journey, Hyundai Motor Group has embarked on one of innovation and adaptability, always focused on our unwavering commitment to treating every customer like an honored guest, an anchor in a strong business fundamentals. What does all mean for bottom line I'm happy to introduce Scott Lee, our Chief Financial Officer, to talk more about our financials.

Good morning. How did you find our CEO's presentation earlier I hope it gave you a better understanding of our company's vision and strategy. Now let me begin the financial part, let me start with our revised guidance for 2025. Then I'll provide our future investment plan and mid- to long-term financial target, followed by our shareholders' return policy. At the start of the year, we announced revenue growth of 3% to 4%, OP margin of 7% to 8% on investment plan of KRW 16.9 trillion, and free cash flow of KRW 0.5 trillion to KRW 2.0 trillion. And since that alot has happened, the auto industry is facing many headwinds such as tariffs and the increased competition around its continued macro uncertainty. But I strongly believe that difficult times bring out the best in Hyundai Motor Company. We are even raising our revenue growth target to 5% to 6% thanks to strong sales in North America, higher sales of hybrid and Genesis and better-than-expected ASP growth despite strong time line growth -- we are adjusting our OP margin target to range 6% to 7%. As we face the challengeable tariffs, this target is a rather challenged goal. We believe attaining this target along stands as a meaningful achievement under these challenges by actively implementing contingency plan, we'll minimize the tariff impact on our margin. We have also reviewed and revised our investment plan to KRW 16.1 trillion, accordingly. Our free cash flow is also lower to KRW 0.5 trillion to KRW 1.5 trillion. The industry is facing new challenges more complex than able. However, we will strive to achieve our new guidance -- let's move on to our future investment plan. On your left, our 5-year investment plan for 2026 to 2030. Although we have lowered investment plan for this year, we are committed to increase our future investment. Even in uncertain times, we strongly believe that investment is what makes our future. Therefore, we are increasing our 5-year investment from KRW 70 trillion to KRW 77 trillion. CapEx will increase by KRW 5 trillion due to an increase in product development projects and expansion of capacity in line with our localization strategy. R&D will increase by KRW 1.9 trillion in order to enhance SDV and software technology. In August Hyundai Motor Group announced the U.S. investment of $26 billion, which is a $5 billion increase from March. To your right, you can see our personal investment in the U.S. market. We plan to expand our U.S. investment from $8.8 billion to $11.6 billion. which is an increase of $2.8 billion. The increase of investment will focus on expansion of U.S. product capacity and establishment of robotics ecosystem. We aim to accelerate localization and improve profitability with these investments. Next, I will explain our new mid- to long-term financial target, which reflect the current business environment. Throughout the recent years, we have significantly improved our fundamentals through diversified product and enhanced brand power. However, on with our global OEMs, we are facing a challenging environment shaped by new U.S. tariff pilots and new EV competitors. They become the new Nomar. Despite these headwinds, we would strive to sustain an OP margin of 8% to 9% by 2030. In the short term, we will focus on the continuous mix improvement through higher hybrid and generate sales. We aim to achieve on ex EV sales portion of 38% by 2027. In addition, localization of key product is another priority. We are also entering a strong new motor site with key volume models ready to be launched from next year. Last, but not least, we send the cost competitiveness of our high-bleed system to support mainstream of hybrid. In the long term, we are targeting ex EV sales portion to rise to 60% by 2030. By then, the second page ramp-up of HMGMA will be completed with an annual capacity of 500,000 units. In order to achieve a sustainable 8% to 9% OP margin in the future, cost reduction in manufacturing, EV and STB are key driving factors our mid to long-term profitability. By implementing automation and smart factories, we aim to reduce manufacturing costs and drive global cost innovation through localization of parts and raw materials. For EV we broadened the coverage of vehicle models by diversifying battery cell chemistry and form factor. By applying sale vehicle and utilizing our 161 integrated power module will actively pursue cost reduction for EV. For SBB, we are pushing for caused innovation by decovling hardware and software, integrating software across different vehicle models and establishing cost reduction target for each vehicle segment. For my last topic, I would like to elaborate on our shareholders' return policy. Last year, we announced our value program, which received a positive feedback from the market. And rest here was also the first year that we achieved a TSR of 30% for the first time. Despite heightened macroeconomic uncertainties and rapidly change business environment, we will stay committed to our TSR policy of 35% plus and deliver minimum dividend of 10,000. We continuously deliver shareholders return and enhance corporate value. This marks the end of the financial part of our presentation. Next, our CEO will give us a wrap-up on our Investor Day. Thank you.

Thank you, Scott. Hyundai Motor Company is well positioned to grow as a top 3 brand through our innovative partnerships, dynamic capabilities, manufacturing excellence, new product innovation, Genesis refined luxury and advanced technology acceleration all supported by our global advantage. Plus, we have another asset, our long history of adaptability -- in periods of uncertainty, we have a strong track record of gaining share and improving our business. We expect to do the same this time around. To achieve our goals, we are focusing on synergies within the group, expanding profit opportunities, developing common sourcing, expanding partnerships creating sales finance mobility platforms, sourcing locally, strengthening organizational capabilities through new global functions and utilizing automation to maximize productivity, quality and efficiency. We are not just adapting to change. We are leading it. Through our commitment to electrification, our investment in software-defined vehicles, our focus on manufacturing excellence and our dedication to treating every customer like an on or guest, we're building the mobility company of the future. Ladies and gentlemen, our fundamentals are strong, and our road map is robust. The group is #3 globally in sales and the second most profitable. We have all-time record revenues. We are a top 5 brand in 26 markets. We will sell 5.55 million vehicles by 2030, including 3.3 million in electrified sales. We are adding 1.2 million unit capacity. On the product side, we are entering new segments with midsized trucks and electric vans. We are expanding Genesis and the end performance brand, and we are doubling down on our investments in America, with a $26 billion investment from the group. And we are building it on a strong foundation, Hyundai's commitment to progress for humanity. We remain relentlessly focused on the customer and our employees and committed to shareholder value creation. And more than that, we're doing all we can for the health and welfare of our planet and human kind. Our strategy is clear -- our team is energized. And with your continued support, I'm confident and excited about the future. Thank you for your time, your trust and your partnership in this incredible journey. It is a great time to be with Hyundai and Genesis. Thank you very much.

This marks the end of the presentation. We will now move directly into the Q&A session. [Operator Instructions].

Good morning. I hope you've often enjoy the presentation. My name is Cayan. I'm the CIO at Hyundai Hounde Motor. I will be the moderator for today. So basically, we will open up the Q&A for now. And if you raise your hand, I will definitely use the person. And then if you can actually state your name and the company you're with, and hopefully, we'll try to keep to 1 or 2 questions per person so that we can actually give a lot of opportunities to others. And also if you can actually appreciate. We would appreciate it if you can stay within the scope of the presentation today in terms of question. Okay. So we can maybe start Yes, maybe -- can somebody bring the mic?

Great. Thank you for a great presentation. I think you seem to be quite uniquely positioned in terms of region and powertrain balance and facing less competition challenges from the Chinese EV makers. Especially compared to some of your OEMs peers, right? But I'm just curious, Jose and other senior management. What keeps you up at night? What worries you the most for Hyundai Motors long-term outlook?

Well, let me tell you that everything keeps me up at night. So I sleep very fast and very little. So I think the strategy is what gives us the robustness, as mentioned in all the different missions and elements that we have put together. So the best we lay out that foundation -- we have a thorough execution throughout the group with all the functions with our partners, with our dealers, with our employees, the less things, keep you at night, but there's always something going on, right? But very detailed. I have good quality of sleep.

Thanks Okay. Do we have any other okay Mr. Shin in the back you.

So thank you for the opportunity. My name is Jon Zukin from Morgan Stanley. First and foremost, I wanted to thank the company for hosting a series of event this week. All the hospitality and care provided by the company has been phenomenal. So thank you for that. One question I have is, I believe Hyundai's positioning and strength to capture potential opportunity in the U.S. are pretty well documented and understood by the market. But it's a little bit of a follow-up. But 1 question that we continue to receive from investors is obviously the China competition risk in key markets like Europe, South America and parts of Asia. So -- if you could please elaborate further on your strategy for these markets in order to achieve your mid- to long-term volume targets. And also your expectation of profitability outlook for these markets would be very helpful.

Very good. Well, obviously, this is the first time -- thank you for your comments, and thank you for attending -- and I'm glad the team has done a good job hosting you all in this event and the other events before this. So obviously, we are in the U.S. This is the first time that we are having this CEO Investor Day meeting outside of Korea, and we're very, very happy to do it here. And we've put more of the foundation here. Also, given the current geopolitical and current business environment, this is obviously a very specific moment. But we have also laid out other elements. We could be here a few more hours to explain all the strategies. So you mentioned a few. I will give you some elements. I'm sure we can have other opportunities on one-to-one to elaborate on this. But China, for us, is an opportunity. China for us is all opportunity. And then after a number of years with a lot of struggles we have put, and we are putting together a stronger strategy for the Chinese market very simple. So to be successful in China, we need to utilize and capitalize our Chinese partners. So our strategy passed by strengthening the collaboration that we have with BeiGene Auto is an extremely good partner who have a lot of ideas and a good -- a lot of good capabilities that we're going to see together step by step. That's on the 1 side. Also, we have decided to develop in China for China. And then a company that is fully vertically integrated as I am sure it comes across very clearly in the presentation. It takes a really good courage and the determination to know that for the next phase in China, we're going to localize more. So the intention is to be more local with local technologies with local cost with local partners with local type of products on the 1 side, but also capitalize on existing capacity that we have in China to be able to export to markets, which are very, let's say, China friendly to maximize the existing investment there. So when you look into some of the very obvious opportunities, you would wonder why, for example, Ionic is not in China, right? We are second best selling of EV cars as a group in the United States, and we are very, very top in most markets. And I think we didn't launch IONIQ in China. So that's a very clear opportunity. So also, we're trying to set up good innovation in terms of distribution. So we have set up special FT, which is the internal technology for cross-functional and cross external partners strategy. which we actually will revise on Sunday, Monday, this coming week, where we are addressing every single pillar of this market. I've got to tell you that some of the fundamentals that we've done in other regions have not been deployed in China yet. So I'm very confident that China for us is going to be a big opportunity. Now when you mentioned in Europe, we've also mentioned during this presentation, in Europe, we are developing product portfolio by being more competitive in the entry of the market with ibis. We just announced last week at IAA in Munich. The launch of the IONIQ 3 I have revealed that this is the IONIQ 3. And then this is giving us a very specific competitive advantage. I'm sure you know the market very well, but then you will see that only those who are able to fulfill the European regulation can take advantage in terms of profit with other segments. We are, at the moment, one of the most profitable brands in Europe and still maintaining and growing the business and high share in an environment where most of our direct competitors are losing because of the Chinese. So we have also launched a specific strategies to be able to not only maintain but to grow that. And in the growth plan, we are expecting Europe to step up to the already good work that they've done and continue with that road map. You mentioned other regions. Well, I'm not going to be here all morning and give you all the details. But for example, in Asia Pacific, a very important market for us. we are now deploying a new strategy with a new structure of the group and focusing on markets which are very similar to the European or American markets like Australia, where we have opportunity to be on the group in that market. How well on -- simple 1 is the introduction of pickups that we don't have in most markets, right? So if you compare ourselves to other big OEMs, 1 of the biggest difference comes from lack of pickup presence. So the pickup is going to have an impact on North America, in Central South America, in Southeast Asia, mainly. So that's very important. Also, in Asia Pacific, we have our major hub in terms of manufacturing technology. I mentioned about HMGICS, which is exporting the capabilities of improving automation, quality and cost control. in our factories across the globe. Not to mention the already existing investments that we made in Indonesia with both assembly plant and battery plan with the latest technology, which is going to give us the opportunity to scale up, et cetera. So I think these are some of the key elements, happy, obviously, to meet up with your company to provide you with more India. In India, most OEMs struggle because it's an extremely competitive market. We are 1 of the most profitable companies in India, much better profitability than the leaders. And we remain #2, and we are increasing our capacity India, not only important for domestic market, what we call about 15% share. But very important for export markets, all regions, all the heads of the regional 1 to get product from India because it's high quality is very competitive, right? So with the new Pune plant, by the end of this year, we'll be able to capitalize on that. As you know, we have been the first OEM to go public very successfully in the Indian market and so forth. So I don't want you to come across or just think -- this is just a U.S.-centric strategy, not at all. It is a much broader strategy, not to mention about Genesis brand, whilst the company is going to grow volume by more than 30% globally to the $5.55 million increasing the margin despite the challenges. We are expecting Genesis to grow by 50%, so to contribute even more. And then Genesis is a double-digit profit margin, so it should bring more profitability to the group. So well, those are some of the key ingredients in parallel with the EV, ERV, hybrid, plugging hybrid and fuel LB technologies that are going to be the foundation of the group. So I hope this clarifies a little bit. Thanks for your question.

I hope that answers your question. Okay. Anybody else Okay, we have the gentleman with -- in the back, the third row.

It's Jose Asumendi from JPMorgan. I'm heading up the auto team. Thank you, Jose, for the presentation. Very interesting discussions today. Three questions, please. On the first one, you've done a fantastic job in the U.S., taking market share in the past years. The product portfolio is very strong. Where do you see your market share in the next 3 to 5 years in the U.S.? Do you expect to continue to take share. Second, coming back to the growth by region. Again, coming back to the market share discussion, where do you see, again, the biggest opportunity to gain share with the strong portfolio and that [indiscernible] mix that seems to be very flexible -- and then three, autonomous driving, I would love to understand a bit better, Level 2++ level 3 automomous driving. How do you incorporate this technology into the vehicles and how can you price up the content of the cars and safety into your cars, especially when we think about Level 2 and Level 2++. I know it's a big question as will be different by region, but maybe we can focus on some of the regions like Korea, Europe and U.S.

Very good. So I will tell you. So -- in the U.S., we've deployed a lot of strategies that -- because we've been here with the feet on the ground with a very well trained and then with a lot of in-person interaction with our dealer partners, our external partners, et cetera. I think we've seen the impact. Now we are deploying similar strategies in other markets, adapting to different market potential. In the presentation that I made, there is no 1 region that is going backwards. The only region that is expected to be flat in terms of volume is Korea because the expectation is that the market is going to go down. And we are going with the commercial vehicles trying to offset the market deterioration. But in all regions, we have plans for growth. In the U.S., we have opportunity to grow. So we have significant opportunity to grow. As I mentioned, we are today not competing in the large SUV segment. We are not competing in the pickup segment, okay? Those are mechanical opportunities that are going to give us a big opportunity. We are not pushing for like achieving 1 number. We're doing a good thorough systematic profitable growth. So I don't want to tell you, hey, I want to achieve this number. And then we are 1/10 or 2/10 below. I think we have considerable opportunities to grow in the U.S. without a doubt. And it's today the most profitable market, it will continue to be the most profitable market. But we cannot only depend on the U.S., as you just said. So we are expecting in the profit distribution that other regions like Europe, like the Middle East, et cetera, would grow. So let me give you some other elements. Europe, as mentioned, we have opportunities to grow. Today, we are the first non-European OEM ahead of other Asian competitors doing very well in very competitive and tough markets like Germany with high profitability. But for example, we haven't launched Genesis really in Europe. Now we're in the process to launch it. we needed hybrid to ensure growth. We're going to have it next year. So we are very confident that this is going to give us an advantage. I mentioned also sales finance. So in most markets in Europe, we don't have sales finance. We're going to have in key markets, sales finance, so we'll be able to have platform to be able to create mobility and again, capitalize on profit contribution on those segments where we can continue to grow. Today, we're 1 of the few companies that is not constrained in the growth of hybrid, plug-in hybrid and ice because we have sold enough EVs to be able to sell also the other portfolio. A lot of brands they didn't arrive in a market with the proper EV portfolio, they are not compliant and they are limited on how much they can grow. So I've already mentioned, in India, we are not expecting to grow share. We're #2. We are very solid. But we have more opportunities. This market has opportunity to grow. We want to export no problem there, perhaps an opportunity to launch our luxury brand, okay? So because we have strong credibility. So Central South America and then Asia Pacific, Southeast Asia is a very important pickup market, okay? So we have huge opportunity to enter in that market. We have a strong credibility there. We have good profitability despite the competition, and we are strongly localized. So very good 1 of the most important profitable markets for us, Middle East, we're #2 in the Middle East. So Saudi, but we have opportunity in the Gulf countries. Again, pick up market we don't have. So I think we have very good opportunities organically. And then we are investing to do that, while the 1.2 million capacity investment that we have in the region is going to allow us to capitalize on that. So as you know, I presented here the 50,000 CKD plant in Saudi okay? So this could be the door opener for even more innovation, more sales. Genesis brand is doing well. So we have a specific plan, and I already mentioned about China. And then our share is going to continue to grow. It's going to continue to grow without a doubt. So if you look, for example, Canada, similar market to the United States, right, very, very competitive. We are running more than -- so we could do the same in other markets, right? Canada, also important pickup market, et cetera. So those are some of the elements that have been presented. Again, happy to have more one-on-one discussion so that we don't broadcast to the competition too much the details on how we get things done.

I think there was a third question on the autonomous driving -- maybe Mr.

Yes. Autonomous driving, so let me tell you 2 things there. or the -- and how we can capitalize on the pricing, safety, et cetera. So we are so convinced that the autonomous driving is relevant for the future, that we have a number of strategies that are working in parallel. First, we have created capabilities in-house and also with partnerships like Motional and with external partnerships like Waymo. You can see the IONIQ 5 that is in the back with the Waymo system right behind that. that by next year, we expect to put in the market is a significant volume opportunity for robotaxi. While this partnership can be extended both with our manufacturing operations in the U.S. or with others. So for example, Southeast Asia, we have capacity to be able to do that. But we not only believe in robo taxi -- we also believe in the personal autonomous driving technology. We recently made an acquisition -- partial acquisition of 1 Chinese leading company momentum to be able to have capability in China for China. To your point, you were already kind of making the point that this cannot be just in about our strategy, it needs to be different. So for the U.S. We have emotional, we have Waymo for China will have Momenta and others. We have our group companies like 42. also who are in that domain, coordinating the technology. So -- and then we believe that also, in the long run, this is going to be more standardized and then perhaps there will be more opportunities to synergize. But in the meanwhile, we want to develop in-house. We want to have the capability with our company emotional and then with a third-party partnership in U.S. Waymo, China maybe Momenta and others. So we have been able to increase our net revenue in the last 6 years by about 10 points. So believe me that when we will introduce new technologies, so mobility and others, we try to also capitalize all that, right? So we have grown our net revenue more than our sales growth, which means we are optimizing the mix the pricing, the incentives, et cetera. Thank you.

Okay. I hope that answered your questions. Any other questions? Okay. Over here on the left side.

My name is Jon Yu from Tao Securities. I have 2 questions today. One is about the tariff and the other is about shareholder return policy. So the question is about next year. What if the 25% tariff stays there throughout the entire 2026 -- can you -- or are you still able to defend your profit margin next year? Or maybe you can clarify a little bit on that? And Second question is, do you have share buyback plan this year?

Okay. So let me take the first question, and then I will turn it over to Scott Lee for the second one. So on the tariffs. So the financial projection that we have presented here is predicated upon the 25%. This is what we know today. We thought it wouldn't be appropriate to present to you a forecast, hoping that things are going to change for good with the information that we have today, and everything that happened today, the current situation for us, unfortunately, is 25%. So the margin deterioration is due to that. And I think we were very, very close to maybe if the tariffs would have come down to 15% to be able to maintain our guidance. So just to make it clear, our guidance -- revised guidance provided by Scott Lee today is based on 25%. So for next year, we all hope that both governments will be able to achieve an agreement sooner rather than later, and that would pose an opportunity for this year and then, hopefully, the opportunity to plan ahead next year on a strong performance of the company, even if on the 15%. But I've got to tell you that at the end of the day, on the way we operate, the focus is always on the customer and then on the shareholders. So all we can do is to try to maximize our revenue and try to sell a better mix try to get a better net revenue, which is the reason why also Scott Lee presented the fact that despite higher tariffs our revenue is expected to grow. So -- and that's our plan moving forward. So maybe on the shareholder policy, Scott, you can clarify.

We are discussing how can we make the TSR 35% over. So there is 2 ways to hit the 35% of TSR. The 1 is dividend. And another ways, the buyback treasury stock. So we are discussing internally but we are not finalized yet. So anyhow, we promised this year's TSR should be -- really be over 35%. And -- if I can add a little bit. I mean, basically, what we announced last year in terms of our 3-year share buyback plan that stands basically. So in terms of the exact timing, we cannot really give out the exact timing. But nevertheless, we will hold to the up to KRW 4 trillion share buyback over the next 3 years. Okay. Maybe 1 or 2 more questions, Mr. Hung Paul.

This is [indiscernible]. I got 3 questions. One is about the U.S. pricing outlook, [indiscernible] Russia. So number one, in terms of U.S. pricing, I understand that there's bore-facing or notable pushback from its price hike done in the U.S., it seems like most of the OEMs engaged in the U.S. so far has been pretty quiet in terms of implementing our price hike. They said, we do understand that some of the Hyundai profitability or free cash flow of the U.S. business is not really viable even before the tariff. And so eventually, some of the guys got to do a price hike. So kind of wondering your perspective, what the expectation when we should start see some of your competitors actually doing our some price hike in the U.S. where you expect that to happen sometime in the end of this year or sometime in next year. So that will be my first question. The second question is about the GM [indiscernible] related codeveloping the 5 models with the GM and kind of curious about -- in terms of actual creation of the sales volume done between the Hyundai and GM, respectively, kind curious how things will be coordinated in terms of many different things, including the timing of the launch pricing, manufacturing site and so on, just given the fact that this model is going to be codeveloped. So should we be thinking that the things should be done in a similar way to how things are done between the Hyundai and Kia right now where you guys share the platform, a should things being done somewhat differently when you and the GM does could develop the 5 models for the North America and South America. And the last quick question is about the Russia to understand that buyback of your previous Roche factory, as 6 prior by end of this year, and there seems to some of the talk that Hyundai Motor potentially looking for the opportunity to reach reenter into the Russia. So how you are thinking about that would be my third question.

Very good. So let me try to address those questions. So number one, in U.S. pricing strategy. So let me tell you that as a company, we have been rising prices consistently before tariffs, during tariffs, after tariffs. Always, that's the name of the game. So we cannot just simply wait and see. But we have not taken an approach of just saying, okay, because of time, we're going to go and do this. Why? Because we understand the business and we understand the customers, and we always say that we need to focus on the customers, right? So that's what we've been doing. So our position has been very clear. The cost is the cost and the revenue is the revenue. And we need to address them separately. So in terms of cost, we're taking all actions that we can, commonizing platforms, increasing the volume, and maximizing utilization of our plants, commonizing the technology and working on some cost reduction opportunities. But the most important is that in terms of the revenue phasing opportunities, we take it when we have it. So for example, every year when we launch a new model year, there are new features for the cars and the new pricing, okay? This is what we've been doing. We've noticed some competitors are doing the same thing. Others are doing differently. We're not going to change the strategy and we are constantly evaluating what's happening in the market. So when you have more capacity of 1 car, than the potential that you have in the market. Normally, you need to be more competitive, you need to have more affordable prices. You have to have a little bit more incentives. When you have more demand than capacity, then it's the other way around. So that's how we operate. And I think so far, so I want to give credit to the teams that are in charge of that because it's a very technical data-driven job. But the most important, again, customer oriented. We've seen in the market during the last few months how affordability was so important. So we've been trying to put in the market versions which are more affordable. We've been working with our sales finance company to be able to afford the financing to our consumers through more competitive leasing, APR, et cetera. So that's the situation there. And then, again, for every new car, any new model year, et cetera, we will evaluate. And constantly, we evaluate the situation, for example, delivery and handling, logistics costs, et cetera, et cetera. The competitors, we don't know their strategy, but we monitor every day. Every day, I received a report on what's happening in the market every day. So very, very important. So number two, you mentioned about GM and then [indiscernible] Models coordination timing. So the GM project, I think is a very important one. And the most important is the alignment at the very top, right? I think both the Executive Chair, Mr. Chang and [indiscernible] are aligned on the fact that 1 of the opportunities for both companies to be more competitive is to take advantage of the size, on the synergies, et cetera.p So when it comes to the product development, the policy is very simple. There is a door and is a receiver of that particular product. So -- you're not going to make everything to try to do a hybrid that is not going to work. So the donor takes the initiative and take the lead. And then the receiver is taking advantage of that particular platform or model. But there is an opportunity to start in a way, continuously improve by commonizing suppliers commonizing logistics, et cetera, et cetera. We work, for example, we provide services to GM with Glovis, our logistics partner. So it's a good opportunity for us. is very, very simple, right? So we mainly have been bringing cars from Asia to America. But then American corporations like GM, they need to export also cars outside of America. And in the future, with our investments, we will plan potentially to do so as well. So coordination is done on different dimensions. We have project -- we have products, we have management and top management and is working really well. I'm sure you saw that last week, we were in Detroit honoring the fact that the 100 Centennial awards to our Executive Chair and Hyundai Company was given to Usan Chang. And then also Marmara happened to be the receiver of the Centennial award, and then we could touch base together and is going very well. I think we're just crushing the surface. I think we can do much more together. Already, in my presentation, I mentioned 800,000 cars opportunity once all these projects have been launched, we are studying, as we speak, more opportunities. There are many more opportunities areas for both companies. On Russia, I will tell you that we left the country, and that's the current status. So nothing has changed. So so far, none of these projections are counting on Russia.

Okay. Thank you. [indiscernible].

My first question is robotics. Well, actually, this is currently investor is highly interested in the Hyundai robotics business. Yesterday, we visit the Meta plant. So we are very impressive that your collaborative robotics and industrial robotics and a lot of AGV. So high automation there. So at the same time, it's a questionable with the [indiscernible] robotics are required restore for the Meta plant. So in the context, my question is -- what is the ultimate goal of your robotics business? Is -- what kind of the technology you are focusing to reach the goal. And Well, actually, you announced the invested USD 27 billion for the next 4 years in the U.S. market. So that budget is how big portion is allocated to robotics business, and that area, does that areas include data center impotstructure and was the kind of effort when we can see the invisible outcome, the kind of the -- your export -- and second question is on the slide, so you are trying to reach 80% local production in U.S. factory -- U.S. country. Well, currently, as far as I know, you have the 300,000 capacity in Alabama. And so another 300,000 capacities coming from Meta plant. So combined to capacity is weak at 670,000 units. It means if the own 80% local production light your sales volume would be 850 or 880, something like that. It's far behind over 100 million in sales target. So what is the difference is your sales target and the local production target?

Well, thank you very much. So Robotics is very important and you tell me I'm in charge of Hyundai Motor Company, which is the automotive company. And for us, robotics is the opportunity to increase productivity, to improve quality and to reduce costs. That's how we do it. If you go -- you went to metaplant, you see the AGVs are very precise they allow you to minimize the investment because you don't have conveyors, you don't have all these type of all production systems. And then as you noticed, they are autonomous. So the moment they need to be charged. They know they got the chart themselves. And when they are charged, they come back in line, et cetera, et cetera. So the robotics, we also utilize to avoid some of the tasks that are painful or hard for the humans. So these are not meant to substitute humans. It's not like you want to do a one-on-one, et cetera. But again, to improve the profitability of the operation, increasing productivity, improving quality reducing cost. That is the most important. So we have not made announcement yet. We have obviously a plan, but I'm not going to reveal here that plan today. on how much money is going to be allocated to the different projects. But obviously, every time we make an investment, we do our net present value, the return on investment calculations and we try to be wise for the group to be able to maintain our commitments with the market and with yourself. So still not announced, we will at some point, but we have not announced yet the final investment breakdown. And on the production, let me just clarify a little bit. So today, we have a full capacity in Alabama of 400,000, not 300. So this year, we're going to do 358,000 units. And then because we have a very complex portfolio in the plant, and it's a plant, which is 20 years old. We celebrated this year, the 20 years anniversary of this plant. As this plant gets a little bit more modernized and the product portfolio gets a little bit more rationalized, having a second plan for us. I think this plant can get to close to 400,000, which has been the capacity they had in the past. And then also in HMGMA, the Phase I was 300,000, but the day of the grand opening in March, we already announced the expansion to an extra 200,000. Since we already saw because of the localization factor that we had before tariffs that we needed to have more production capacity in the U.S. So again, the 80% is very important because we believe is a percentage that is going to allow us to be self-contained to depend on us for the growth and then potentially take opportunities, but in particular, for the Genesis brand. At the moment, we are only producing 1 car, the GB70 in Alabama and then we, given the importance of the U.S., which is meant to grow the most in the Genesis brand with the highest profitability, we want that more Genesis vehicles are produced in the United States. So we have not announced yet where this will happen, but that's our intention. And then definitely, as answered to some of your colleagues, we have aspirations to grow more in the U.S. market. So this year, we're planning to do about EUR 1 million. We see more opportunity in the U.S. market in the years to come.

Also, we have Mr. Hyungseok Lee here with the EVP of Global Strategy Office, you can maybe add a little bit on the robotics.

Yes. So if I add some more words to what Jose just mentioned, our robotic strategy is to utilize both the leading technology of Boston Dynamics and the business presence in robotics area and also our world-leading manufacturing technology together. So we recently announced the dedicated robotic manufacturing plant. And along with this, we will also build a dedicated pilot center in between robotics and the manufacturing facilities so that we can apply properly our world-leading robotics products on tower manufacturing facility. And then this will be a huge impact for both our robotic strategy and also to fulfill our vision for the next-generation manufacturing technology. So it's not about just showing off. We will utilize the real-world application onto our manufacturing lines. fully utilizing the real data coming from our manufacturing lines. So with this is -- we will be in the leading position to pursue to capture a lot of opportunities arising in this robotics area. For example, with this dedicated manufacturing plant, we will have a cost-efficient robotics product in the future. And also, we will invest on the ecosystem of robotics industry. So we will come up with a lot of solution with the component and the system provider for robotics. And for that, Hyundai Motor [indiscernible] is being made to make that kind of ecosystem and also already Boston dynamics is a leading position in terms of robotics business. So we know the business and what kind of service should be associated to these initiatives. So we will also invest in that area. So Hyundai Motor Group's approach for robotics will be ended from development, pilot manufacturing and service. So with this, we will also propel our vision for robotics and also we will enhance our manufacturing facility technology to another level.

Okay. Thank you very much. I think we only have time for 1 more question. Okay. I see 1 hand.

This is James from Macquarie. So I have 2 follow-up questions on the previous ones. One is on your U.S. business. What would be the pain point or bottleneck for you to reach like 100% localization in the U.S. operation? Obviously, given the tariff impact, there will be larger lot more needs for us to localize in the U.S.? And what will be the issue when we basically have 100% location or higher localized in the U.S. what be the volume that previously came from Korea to U.S., what would this volume will be heading into? I mean, is there other geographical market that we are under consideration for those volumes that are being currently produced in Korea. And the second one is on GM collaboration. So wholesale in previous answers, talk about this will be just some early-stage idea that we currently have. And based on the media report previously, we were thinking about having more hybrid platform sharing or powertrain sharing with the company or you also talked about hybrid foundry business modeling like previous CIDs. So just wondering, would that be also a consideration area of our collaboration with the GM or potential further discussion.

Thank you very much for your questions. On the U.S. business pain point, well, I think -- if you look at the localization level regardless of tariffs, our strategy globally in the markets where we succeed has been to be localized. And then definitely, we needed to localize. So I was congratulated so many times in March, the data we had the grand opening of the meta plant in Savannah. I believe it was March 25. It was the liberation Day. The same day, President Trump announced the tariffs. So people told me, well, you're so a smart, right? So you so fast. Well, let me tell you that building a factory takes 2-plus years. So we saw it coming before. So this is to say our strategy, as I mentioned during this presentation, is not driven by political events and things like that, it has to consider all elements. But a company like ours that has been in the market for almost 40 years, in this market, you cannot just plan on 1 policy or the other. So localization was fundamental, and we needed to do so. And in fact, at that time, we knew we needed to expand even more, and we made that announcement of the additional 200 more. So concerning the Korean volume, your question is very important. And this is what I've been explaining to all our colleagues. So to me, this is not a transfer I'm not aiming to transfer production from Korea to the United States. That's why I keep saying we need to grow in the United States and we need to produce what we sell in the United States. So Korea shouldn't be concerned. And then we are having plans to grow in other regions, which are very important for Korea. So for example, I saw very happily that the Fed lowered the interest rates right? And the expectation, perhaps they will continue to lower. Well, experience tells you when the interest rates go down, the demand goes up. And then there is more opportunity in North America and then other markets want more production from Korea. So what we're going to do now is very simple. We will produce more in the U.S., for the U.S. and get the other markets to utilize Korean production. I want to make it clear. I also announced during the presentation that we are growing our production capacity in Ulsan by 200,000. So we are not reducing. And I'm very happy. I'm sure you've seen the news that we recently achieved a good agreement with the unions, which means they are confident of the policy of the company. So again, this is not a transfer, this is a growth strategy, 30% total and then 50% for Genesis. So this is the, I think, a very positive message that I want to convey. And concerning the GM collaboration, so we go step by step. Sometimes really good agreements and good cooperations get broken because of some rumors or leaks, et cetera. We have very transworthy relationship with our partners. And as mentioned, we have made formal announcements, which are very concrete, very clear on platform, on synergies, on volume and timing. And now I've also made the announcement that we are working on other opportunities but we have not finalized the moment we finalize this, we will announce. But we are considering a much broader cooperation because it's going quite well. And the impact is going to be seen in the balance sheet as the years come by. So very, very positive. And then it all comes from the top. So we have a strategy established by the head of our company, the Executive Chair, Mr. Chang, and [indiscernible] on GM. So very soon, we will announce more.

Okay. Thank you very much, Jose. Thank you to the presenters. We'd like to now conclude the Q&A session for this time. Again, our IR team is open, our hotline for IR team is open all the time. So any time you have other questions, please do not hesitate to contact us. So again, thank you very much for coming to our first overseas CEO Investor Day. We hope to see you some time next year. Thank you very much. Thank you.