23/3/2026 |Articles are machine translated
Xavier Martinet, President and CEO of Hyundai Motor Europe. | Photo: Hyundai Motor Europe
In December 2025, the European Commission presented a set of measures known as the Automotive Package, introducing targeted adjustments to emissions targets and greater flexibility in the approach to transforming the automotive industry. The proposed softening of the fully zero-emission sales target from 2035, along with mechanisms such as averaging compliance with emissions limits, suggests that European regulation is entering a new phase in the search for balance between ambition and market reality. We discussed how these developments are viewed by a global manufacturer with a significant manufacturing and commercial footprint in Europe with Mr. Xavier Martinet, President & CEO at Hyundai Motor Europe.
How would you describe the current phase of European automotive legislation – is it, in your view, a period of fundamental reassessment, or rather a phase of fine-tuning an already established direction?
The EU Commission’s Automotive Package signals a clear recognition that the current CO2 targets for cars and vans are challenging to achieve. Much of the legislation builds on the established trajectory toward decarbonization, refining with measures like averaging compliance and acknowledging the role of HEV and PHEV. However, the extremely demanding 2030 targets remain unchanged, and do not yet fully address the gap between regulatory ambition and actual market uptake.
The transition is moving fast, putting pressure on affordability and on the industry’s ability to absorb massive investments.
At the same time, overregulation and increasing reporting obligations create additional strain, and discussions around local content requirements risk introducing protectionist elements that could fragment the market. Europe needs simplification, coherence, and openness to remain competitive.
The Automotive Package is currently still a proposal by the European Commission. From your perspective, what overall signal does this package send to car manufacturers and investors who are making long-term decisions in Europe today?
The Automotive Package sends a mixed signal. On the positive side, it recognizes the need for pragmatism and technology neutrality, which is reassuring for manufacturers like Hyundai that invest across battery electric, hybrid, plug-in hybrid, fuel-cell electric and conventional powertrains. It confirms that Europe remains committed to decarbonization, innovation, and supporting industrial competitiveness.
At the same time, key flexibilities, particularly around the 2030 target, remain very limited, and certain mechanisms, such as ‘made in EU’ super-credits or renewable fuel coefficients, are not yet fully defined. This lack of clarity complicates long-term planning for manufacturers and investors.
Ambition is important, but it must be accompanied by clear, stable and workable rules that reflect market realities and consumer demand.
To set the context, in how many locations does Hyundai currently manufacture vehicles in Europe, what is the approximate annual production volume, and how is production structured in terms of powertrains – internal combustion engines, hybrids, plug-in hybrids and battery electric vehicles?
Hyundai Motor Europe operates two manufacturing plants: Hyundai Motor Manufacturing Czech (HMMC), in Nosovice, Czechia; and Hyundai Motor Türkiye (HMTR), in Izmit, Türkiye. Both plants are EV ready, HMMC produces KONA EV since 2022, and HMTR has just finalized the preparation for the production of IONIQ 3.
HMMC has been in operation since 2008 and is a central pillar of our European production, as well as one of the most advanced facilities in Europe. Since opening, we have invested over €2 billion and integrated more than 500 Hyundai robots into the production process. The site also includes a battery shop in charge of BEV battery production and assembly since 2022. Following last year’s upgrade, it now supplies batteries not only for Hyundai vehicles but also for other brands within our Group. HMMC’s annual max. production capacity is 350,000 vehicles.
Our Izmit plant, Hyundai Motor Türkiye, began operations in 1997 as Hyundai Motor Company’s first manufacturing facility outside Korea. Originally built with a 50,000 unit capacity, it has expanded steadily over the years, reaching a total max. annual capacity of 245,000 vehicles. We have invested more than €250 million to prepare HMTR for EV production, which will start this year with the production of IONIQ 3.
From the perspective of a global car manufacturer, how might the proposed adjustment of the 2035 zero-emission sales target influence market stability and long-term planning in the European automotive sector?
Any adjustment to the 2035 zero-emission target has a direct impact on market stability and long-term planning. Hyundai Motor Europe remains fully committed to electrification as the most effective route to decarbonizing mobility, and we have already made substantial investments to support this transition. As an illustration, in 2026, when we launch IONIQ 3, we will offer a line-up of 7 fully electric vehicles covering all the segments of the European car market.
EV uptake across Europe is progressing unevenly and at a slower pace than originally forecast. This gap between regulatory ambition and actual market readiness creates uncertainty for manufacturers, suppliers, and customers. For this reason, we continue to advocate for regulatory frameworks that remain ambitious but also realistic, offering flexibility on interim targets and timelines for the 2030 and 2035 CO2 objectives.
By 2027, every Hyundai model sold in Europe will have an electrified version, whether hybrid, plug-in hybrid, or fully electric. This strategy allows us to continue accelerating decarbonization while ensuring that customers retain choice and that mobility remains accessible and affordable. Clear, predictable, and achievable regulations are essential to safeguarding long-term planning and investment decisions across the European automotive ecosystem.
Another signal of a more flexible approach to automotive legislation is the proposal to average compliance with emissions targets over the 2030–2032 period. How important is this mechanism in practice for managing Hyundai’s European product portfolio?
Compliance averaging is a critical mechanism for manufacturers with diverse powertrain portfolios. It provides essential flexibility to manage year‑to‑year variations in consumer demand and the uneven pace of electrification across markets, helping to avoid market distortions and unnecessary cost impacts.
We welcome the flexibility introduced for 2025 and 2030, including the three‑year averaging periods, as a positive first step.
However, averaging alone is not sufficient. Stronger demand-side measures, such as EU-wide incentives and accelerated infrastructure rollout, are essential. And given current market evolution, the 2030 targets themselves should be reassessed to align with consumer reality.
Do you interpret the current legislative adjustments as an indication that internal combustion engines – at least in hybrid form – could continue to play a meaningful role in Europe beyond 2035, or rather as a transitional phase within a longer-term decarbonization pathway?
Hyundai remains committed to electrification, but the pace of transition must match consumer readiness and infrastructure development. Technology neutrality allows multiple pathways to climate neutrality and helps ensure that mobility remains accessible and affordable during the transition.
In the past, car manufacturers without headquarters in Europe were not always fully included in strategic discussions on the future of the automotive industry. Does Hyundai today have sufficient opportunity in Brussels to contribute its perspective to the debate on future legislation?
Dialogue with European institutions has improved in recent years, and we value the constructive exchanges we have with policymakers and through industry associations such as ACEA and AutoSAP.
However, Hyundai has not been fully included in certain high-level formats, including the Strategic Dialogue. Given our extensive presence in Europe, including manufacturing facilities, European headquarters, R&D center, along with our long-term investments and contribution to skills and jobs, we hope our engagement continues to be recognized as an essential part of the European automotive ecosystem.
This is especially important as ongoing policy debates on “Made in EU” rules would risk cost raise, supply chain disruptions, and slower clean technology deployment. Inclusive dialogue with all manufacturers having a strong European presence is essential for a resilient and competitive green transition.
How does Hyundai assess the current situation on the European electric vehicle market overall? From your point of view, what are the main limiting factors today – demand, affordability, infrastructure, or a combination of these? And how do you expect EV demand in Europe to evolve in the coming years?
The European electric vehicle market is at an important transition point. The long-term direction toward electrification is clear, but current market dynamics show that this development is significantly slower than initially planned, and this development is uneven across countries, segments, and customer groups.
To illustrate, in 2022, some market forecasts were expecting a market EV mix slightly above 30% in 2025, but the reality was below 20%. And some markets in Southern and Eastern Europe are in single digits.
At Hyundai, we expect EV demand in Europe to keep growing, but at a steadier pace than initially anticipated. And we believe that offering a full range of electrified powertrains is the best way to address this situation. By 2027, every Hyundai model in Europe will have an electrified version: from hybrid and plug-in hybrid to fully electric.
Hyundai has long been among the successful brands in the European market across different powertrains. Where do you currently see the main risks to maintaining this position – in regulation, market demand, or production costs in Europe? It is worth noting that Hyundai in the Czech Republic faced several production stoppages in 2025, primarily due to weaker demand.
The main risks are a combination of regulatory pressure and uneven market demand. Ambitious 2030 and 2035 targets, even with flexibility mechanisms, risk misalignment with actual EV adoption. Production costs, especially for advanced materials, batteries, supply chain logistics, energy prices and geopolitical tensions also play a role, though Hyundai’s local production and efficiency measures help mitigate these impacts.
At the same time, our sales performance shows the strong progress of our electrified powertrain strategy. In 2025, our xEV sales grew by 24%, while fully electric vehicles grew even faster at +48%. Our balanced multi-powertrain strategy continues to place us in a strong competitive position despite market volatility.
If you could formulate one general recommendation to European institutions for the next phase of the automotive transformation, what would you consider essential for Europe to remain a competitive manufacturing region?
Europe needs policies that are ambitious but practical. Technology neutrality and flexibility must remain central. That includes investing in charging and hydrogen infrastructure, supporting consumer adoption, and ensuring fair compliance mechanisms. We also need incentives for industry, not just penalties, to help accelerate the transition.
Europe must avoid protectionist approaches. Introducing EU preference for decarbonization technologies could, if not carefully designed, create market distortions that disadvantage companies like Hyundai, a longstanding and trusted contributor to Europe’s industrial ecosystem.
We therefore encourage the Commission to include trade partners, such as like-minded countries like Korea, with which the EU has a Free-Trade Agreement, and Türkiye, with which the EU has a Customs Union. Local content obligations in public procurement or industrial policy could otherwise conflict with the spirit and provisions of existing FTAs, particularly those guaranteeing non‑discriminatory treatment of imported goods.
By combining clear rules with real support for the market, Europe can stay a competitive manufacturing hub, protect jobs, and attract continued investment in innovation.
