By David Shepardson
WASHINGTON (Reuters) - General Motors (NYSE:GM) and Hyundai Motor (OTC:HYMTF) Co said on Thursday they have agreed to explore future collaboration across key strategic areas including potential joint vehicle development, supply chain issues and clean-energy technologies.
The U.S. and Korean automakers said they had signed a non-binding memorandum of understanding to consider ways to "leverage their complementary scale and strengths to reduce costs and bring a wider range of vehicles and technologies to customers faster."
Automakers face tens of billions of dollars in capital costs to build new electric vehicles and batteries, secure supply chains and develop advanced technologies like self-driving vehicles as they face stringent vehicle emissions regulations and heavy competition around the globe.
Potential collaboration projects "center on co-development and production of passenger and commercial vehicles, internal combustion engines and clean-energy, electric and hydrogen technologies," GM and Hyundai said.
Both companies have announced aggressive plans to ramp up electric vehicle production.
The two companies will also review potential combined sourcing in areas like battery raw materials and steel and plan to immediately begin assessing "opportunities and progression towards binding agreements."
The framework agreement was signed by Hyundai Motor Group Executive Chair Euisun Chung and GM Chair and CEO Mary Barra.
"Our goal is to unlock the scale and creativity of both companies to deliver even more competitive vehicles to customers faster and more efficiently," said Barra.
Hyundai Motor includes flagship Hyundai and its affiliate Kia, which together are the world's number three automaker by sales, while GM is the largest U.S. automaker.
The automakers will "evaluate opportunities to enhance competitiveness in key markets and vehicle segments, as well as drive cost efficiencies and provide stronger customer value through our combined expertise and innovative technologies," Chung said.
In October 2023, Honda (NYSE:HMC) Motor and GM scrapped a plan to jointly develop affordable electric vehicles, just a year after they agreed to work together in a $5 billion effort to try to beat Tesla (NASDAQ:TSLA) in sales.
The two car companies agreed in April 2022 to develop a series of lower-priced EVs based on a new joint platform, producing potentially millions of cars from 2027 onwards.