Hyundai Motor Company

Annual Financial Report

HYUNDAI MOTOR COMPANY

For the year ended December 31, 2022

Responsibility Statement for Hyundai Motor Company

To the best of my knowledge,

(a) the financial statements prepared in accordance with the applicable set of

accounting standards give a true and fair view of the assets, liabilities, financial

position and profit or loss of Hyundai Motor Company and the undertakings

included in the consolidation taken as a whole and

(b) the management report includes a fair review of the development and

performance of the business and the position of Hyundai Motor Company and the

undertakings included in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties that Hyundai Motor Company

faces.

Jaehoon Chang

CEO & President

March 9

, 2023

Management Report

1. Business Overview

Hyundai Motor Company (“HMC” or “the Company”) as a consolidated entity consists of

automotive division, finance division and others division. As of 2022, revenue of automotive

division accounted for 80%, finance division for 14% and others division for about 6%. Status

of major companies in each division is as below.

Division

Company

Major Products

Automotive

Hyundai Motor Company, HMA, HME,

HMCA, HMMA, HMMC, etc.

Vehicles, etc.

Finance

Hyundai Card, Hyundai Capital, HCA

Installment finance,

Lease, Credit Card

Others

Hyundai Rotem, etc.

Railway vehicles, etc.

[Automotive Division]

Based on sales of 3.94 million units (based on wholesale) in 2022, the Company posted 142.5

trillion KRW in consolidated sales revenue and 113.7 trillion KRW for automotive division.

As a mid- to long-term strategy for sustainable growth, the Company is pushing for the

transition to a ‘Smart Mobility Solution Provider’ that provides quality-based SMART values.

The Company has established three business structures and strategic directions. The first one

is ‘Smart Mobility Device’, which promotes balanced growth between profitability and sales

by enhancing the competitiveness of automotive business and preemptive transition to

electrification. The second is ‘Smart Mobility Service’, which supports vehicle sales and

secures business capabilities. Finally, with advanced hydrogen technologies of fuel cell

system, the Company continues to establish the hydrogen ecosystem and secure hydrogen

initiatives to preoccupy fuel cell-based hydrogen market.

[Finance Division]

Hyundai Capital and Hyundai Card are representative financial companies among our

subsidiaries in finance division.

Specialized Credit Finance Business

Hyundai Capital is a financial company that handles only specialized credit finance business

and is registered with the Financial Services Commission under the Specialized Credit Finance

Business Act. The main business includes installment financing, lease financing and various

types of retail and corporate financing excluding credit card service. As most of the fund

raising is done through borrowing from financial institutions and issuing corporate bonds

without receiving credit, company’s ability to raise funds is important.

(1) Installment financing business

Installment financing is a financial system in which when a consumer wants to purchase

vehicles, home appliances and durable consumer goods, financial company lends the

purchase funds to the consumer under a contract with the seller, and the consumer repays

the principal and interest in installments to the financial company. In Korea, it is mainly used

to purchase vehicles and the business highly depends on the automotive market.

(2) Lease financing business

Lease refers to a physical financing activity in which a company specializing in facility rental

services purchases certain facilities, lends them to consumers for a certain period of time and

receives the usage fee(lease payment). Lease business has the characteristics of corporate

financing, however as automotive market is growing, the dependence on automotive market

continues to increase.

(3) Others

Hyundai Capital operates both of consumer finance and corporate finance business other

than installment financing and lease financing business. It has credit loans for consumers

using auto finance and mortgage loans as well as corporate finance such as PF (project

Financing) for real estates.

Credit Card Business

Hyundai Card issues credit cards to members who meet certain requirements and creates

added value by charging fees in return of giving credit to merchants and members after

entering into a franchise agreement with a store of goods or services. In addition, Hyundai

Card generates revenue by providing its members with credit loan services and other

additional services such as cash advances and card loans.

[Others Division]

Hyundai Rotem, established in 1999, operates rail solution business that supplies various

types of railway vehicles and core electrical equipment of railway vehicles, defense solution

business and eco-plant business for automobile production infrastructure and technologies

for smart factory.

- 2023 Annual Guidance

HMC has announced annual guidance since 2021 in order to provide thorough understanding

and reinforce credence to its esteemed shareholders and investors. In addition, the Company

provides guidance updates reflecting rapidly changing business environment.

Annual guidance for 2023 was announced during business results announcement conference

call in January 2023, including sales volume and profitability target as well as plan for

Investment, FCF (excluding finance division) and shareholder return.

As the overall supply chain situation is improving, both of industry demand and the Company’s

sales volume are expected to increase on a year-on-year basis. The Company’s sales volume

target for 2023 is 4.32 million units, which is a 9.6% increase compared to sales volume of

3.94 million units for 2022.

For 2023 consolidated revenue, the Company is expecting a growth of 10.5% to 11.5%

compared to 2022 and is aiming for a level of 6.5% to 7.5% of operating profit margin on a

consolidated basis on the back of volume increase and production normalization as well as

product mix improvement.

Investment plan for automotive division is 10.5 trillion KRW including 4.2 trillion KRW for R&D

and 5.6 trillion KRW for CAPEX, and FCF excluding finance division is expected to be between

3.0 and 4.5 trillion KRW.

Lastly, for shareholder return, the Company is determined to execute flexible shareholder

policy to carry dividends higher or same level of the previous year to improve shareholder

value. In addition, the Company is planning to announce updated mid- to long-term

shareholder return policy within this year.

Board of Directors

As of the end of 2022, the Company’s Board of Directors consists of 5 internal directors (Euisun

Chung, Jaehoon Chang, Chung Kook Park, Dong Seock Lee, Gang Hyun Seo) and 6 outside

directors (Eun Soo Choi, Chi-Won Yoon, Eugene M. Ohr, Sang-Seung Yi, Dal Hoon Shim, Ji Yun

Lee). Euisun Chung, an internal director and the CEO, is the chair of the Board and he was

appointed as the chair of the Board of Directors in order to efficiently and rapidly respond to

the dynamics of business environment and automotive industry and to practice responsible

management as the executive chair of the Company.

The Board of Directors, as the Company’s the highest decision-making body, represents the

interests of shareholders and stakeholders, resolves important matters such as policy of the

Company’s operations under laws and articles of incorporation and supervises the execution

of duties of directors and management.

In addition, the Board of Directors promotes expertise in decision-making and effectively

performs its functions by subdividing tasks and delegating certain tasks to Committees under

the Board of Directors to strengthen its executive and supervisory functions. The Committees

include Audit Committee, Recommendation Committee on Candidates for Outside Directors,

Sustainability Management Committee and Compensation Committee.

Meanwhile, the Company enacted Corporate Governance Charter in 2016, laying the

foundation for enhancing transparency of responsible management under professional and

independent supervision of the Board of Directors as a global company. Through revision of

the Corporate Governance Charter in October 2019 and March 2021, the Company reflected

strategic direction and a need to improve ESG in the entire text of the Charter. Revisions of

relevant laws, regulations of Committees and improvements related to governance were

reflected in the Charter as well.

The Company conducts its own evaluation of outside directors and has improved efficiency of

the Board of Directors through evaluation of the Board by outside directors and discussion of

the results of evaluation at the Board.

(a) Gender identity for Board of Directors

(As of December 31, 2022)

Number of

board

members

Percentage of

the board

Number of

senior

positions* on

the board

Number in

executive

management

Percentage of

executive

management

Men

90.9%

100%

Women

9.1%

(b) Ethnic background for Board of Directors

(As of December 31, 2022)

Number of

board

members

Percentage of

the board

Number of

senior

positions* on

the board

Number in

executive

management

Percentage

of executive

management

White British or

other White

(Including

minority-white

groups)

Mixed/Multiple

Ethnic Groups

Asian/Asian

British

100%

Black/African/

Caribbean/

Black British

Other ethnic

group including

Arab

* CEO, CFO, SID and Chair

- Financial Risk Management

The Company is exposed to financial risks such as market risk (foreign exchange risk, interest

rate risk and price risk), credit risk and liquidity risk in relation to financial instruments. The

purpose of risk management is to reduce, eliminate and avoid financial risks to acceptable

level by identifying potential risks that may affect financial performance.

Market Risk Management

The Company is exposed to financial risks from fluctuations in exchange rate and interest

rates. Therefore, derivatives are used for hedging the risks.

Foreign Exchange Risk Management

Since the Company makes transactions marked with foreign currency, it is exposed to the risk

of exchange rate fluctuations in various currencies and major currencies are USD, EUR, JPY

and so on.

In order to manage foreign exchange risk, the Company eliminates the risk by matching inflow

and outflow of foreign currency by currency and maturity and adjusting payment date for

foreign currency funds according to exchange rate outlook.

In addition, foreign exchange derivatives such as currency forward, currency option, currency

swap and so on are used for hedging, but transactions for trading purpose are excluded in

principle.

2. Major references for business industry

(1) Characteristics of Industry

Automotive industry assumes a broad industrial base, so it has a very large upstream and

downstream industry linkage effect compared to other industries. Automotive industry can

be largely divided into manufacturing, distribution, and operation. Manufacturing has

connections with other industries including steel, chemicals, electricity, electronics, rubber,

glass, plastics industry and components makers that produce about 20,000 parts. Distribution

involves direct sales of OEMs, dealerships, financing, consignment companies, and operation

involves maintenance, components, refueling, and insurance industry.

(2) Growth for Industry

The growth of automotive industry was driven by governments' industrial policies and

industry's constant research and development efforts, as the domestic and overseas markets

continued to expand. Korea’s automotive industry has produced a total of 116.10 million

vehicles since 1976, when it began exporting its first unique model, the Pony, to the domestic

market by 2022, of which 42.2%, 48.88 million units, were sold in Korea. The remaining 57.8%,

67.05 million units, were sold to overseas markets.

(3) Economic fluctuation

Demand for automotive is closely related to economic fluctuation. The relationship is more

evident when the demand for automotive reaches a certain level or higher and the growth of

demand for automotive slows down. When the supply of automotive began in earnest, the

demand for automotive increased rapidly regardless of economic fluctuation. However, since

then, it has been sensitively affected by economic fluctuation, such as changes in economic

growth. During the economic downturn, consumption slows down due to weak investment

and reduced employment, which greatly affects spending. During this period, the demand for

automotive, a typical durable product, shows a greater decline compared to other consumer

goods.

(4) Competitiveness

Because automotive industry is a large-scale manufacturing industry with huge capital, each

country has established an oligopoly system with a small number of companies. It is unlikely

to succeed in this business even for a company with enormous resources, because building a

certain amount of mass-production facilities requires a huge amount of money and takes at

least four to five years to launch the product after the decision is made. In addition, OEMs

have tens of thousands of employees and thousands of suppliers. Even if there is a prolonged

poor performance, it is necessary to be careful in restructuring or shortening operations in

consideration of the impact on the national economy.

Key competitive factors in automotive industry include product competitiveness, marketing

skills, and cost competitiveness. These three factors are critical to strengthening dominant

position, reducing costs, and securing profitability. The most important factor, product

competitiveness, is maximizing satisfaction for vehicle performance, safety, design, quality,

and new technologies and let OEMs have competitiveness compared to peers. Marketing

skills increase competitiveness by actively attracting customers through creation of product

concept which customers need, new product launch, advertising, sales, and A/S network

construction. Cost competitiveness is a total cost concept that includes new product

development cost, productivity of mass production, indirect workforce productivity, and

financial cost, which has huge impact on price competitiveness and profitability.

3. Market and Business Conditions by Region

(1) Korea

In 2020, despite negative impact of COVID-19, industry demand increased thanks to

consumption tax cut and new model cycle from major OEMs. In 2021, industry demand

declined due to semiconductor chip shortage caused by COVID-19 and continued unstable

supply of components led to a decline in industry demand in 2022.

In 2022, the Company sold 689 thousand units, a 5.2% decrease from the previous year due

to production disruptions caused by unstable supply of components. However, the Company

is pushing to improve sales profitability by expanding sales portion of high value-added

models such as Genesis and SUV and expanding sales for the all-new Grandeur, which was

launched at the end of the year. In order to respond to customers’ needs, the Company has

introduced and advanced D2C (Direct to Consumer) online sales channel in Korea. The

Company will continue to strengthen its Genesis brand line ups to lead the domestic luxury

vehicle market and focus on expanding its market share by successfully launching new

models scheduled in 2023. In addition, for sustainable management, the Company is striving

to create environmental and social values by developing eco-friendly vehicles, creating low-

carbon society and pursuing win-win growth with suppliers.

(2) U.S.

In 2020, overall sales decreased due to production disruptions and sluggish demand caused

by COVID-19. However, demand for high-end vehicles such as SUVs and pick-up trucks was

strong. In 2021, industry demand increased by 3.4% to 15 million units but in 2022, it fell to

the lowest level in 11 years since 2011 due to unstable supply of components.

[Correction on description of Korean market in 2021 Annual Financial Report]

1. Typo correction: COVD-19

→

COVID-19

2. Error of unit: In 2021, the Company sold 727 thousand units.

In 2022, the Company sold 781 thousand units (based on retail sales), a 0.9% decrease from

the previous year and recorded 5.6% of market share. Thanks to strong sales of SUVs such as

Tucson, Santa Fe and Genesis including GV70, market share increased by 0.4%pt compared

to 2021.

(3) Asian Market

China, Asia’s leading market, has become the biggest automobile market since 2009, and as

demand increases along with income growth, major companies are actively expanding their

sales by increasing production capabilities and sales networks in the Midwest inland.

In 2022, industry demand increased by 5.9% to 21.06 million units. Sales from March to May

decreased due to production suspension in major areas to prevent the spread of COVID-19,

however, annual demand increased due to government’s policies to promote automotive

sales with purchase tax cut and increased promotion of companies.

Meanwhile, Indian market has grown rapidly as the government led the development of the

automotive industry, and the proportion of medium-sized vehicles and above is gradually

increasing due to improvement of income levels.

In 2022, 3.82 million units were sold in India, a 22.9% increase from 2021 due to pent-up

demand amid continued semiconductor chip shortage. Industry demand for 2022 surpassed

3.37 million units of 2018 and recorded the highest annual sales.

In China, the Company sold around 250 thousand units (based on wholesale of BHMC), a 28.5%

decrease from 2021 with 1.2% of market share. Despite sales increase of Custo and Tucson,

sales of major models such as Elantra, ix35 declined.

In India, sales of the Company increased by 9.4% to 553 thousand units with 14.5% of market

share thanks to sales increase of major SUV models including Venue and Creta as well as the

overall models.

[Correction on description of Asian market in 2021 Annual Financial Report]

1. Error of unit: In 2021, the Company sold around 350 thousand units based on wholesale

in China and it is based on sales of BHMC.

(4) European Market

In 2022, industry demand shrank by 4.1% and recorded 11 million units. Even though industry

demand declined due to insufficient supply of semiconductor chips, sales of BEV increased

by 28.0% and accounted for 12.1% of overall industry demand.

In 2022, the Company sold 538 thousand units, a 4.0% increase compared to 2021. Thanks to

strong sales of IONIQ 5 and Tucson PHEV, sales volume for BEV and PHEV increased

significantly.

In order to secure profitability, the Company avoids excessive incentive spending and strives

for qualitative growth by strengthening internal stability. To this end, the Company is

strengthening its position based on competitiveness in technology and design in European

market. As a result, GV60 awarded German Car Of The Year in the premium segment (<€60k)

and IONIQ 5 awarded 2022 German Car Of The Year in New Energy category and UK Car Of

The Year.

* Please note that the data above is based on sales in Western and Eastern Europe.

[Correction on description of European market in 2021 Annual Financial Report]

1. Error of unit: In 2021, the Company sold 505 thousand units.

4. Management Discussion and Analysis

(1) Note on Forward-Looking Statements

This report includes forward-looking statements that relate to future events and reflect the

Company’s current opinion and judgement based on occurred events and financial

performance as of the date on which the report is made.

These forward-looking statements are based on various assumptions related to the future

business environment and these assumptions may eventually turn out to be inaccurate.

In addition, these assumptions may contain estimates, uncertainties, risks and other factors

and actual results may differ materially due to numerous important factors. Such factors that

may lead to material difference include, but are not limited to, factors related to internal

management of the Company and external environment.

The Company does not intend or assume any obligation to update any forward-looking

statement, which speaks only as of the date on which it is made.

(2) Overview

Despite the difficult business environments, such as prolonged COVID-19 situation,

geopolitical issue and continued shortage of major components including semiconductor

chips, the Company achieved strong business results in 2022. The Company minimized

production disruptions by putting more effort to secure components through diversification

of suppliers and enhancing flexibility of production and sales. As a result, the Company

achieved meaningful results of 142.5 trillion KRW in sales revenue and 9.8 trillion KRW in

operating profit by improving product mix and minimizing incentive spending and inventories.

In addition, the Company expanded market share in major markets such as Europe and the

U.S. In Europe, sales increased thanks to an increase of market share in electric vehicles, and

in the U.S. the Company established a stable foundation with strong sales of Genesis.

In particular, IONIQ 5 and IONIQ 6, which are based on E-GMP, HMC’s first EV-dedicated

platform, have been well received by customers and the media. IONIQ 5 has been proven to

be the best electric vehicle by winning many awards at major global awards such as ‘2022

World Car of the Year’, ‘2022 UK Car of the Year’ and ‘Japan Import Car of the Year’ and IONIQ

6 also has proved its competitiveness by receiving the highest rating of 5 stars in Euro NCAP.

(3) Financial Position and Performance (Consolidated)

- Financial Position

(Unit : million KRW)

Classification

2022

2021

Difference

[Current assets]

96,389,273

88,565,366

7,823,907

Cash and cash equivalents

20,864,879

12,795,554

8,069,325

Short-term financial instruments

5,774,597

6,949,333

(1,174,736)

Other financial assets

5,934,745

12,396,646

(6,461,901)

Trade notes and

accounts receivable

4,279,057

3,147,296

1,131,761

Inventories

14,291,216

11,645,641

2,645,575

Financial services receivables

38,037,368

35,252,606

2,784,762

Others

7,207,411

6,378,290

829,121

[Non-current assets]

159,353,189

145,381,049

13,972,140

Other financial assets

3,889,776

3,539,286

350,490

Property, plant and equipment

36,153,190

35,543,083

610,107

Investment property

144,450

156,656

(12,206)

Intangible assets

6,102,377

5,846,986

255,391

Investments in joint ventures and

associates

25,199,437

22,429,117

2,770,320

Financial services receivables

52,326,478

45,776,526

6,549,952

Investments in operating leases

27,681,534

26,327,996

1,353,538

Others

7,855,947

5,761,399

2,094,548

Total assets

255,742,462

233,946,415

21,796,047

[Current liabilities]

74,236,472

64,236,787

9,999,685

[Non-current liabilities]

90,609,445

87,093,839

3,515,606

Total liabilities

164,845,917

151,330,626

13,515,291

[Capital stock]

1,488,993

[Capital surplus]

4,241,303

4,070,260

171,043

[Other capital items]

(1,713,928)

(1,968,385)

254,457

[Accumulated other

comprehensive income(loss)]

(1,620,682)

(1,772,601)

151,919

[Retained earnings]

79,953,601

73,167,855

6,785,746

[Non-controlling interests]

8,547,258

7,629,667

917,591

Total equity

90,896,545

82,615,789

8,280,756

As of December 31, 2022, total consolidated assets increased compared to the end of 2021.

Financial services receivables and investments in operating leases increased due to business

expansion of finance division, investments in associates increased due to the investment in

HMG Global and inventories increased due to an increase in production compared to the

previous year.

Total consolidated liabilities increased on a year-on-year basis due to increased borrowings

as financial division expanded its operations, increased provisions related to additional

warranty provision costs and increased accounts payable led by production expansion

compared to 2021.

- Performance

(Unit : million KRW)

Classification

2022

2021

Difference

Sales

142,527,535

117,610,626

24,916,909

Cost of sales

114,209,483

95,680,131

18,529,352

Gross profit

28,318,052

21,930,495

6,387,557

Operating profit

9,819,769

6,678,949

3,140,820

Profit before income tax

10,947,943

7,959,562

2,988,381

Profit for the year

7,983,614

5,693,077

2,290,537

Profit attributable to owners

of the Company

7,364,364

4,942,356

2,422,008

Profit attributable to non-

controlling interests

619,250

750,721

(131,471)

The Company’s consolidated revenue increased by 21.2% compared to the previous year to

142.5 trillion KRW and operating profit increased by 47% to 9.8 trillion KRW with OP margin

of 6.9%, which is a 1.2%pt increase compared to 2021.

(Revenue by division below is revenue generated from external customers and operating

profit of automotive division includes internal transaction adjustment.)

[Automotive Division]

Sales revenue for automotive division increased by around 21% to 113.7 trillion KRW and

operating income increased by 77.9% YoY to around 7.4 trillion KRW thanks to strong sales of

high profitable models such as G90, GV80 and SUVs with lower incentive spending.

[Finance Division]

Sales revenue for finance division increased by 19.4% to 20.0 trillion KRW and operating profit

decreased by 16% YoY to 1.8 trillion KRW due to an increase in financing cost and provisions

from rapidly rising interest rate.

[Others Division]

Sales revenue for others division increased by 31.2% YoY to around 8.8 trillion KRW and

operating profit increased by 77.5% to around 0.6 trillion KRW thanks to increased sales of

trailers and trams.

Consolidated profit before income tax increased by 37.5% to 10.9 trillion KRW thanks to

increased gains of investments in joint ventures and associates and consolidated net income

increased by 40.2% to around 7.98 trillion KRW.

(4) Liquidity, Financing, and Expenditure

(Unit : million KRW)

Classification

2022

2021

Difference

Liquid funds :

Cash and cash equivalents

20,864,879

12,795,554

8,069,325

Short-term financial instruments

5,774,597

6,949,333

(1,174,736)

Financial assets at fair value through

profit or loss

5,366,752

12,249,980

(6,883,228)

Total

32,006,228

31,994,867

11,361

Borrowings :

Short-term borrowings

11,366,480

13,087,836

(1,721,356)

Current portion of long-term liabilities

25,574,131

20,578,902

4,995,229

Debentures

62,960,060

63,458,809

(498,749)

Long-term borrowings

12,285,149

10,667,731

1,617,418

Total

112,185,820

107,793,278

4,392,542

As of December 31, 2022, the Company had 32 trillion KRW of liquid funds on a consolidated

basis and the liquid funds include cash and cash equivalents, short-term financial instruments

and financial assets at fair value through profit or loss(current). The Company’s borrowings

were 112 trillion KRW, an increase of 4.4 trillion compared to the end of the previous year.

The Company’s major expenditures for 2022 were dividends payment of 1.36 trillion KRW and

repayment for long-term liabilities and debentures of 27.1 trillion KRW.

The Company’s liquid funds are to prepare for uncertainties caused by industrial

characteristics with high sensitivity on economic conditions and to invest in future growth.

The Company prioritizes stable liquidity and risk management related to liquidity and strives

to achieve balance between liquidity and profitability.

(5) Off-balance sheet activities

Please refer to notes to consolidated financial statements.

(6) Significant accounting policies and estimation

Please refer to notes to consolidated financial statements.

(7) Legal and Environmental Regulations

There are various laws and regulations related to the automotive industry, such as

manufacturing type approval, safety regulations, environmental regulations and automotive-

related taxes. Recently, related laws and regulations have been revised to strengthen

customer’s rights and responsibilities of companies. The laws and regulations vary depending

on policies of each government, but laws on the environment and safety are being tightened

mainly in developed countries.

The Company has set goals for climate change response and carbon neutrality and

strengthened environmental management in order to enhance comprehensive capabilities to

respond to global environmental issues and regulations. The Company aims to be carbon

neutral by 2045 in all stages from procurement of components to production and operation

of vehicles sold in order to curb global temperature rises to within 1.5

℃

and to consider

‘progress for humanity’ and the global environment.

In order to reduce carbon emission and achieve zero-emission, the Company is shifting its

products and business structure towards electrification. With the target of full electrification

with BEV and FCEV in Europe by 2035, it aims to fully electrify vehicles sold in major markets

by 2040. In emerging markets, the Company plans to accelerate electrification given the

current status of infrastructure, customers’ needs and market conditions.

In addition, the Company plans to expand the application of green hydrogen to major

manufacturing processes to promote carbon neutrality in the workplace based on RE100

roadmap that aims to cover 100% of renewable energy in global manufacturing facilities by

2045, which is ahead of global RE100 initiative recommendation of 2050. To this end, the

Company has plan to convert 100% of renewable energy in global facilities sequentially by

2045, given the renewable energy supply and demand by country and government

policy/regulation.

(8) Derivatives and Risk Management Policy

As the Company operates its business in Korea and overseas, major currencies are USD, Euro,

KRW and others and it is exposed to foreign exchange risk.

In order to manage the foreign exchange risk, the Company eliminates the risk by matching

inflow and outflow of foreign currency by currency and maturity and adjusting payment date

for foreign currency funds according to exchange rate outlook. Foreign exchange derivatives

such as currency forward and currency option are used as well, and regarding derivatives, it

is a principle not to bear any risk unrelated to business. In addition, the Company determines

transaction currency, amount, type and maturity considering the foreign exchange fluctuation,

correlation between currencies and expected foreign currency inflow and outflow and

excludes transactions for trading purpose in principle.

The Company’s long-term currency risk management strategy focuses on diversifying

currencies by activating overseas business including emerging markets to eventually achieve

neutral status from currency risk.

Regarding raw material price fluctuation, the Company manages the risk with the aim of

maintaining stable business activities by reducing the volatility of material cost. Main

materials which are subject to the risk management are precious metals used in catalyst for

automotive and raw materials for battery.

In order to mitigate volatility risk, the Company uses derivatives such as commodity swap,

and before making transactions for financial derivatives, the Company discusses volume,

price and transaction method with financial institutions. The Company excludes transactions

for speculative purposes in relation to derivatives and does not bear any risk unrelated to

business activities.

(9) Key implementation strategies

In 2023, the global economy is expected to be challenging with reorganization of global

supply chain and continued unstable supply and demand for raw materials, while there are

concerns regarding slower demand for automotive due to a rapid increase in interest rate and

economic recession.

In addition, competition in the global automotive market will be intensified as Chinese

companies are getting into the global markets and introducing their new models. Under the

business environment, the Company will continue to enhance fundamental competitiveness

and establish a foundation for sustainable growth. To this end, the Company will focus on the

following strategies this year.

①

Responding to transition to buyer’s market

The Company will do its best to provide vehicles that customers want at the desired time by

optimizing production/sales and reducing lead time in logistics. The Company will also

strengthen financial programs in order to alleviate the burden of purchasing new vehicles,

provide reliable used vehicles through CPO (Certified Pre-Owned) business and reduce actual

burden for purchasing the vehicles by enhancing residual value.

②

Securing competitiveness to achieve the top-tier electrification brand

HMC will transform overall system focusing on software to secure its competitiveness to lead

the mobility paradigm. In addition, it will maximize the convenience of its customers

throughout the use of electric vehicle, including enhanced charging convenience and energy-

integrated service packages, and further enhance competitiveness of electrification brand by

launching the Company’s first high-performance electric vehicle, IONIQ 5 N. The Company

will strengthen its global leadership in electric vehicles by expanding its dominance in

emerging markets where growth of electrification begins.

③

Preparing for future business and strengthening internal capabilities

In addition to expanding hydrogen ecosystem initiatives and advancing manufacturing

innovation with HMGICS, HMC will steadily prepare for future business by establishing global

cooperation system and investing in technologies in various areas such as robotics and AAM

(Advanced Air Mobility).

Meanwhile, the Company will systematically manage human resources and improve the

system for an active organization culture to strengthen internal organization capabilities

which are basis for achievements of its business goals.

5. Information on Shares

(1) Total Number of Shares

As of the base date, the Company issued common share and three types of preferred shares

and the total number of shares issued on a cumulative basis is 231,596,479 common shares

and 66,202,146 non-voting preferred shares. The total number of shares decreased by the

base date due to capital reduction and cancellation of shares is 17,928,292 common shares

and 2,931,275 preferred shares and the total number of treasury shares is 11,408,711

common shares and 4,221,844 preferred shares. As of the base date, the number of shares

outstanding is 202,259,476 common shares and 59,049,027 preferred shares.

(Base Date : December 31, 2022)

Classification

Type of shares

Note

Common

Preferred

Total

Ⅰ

. Authorized shares

450,000,000

150,000,000

600,000,000

Ⅱ

. Issued shares (cumulative)

231,596,479

66,202,146

297,798,625

Ⅲ

Decrease in number of shares

(cumulative)

17,928,292

2,931,275

20,859,567

1. Capital reduction

2. Cancellation

17,928,292

2,931,275

20,859,567

Treasury Shares

3. Redemption

4. Other

Ⅳ

. Issued shares (

Ⅱ

Ⅲ

)

213,668,187

63,270,871

276,939,058

Ⅴ

. Treasury shares

11,408,711

4,221,844

15,630,555

Ⅵ

. Outstanding shares (

Ⅳ

Ⅴ

)

202,259,476

59,049,027

261,308,503

(2) Treasury Shares

(Base Date : December 31, 2022)

Acquisition Method

Type of

Period-

start

Change

Period-end

Acquisition

(+)

Disposal

(-)

Cancell-

ation (-)

Intra-market

direct acquisition

(within dividend

related capital gains limit)

Common 14,048,242

854,672

3,494,203

11,408,711

Preferred

3,968,761

253,083

4,221,844

Acquisition from

trust agreement

(within dividend

related capital gains limit)

Common

Preferred

Total

Common

14,048,242

854,672

3,494,203

11,408,711

Preferred

3,968,761

253,083

4,221,844

(3) Dividends

The Company continues to expand dividends in order to enhance shareholder value and

determines the size of dividends in consideration of investment for future growth, business

performance and cashflow.

Classification

2022

2021

2020

Par value per share (KRW)

5,000

Consolidated net profit (KRW million)

7,364,364

4,942,356

1,424,436

Separate net profit (KRW million)

3,701,958

645,526

526,975

EPS (KRW, Consolidated basis)

28,521

18,979

5,454

Total cash dividend (KRW million)

1,830,356

1,300,658

785,516

Total stock dividend (KRW million)

Dividend payout ratio (%)

24.9

26.3

55.1

Cash dividend yield (%)

Common

4.5

2.4

1.6

Preferred

8.8

4.9

3.4

Stock dividend yield (%)

Common

Preferred

Cash dividend per share

(KRW)

Common

7,000

5,000

3,000

Preferred

7,100

5,100

3,100

Stock dividend per share

(share)

Common

Preferred

* Preferred share above is based on 2 Preferred share.

* Please note that dividends for 2022 above are one of agenda for the Annual General Meeting of Shareholders

which is scheduled to be held on March 23, 2023 and may change according to the result of the Annual General

Meeting of Shareholders.

6. ESG-related matters

- Sustainability Report

The Company publishes Sustainability Report every year and the report can be found on the

Company’s website. The report is drawn up according to ‘in accordance’ core of GRI (Global

Reporting Initiative) Standards and satisfies 4 principles of AA1000APS (Accountability

Principles Standard), Inclusivity, Materiality, Responsiveness and Impact.

In addition, disclosure guidelines of TCFD (Task Force on Climate-related Financial Disclosure),

SASB (Sustainability Accounting Standards Board) and WEF IBC Stakeholder Capitalism

Metrics are reflected in the Sustainability Report.

2022 Sustainability Report is attached in this report and 2023 Sustainability Report will be

published in third quarter of this year.

(1) ESG Management

In March 2022, Hyundai Motor Group revealed “The Right Move for the Right Future”, which

embodies the Group’s ESG management commitment and mid- to long-term direction.

The Group also made known its commitment – a sustainable future is an obligation we should

pursue for the next generation and a basic right that everyone on Earth should be able to enjoy,

and we will lead the right move through the right action for a desirable future that everyone

dreams of.

In addition, the Group disclosed three major mid- to long-term directions – Move for Our

Planet, Move for Our People, Move for Our Community – and 15 key management areas to put

this commitment into action.

In line with the Group’s directions, the Company will continue the right movement to create a

sustainable future for the Earth’s environment and all stakeholders.

- ESG Governance

The Company is strengthening management activities to preemptively identify and remove

risk factors related to ESG and explores new business opportunities and strives to secure a

new competitive edge by strategically using various ESG factors.

[Corrections on 2022 Sustainability attached]

1. page 17, 2030 EV Sales Target, EV sales in 2021 in the U.S. was 10K.

2. page 64, Nationality of Eugene M. Ohr, independent director, is the U.S.

In particular, based on ESG governance that we newly established in 2020, discussions on

major pending issues take place on a semi-annual basis at the Sustainability Management

Committee under the Board of Directors, which is the highest decision-making body, and the

ESG Committee. In addition, we encourage each organization to autonomously carry out ESG

improvement activities, such as by establishing a performance goal for each working-level

division and reflecting the performance in KPIs, thereby striving to internalize corporate-wide

ESG management.

Amid growing importance of responding to climate change and preventing accidents both in

Korea and abroad, we created the Carbon Neutrality Execution Team and Serious Accident

Prevention Team, and established a more professional and systematic management

/response system.

①

Board of Directors

· Strengthen the ESG management system, such as establishing major ESG policies and

discussing improvement plans

· Examines/supervises plans and execution in relation to major issues, including safety, health

and ethics

· Reports and deliberates/decides on major pending issues related to ESG on a semi-annual

basis

②

ESG Committee

· A small meeting group within Hyundai Business Strategy Meeting. Top management in each

area review/discuss ESG-related matters

③

Secretary (ESG-dedicated division)

– Planning & Finance Division (Sustainability Management Team)

· Establish/advance the system : Establish a reporting system, set up ESG management

indexes and build a data platform, etc.

· Internalize ESG management : Provide support for employee ESG training and KPI reflection,

etc.

· Induce/implement improvement activities : Handle collaboration/mediation to identify

matters that require improvement and implement improvement activities, etc.

· Disclose information/communicate : Sustainability Report publication, ESG evaluation

responses, stakeholders communication, etc.

④

ESG Council (Working-level divisions)

· Discuss the improvement direction of each division, implement improvement activities and

share improvement performance

(2) Environmental

-Environmental Management

Environmental Management System

The Company has established environmental management policies and principles, in order to

minimize the negative environmental impacts of its corporate activities, and constantly

updates them to meet the rapidly changing business environment and the diverse

environmental management needs of stakeholders.

In addition, we have set a governance system required to implement environmental

management and are striving to identify and manage major environmental issues through

close and regular communication with stakeholders. Major activities and decision-making

issues related to improving our environmental performance are regularly discussed at the ESG

Committee, in which the top management participates, and at the Sustainability Management

Committee, a BOD subcommittee.

[Basic Principles of the Environmental Management Policy]

Classification

Basic Principles

1. Raw materials

Efficient use of raw materials

Reuse of production waste in the production cycle

Traceability of raw material production sites

2. Energy

Promotion of energy reduction

Introduction of renewable energy

Operation of energy management systems

3. Water

Water Recycling

Water storage

Traceability of water resources

4. Greenhouse Gas

Reduction of GHG emissions at business sites

Reduction of value chain GHG emissions

Reduction of GHG emissions due to products and services

5. Waste

Waste treatment tracking and management

Waste recycling

Waste upcycling

6. End-of-life products

Disclosure of end-of-life product recovery information

Recovery of end-of-life products

Recycling of end-of-life products

7. Environmental pollutants

Reduction of air pollutants

Reduction of water pollutants

Reduction of harmful substances

Implementation of Environmental Management System

The Company assesses the impacts of its value chain on the environment and associated risks

through its environmental management system, and manages environmental management

performance on a systematic basis, thereby minimizing negative environmental impacts of its

value chain including products and business sites.

Regarding products, the Company’s R&D Center has taken the lead in promoting the

reduction of carbon and harmful tailpipe emissions by new cars, the development of material

recycling technologies, the minimization of the content of harmful substances in products,

and the development of electrified vehicles.

In particular, to reduce carbon and harmful tailpipe emissions from new models, the Company

is applying the “eco-design”, whereby it manages fuel efficiency improvement and harmful

tailpipe reduction as major goals in the new model development process. We also apply the

life cycle assessment (LCA) based on ISO 14040 & 14044, having established different LCA

processes for internal combustion engine vehicles (ICEVs), EVs and FCEVs since they have

different value chains. These efforts have been enabling us to improve the environmental-

friendliness of our new models.

The Company has formed dedicated environmental teams for each of its production plants,

and they have established an environmental management system (EMS) that meets the ISO

14001 requirements, obtained the ISO 14001 certification, and successfully undergone a

renewal audit every three years.

Apart from the ISO audits, the Company’s business sites are striving to improve their

environmental management systems on a continuous basis through regular internal

inspections or external audit/verification by external environmental experts such as TÜV SÜD.

In addition, we include the GHG reduction performances of domestic and overseas plants in

key performance indicators (KPIs), and are also operating a company-wide Greenhouse Gas

Council that oversees reductions in the Company’s GHG emissions at all its domestic sites.

As an enterprise subject to the requirements of the Korean government’s GHG and Energy

Target Management Scheme, we set the GHG reduction targets of our domestic business sites

based on the annual GHG quota allocated by the Korean government and act on them

vigorously.

Environmental Management Goals and Performance

Armed with a commitment to protecting the global environment while achieving sustainable

progress for the future of mankind, the Company aims to achieve carbon neutrality by 2045

across all phases from raw material production to vehicle production and operations. To this

end, we have set a number of carbon-neutral goals and worked to achieve them, as shown in

the table below.

Classification

Goals

Vehicle

electrification

Plan to sell 840,000 units by 2026, 1.87 million units by 2030

Achieve 100% electrification of Genesis by 2030

Achieve 100% electrification of vehicles sold in Europe by 2035

Achieve 100% electrification of vehicles sold in main markets by 2040

Hydrogen business

synergy

Expand hydrogen mobility

Produce and supply green hydrogen

Carbon Neutrality in

our factories

Achieve RE100 by 2045

Encouraging our

supply chain to

achieve carbon

neutrality

Reducing carbon emission by 10% or more by 2030 and by 65% or more by

2040 to achieve carbon neutrality by 2045

- Response to Climate Change

Climate Change Strategies

The Company has established a governance system and climate risk management process to

manage its climate change risks systemically. We have set major climate change strategies

through the climate change governance to analyze the potential impact of climate change on

our business and respond to macroscopic changes in the business environment caused by

changes in laws and regulations. We identify various climate risk and opportunity factors, and

preemptively respond to changing market demands through the development of eco-friendly

vehicles and various mobility solution technologies.

Climate Change Management System – Climate Change Governance

At the Company, the ESG Committee, composed of the Company’s key decision makers,

manages matters deemed necessary to respond to climate change, such as reviewing climate

change risks, discussing countermeasures, and evaluating the performance of climate change

response initiatives. In order to respond to climate change more actively, in 2021 we launched

an organization dedicated to promoting carbon neutrality and establishing strategies in such

areas

s products, business sites, and supply chains in collaboration with the related

departments.

Climate Change Management System – Climate Risk/Opportunity Management Process

HMC identifies, assesses, and manages risk and opportunity factors to respond to climate

change issues at the company level. The climate change issues identified by each

region/organization are submitted to the head office’s Planning & Finance Division, which

then figures out risk and opportunity factors for each issue, assesses the strategic and

financial impacts of each factor on the Company, and determines company-wide response

strategies. Material issues are reported to the BOD or top management, and specific action

plans are drawn up according to the decisions made. The established climate change

response plans and policies are implemented by each region/organization, while the

headquarters continuously monitors their progress and makes any necessary improvements.

Carbon Neutrality

The Company’s vision of “Progress for Humanity” includes not only technological

development for the convenience of mobility, but also advancement for a sustainable future.

The Company has instituted “Integrated Solutions to Climate Change” to achieve carbon

neutrality by 2045, and is striving to build a sustainable operating system for future

generations by expanding its electrification capabilities and making a successful transition to

renewable energy with clean mobility, the next-generation platform, and green energy as its

core values. We will make every effort possible to achieve carbon neutrality by 2045, including

reducing our actual carbon dioxide emissions to zero through advanced responses to climate

change based on eco-friendly technologies.

Reducing Product Carbon Footprint

To take part in the drive for carbon neutrality, which has been made the focus of all future

global economic growth and development, the Company is working to achieve carbon

neutrality by 2045 through the introduction of an “eco-friendly mobility ecosystem”.

To reduce carbon production in its vehicles, the Company is shifting its focus from vehicles

equipped with an internal combustion engine to EVs.

To this end, the Company is leading the evolution of transportation by expanding its

electrification line ups based on EV technology and infrastructure, such as the E-GMP

(Electric-Global Modular Platform), a platform dedicated to EVs, and strengthening the

competitiveness of its hydrogen fuel cell system for eventual application to all its mobility

groups including passenger cars, commercial vehicles, public transportation, trams, etc. We

will newly position ourselves as a leading company that realizes carbon neutrality ahead of

others by expanding the electricity and hydrogen charging infrastructure, thereby

contributing to the transition of the global energy system to carbon neutrality.

Carbon Reduction at Business Sites

The Company fully supports the direction and goals of the Paris Agreement on Climate

Change, recognizes the roles and responsibilities in reducing global GHG emissions as a

business, and carries out various activities to contribute to achieving the goals. While

continuing energy reduction activities, such as the introduction of high-efficiency facilities

and process improvements at all business sites, we aim to realize eco-friendly manufacturing

based on the transition to renewable energy sources including solar energy.

We will collaborate with the Group affiliates to achieve the goal of 100% renewable energy at

all our business sites across the globe by 2045, ahead of the 2050 deadline recommended by

the RE100 (The Climate Group).

Life Cycle Carbon Reduction

Governments around the world are tightening carbon emission regulations in line with the

accelerating global efforts to respond to climate change. Automobiles are considered the

main culprit of air pollution and thus the automotive industry is being asked to conduct life

cycle assessments (LCAs) as part of the governments’ environmental regulations. After

establishing an assessment process, the Company conducted LCAs on the Kona EV in 2020

and four other vehicle models in 2021. We will analyze environmental impacts of each sector

in order to continuously identify areas of improvement and make them better to minimize

environmental impacts.

Circular Economy

Based on awareness of extended producer responsibility (EPR) regarding the recovery and

recycling of end-of-life vehicles, the Company is committed to improving the recyclability of

end-of-life vehicles and reducing environmental impact from end-of-life vehicles. We comply

with the end-of-life vehicle recovery and disposal regulations in countries where we sell our

vehicles, while also increasing collection, disposal and recycling rate of end-of-life vehicle, in

cooperation with auto dismantling companies.

To this end, we have been strengthening design which taking recycling into consideration at

the vehicle development stage, and are shifting from a linear (production-consumption-

disposal) to a circular (production-consumption-regeneration) business system by evaluating

and applying materials and parts from the perspective of recyclability

Resource Usage in Business Sites

Corporations are largely responsible for the depletion of the world’s resources, and so is HMC

as well. Due to climate change and reckless business activities, resource shortages including

water are getting worse day by day while environmental issues such as air and water pollution

are also causing great harm to the earth and all living things. In addition to these direct

environmental risks, companies face a variety of crises. The three R’s in resource – reduce,

reuse and recycle – have become more important than ever in the face of raw material risks

caused by war and inflation and increasingly stringent environmental regulation to strengthen

the circular economy. In response, the Company makes continuous efforts to use resources

more efficiently and responsibly through the three R’s.

Strengthening the Management of Harmful Substances

The Company is committed to minimizing and strictly managing all harmful substances used

in its products or generated by its worksites. To this end, we classify harmful substances not

only in our products but also in production plants and take the appropriate measures

according to the domestic laws and international standards. In December 2002, we

established our own management standards for harmful substances (four major heavy

metals), and since then we have been responding preemptively to the rules and regulations

on harmful substances such as the Occupational Health and Safety Act and the Chemicals

Control Act of Korea and the Registration, Evaluation, Authorization and Restriction of

Chemicals (REACH) of the EU to protect the health and safety of all our stakeholders, including

customers and employees, and to minimize adverse effects on the local ecosystem.

(3) Social

- Employees

Strategic HR Management

The Company’s HR management is focused on responding preemptively to major ongoing

changes in the market environment, such as the transition to electrification and competition

over autonomous driving, and thus promotes HR management activities enhancing the new

growth engines in cutting-edge areas such as PBV (Purpose Built Vehicle) , AAM (Advanced

Air Mobility), and robotics. While operating a recruitment system that can secure talents with

the skills and capabilities necessary for its “mobility innovation” and “great transformation

into new growth engines,” the Company quantitatively analyzes information obtained from its

evaluations

employees’

performance,

competency

identification,

organizational

engagement, and social relationships in order to establish a mid- to long-term HR

management plan based on the comprehensive analysis of data. At the same time, we provide

our employees with new opportunities for personal growth by operating a learning support

system that empowers them to develop their unique competencies and career paths on their

own initiative.

Great Workplace Culture

HMC aims to become a company where its employees can grow and feel proud of themselves

and their role in the company. To this end, we have set three work attitudes – Bold Moves,

Positive Energy and Inner Qualities – as our organizational culture goals.

Furthermore, based on the opinions of employees, we have set “Hyundai’s way of working,

CoC (Code of Conduct)” and strive to internalize it company-wide by appointing a person to

take charge of changes of the organizational culture and innovation for each organization,

working together with leaders. In the midst of the prolonged pandemic, the Company is

providing full support to create a comfortable work environment, thereby prioritizing its

employees’ convenience and welfare.

The Company is also working hard to create an organizational culture that allows employees

to immerse themselves in their work in an autonomous and proactive atmosphere based on

active communication with and respect for their fellow talents.

Industrial Health and Safety

Guided by its vision of “Progress for Humanity”, the Company puts top priority on safety in its

business activities, aimed at realizing its health and safety management policy of “providing

a safe and healthy work environment to ensure the lasting value of life”.

To this end, we are doing our utmost to establish a safety culture and prevent serious industrial

accidents by taking all necessary health and safety measures preemptively, while each of our

business sites operates a situation room to respond to the COVID-19 situation. In order not

only to respond to COVID-19 but also to build a safer working environment, we upgraded

aging facilities and protective devices in the safety, firefighting, environment and health

sectors, with an annual budget increase of 573% compared to the previous year. We are also

strengthening our health and safety management system through the management’s

reinforced safety leadership, while also upgrading on-site safety management system by

conducting comprehensive safety inspections in the first and second half of each year.

Human Rights Management

The Company supports and complies with international human rights and labor standards and

guidelines, such as the Universal Declaration of Human Rights, the UN Guiding Principles on

Business and Human Rights, the Core Conventions of the International Labor Organization,

and the OECD Due Diligence Guidance. It fulfills its social responsibilities through human

rights management across its business while communicating and striving for human rights

not only for its employees, but also for its stakeholders such as business partners and

customers. Based on these efforts, we have enacted the Human Rights Charter and disclose

our human rights risk assessment and human rights management implementation status in a

bid to protect and promote the human rights of our employees and stakeholders.

- Suppliers

Win-win Growth

For the Company to secure quality competitiveness and differentiated value, it is essential for

its suppliers to have improved parts technology. We have therefore established a win-win

growth system to help our suppliers to achieve stable and sustainable growth. In 2021, we

continued to take various measures for win-win growth, such as running the Quality and

Technology School, operating financial support programs, and offering education on cutting-

edge technologies. Going forward, the Company will lead the way in promoting win-win

growth with its suppliers and lay a foundation to stand tall in the global market.

Supply Chain ESG

The Company’s supply chain management strategy prioritizes its supplier’s quality,

technologies, supply stability, compliance programs, and eco-friendly production systems.

Based on the strategy, we evaluate and manage ESG risks that may occur in our supply chain,

while offering suppliers training and other support to prevent risks in advance, aimed at

building a sustainable supply chain. We operate an ESG evaluation process for suppliers to

diagnose and resolve risks related to ethics, environment, labor, human rights, safety, and

health that may arise in the process of procuring auto parts and raw and subsidiary materials

while asking high-risk suppliers to establish improvement plans and take improvement

measures. We also help suppliers strengthen their ESG capabilities so that they may secure

sustainable competitiveness on the global stage. Supply chain ESG management status and

related performance were reflected in the KPI of the executives in charge, and reported to the

C-level leaders and Sustainability Management Committee (under the Board of Directors)

-Customer

The Company aims to achieve “zero accidents”, protecting drivers, passengers, and

pedestrians, based on its quality philosophy of “producing defect-free vehicles that will never

break down” backed by cutting-edge safety technologies. To this end, we continue upgrading

overall quality and safety systems not only by promoting preemptive quality and safety

measures from the vehicle development stage, but also by preventing any significant

problems afterward through early detection, early improvement and early after-sales actions.

In particular, we will establish a sustainable safety management system designed to maximize

customer satisfaction and strengthen trust by developing quality and safety training programs,

operating quality and safety reporting centers, analyzing safety information, and establishing

safety test sites.

Customer Experience Innovation

The Company aims to become a beloved and trusted company by realizing mankind’s dream

of “safe and free movement and a peaceful life” and sharing the fruits of its success with all

customers around the world. While providing a valuable mobility experience by connecting

various technologies and infrastructures and creating synergies, we are strengthening our

service mindset of thinking from customer’s perspective, upgrading service quality to provide

new solutions ahead of customer needs, and fulfilling customers’ needs for eco-friendly,

public interest value consumption in conjunction with its brand vision. We always care about

customers and listen to their voices by having more dialogue with them.

- Social Contribution

CSV Initiative

The Company aims to expand its positive social impact and build a sustainable corporate

ecosystem by creating shared value (CSV). To this end, we launched the “Hyundai Continue”

initiative which represents our commitment to the sustainable future. We will grow together

with local communities by creating social value and solving social problems in connection

with mobility business. We will also continue our efforts to promote harmonious coexistence

with the planet, provide freedom in mobility and connections, and deliver hope for future

generations. Moving forward, the Company will strive to create a virtuous cycle of connection

by thinking and working together with various global partners as well as our employees,

customers, and local communities.

(4) Governance

- Board-centered Management System

Composition of the BOD

The Company aims to establish a transparent and sound governance structure. To this end,

based on a deep understanding of its diverse stakeholders, including shareholders and

customers, the Company appoints directors with diversity, expertise and independence, and

strives to maximize shareholders’ rights and interests as well as corporate value. As the

Company’s highest decision-making body, the BOD pursues the goal of sustainable and

balanced growth while faithfully performing the function of checks and balances by

supervising the activities of directors and management. We have been building a better

governance system by appointing independent directors equipped with independence,

diversity, and expertise in their respective fields.

Operating of the BOD

HMC holds BOD and subcommittee meetings every quarter to make decisions on matters

stipulated in the relevant laws and the Articles of Association or major matters related to the

Company management. The meetings are also held whenever matters requiring resolution by

the Board or a subcommittee arise. A Board meeting is convened by its chair or another

member appointed by the Board. At the time of convening the Board, each director is notified

of the meeting time, place, and agenda at least seven days prior to the date of the meeting in

accordance with the regulations of the Board. With the exception of cases outlined within the

Company’s rules and regulations, a BOD resolution must be passed by a majority of the

members in attendance. The BOD consists of a majority of outside directors who fulfill the

functions of monitoring and checking. By providing them with opportunities to participate in

management, the Company enhances the operational efficiency of the BOD. In addition, the

BOD supervises critical issues directly related to the Company’s operations, such as business

ethics and compliance as well as risk management.

BOD Subcommittees

The Company has established four BOD subcommittees – the Audit Committee, the

Compensation Committee, the Recommendation Committee on Candidates for Outside

Directors, and the Sustainability Management Committee. Each subcommittee meets the

ratio of outside directors to maintain independence in accordance with the Commercial Act

and our internal board regulations; and includes experts in the relevant fields according to

segmented task areas and processes. The four subcommittees under the BOD enhance

professionalism and efficiency in the BOD’s work according to the purpose of their

establishment. The attendance rate and voting records of the committee members are

disclosed in the business report.

Protecting Shareholder Rights

The Company carries out a variety of activities to protect shareholder rights. While

guaranteeing shareholders’ basic rights to participate in profit distribution, attend GSMs

(General Shareholder’s Meeting) and exercise voting rights, and receive information in a

regular and timely manner as stipulated in the Commercial Act, the Company seeks to

establish transparent governance by communicating with its shareholders through various

channels. We respect the fair demands and opinions of shareholders, including their exercise

of shareholders’ rights to vote and make proposals, while laying solid foundations for sound

governance through a transparent and rational decision-making process. In addition, we

bolster communication by actively operating investor relation activities such as corporate

briefings, non-deal roadshows (NDRs), and GSMs.

- Business Ethics & Compliance

Ethical Management

As a corporate citizen, the Company is taking the lead in practicing business ethics to fulfill its

economic and legal responsibilities to its stakeholders – including customers, shareholders,

suppliers, and local communities – through ethical management activities and fair trade

compliance. In 2001, we enacted the Ethics Charter, Employee Code of Conduct, and

Guidelines for Ethical Business Conduct to establish the basis for our employees’ ethical

judgments and promote an ethical management culture throughout the Company. In March

2021, we reformed the former Corporate Governance & Communication Committee into the

Sustainability Management Committee to build trust and pursue win-win growth with our

stakeholders.

Compliance Management

The Company practices compliance management effectively through a robust compliance

support system. The Company helps its employees diagnose and prevent compliance risks on

their own through the compliance support officer system, the expanded online compliance

support system, compliance education, compliance self-assessment, compliance guidelines,

and compliance newsletters.

- Risk Management

The Company is facing a shift to two major paradigms – the internalization of future

technologies such as electrification, autonomous driving, and connectivity, and response to

ESG issues and risks. These new paradigms will give us an opportunity to leap forward into a

global top-tier company while carrying the risks posed by uncertainty. Accordingly, we strive

to build proactive risk management culture based on a company-wide risk management and

monitoring system, risk-linked employee performance evaluation, and company-wide

training on related topics. In the immediate future, the Company will conduct a thorough

analysis of the core risks and continue to enhance its risk management processes as an

organization that can turn each new crisis into an opportunity to leap forward.

7. Mid- to long-term strategy of the Company

HMC has been holding CEO Investor Day regularly since 2019 in order to present and share

its mid- to long-term strategies with esteemed shareholders and investors. The 2022 CEO

Investor Day was held in March and the Company presented its 2030 business strategies

focusing on electrification.

In order to achieve carbon neutrality by 2045, the Company announced its roadmap towards

electrification as below.

2030

2035

2040

2045

100% electrification of

Genesis models

100% electrification for

the European markets

100% electrification for

the major markets

Accelerate

electrification for the

emerging markets

On the way of electrification with EV sales target of 840,000 units by 2026 and 1.87 million

units by 2030, the Company considered 3 key factors, capacity, product and software. The

Company is going to expand local production in major markets including localized sourcing

of batteries while developing next generation battery technologies and stabilizing sourcing.

For product competitiveness, next generation modular architecture, IMA (Integrated Modular

Architecture) will be applied to new models. In addition, the Company will achieve software

transformation by securing software competitiveness and expanding investment.

Digital transformation and energy shift towards electric energy have been accelerated since

the outbreak of COVID-19 and the trend of automotive industry has changed rapidly.

In response, the Company announced updated ‘Strategy 2025’ on the CEO Investor Day,

which was held in December 2020, in order to respond to changes in customers and industry

and the Company continues to reflect these changes on its business.

Based on ‘quality’, which is the basis of customer’s trust, the Company will realize its brand

purpose of ‘Quality Time’ that makes all customer’s time valuable by providing differentiated

values of ‘SMART’, which provides personalized and sustainable mobile experience based on

digital technology.

The Company has established three business structures and strategic directions with the goal

of transforming into a ‘Smart Mobility Solution Provider’ that provides quality-based ‘SMART’

value.

The first one is ‘Smart Mobility Device’, which promotes balanced growth between

profitability and sales by enhancing the competitiveness of automotive business and leading

the electrification. The second is ‘Smart Mobility Service’ that supports vehicle sales and

secures business capabilities. Lastly, the Company will preoccupy the fuel cell-based

hydrogen market by securing the hydrogen ecosystem and initiatives with advanced

hydrogen technologies.

The Company is striving to expand its global market share based on strategy 2025 with three

business structures. In particular, the Company will focus on strengthening internal stability

such as market share expansion and brand recognition enhancement rather than expanding

overall sales volume in all regions and the Company will establish a foundation for stable

growth in major markets for future growth.

The detailed strategies for three business structures are as follows.

①

Smart Mobility Device

The Company aims to solidify its brand vision as a smart mobility device provider by

establishing profitability and growth strategies to enhance the competitiveness of automotive

business and secure top-tier leadership in electric vehicles.

The Company plans to improve profitability by simultaneously pursuing an increase in value

of product and brand as well as cost structure innovation and strengthening product portfolio

with expansion of N brand to SUVs and electric vehicles for marketability enhancement.

The Genesis brand aims to strengthen its position in the four major markets (Korea, North

America, Europe, and China) and secure competitiveness in product and cost based on the

next generation platform, eM.

Also, by strengthening product competitiveness based on SMART USP including digital UX,

A.I. connected service, autonomous driving and digitalization, and providing differentiated

customer experiences through innovation in digital-based vehicle purchase/user experience,

the Company will increase the product/brand value that customers feel.

In order to promote cost structure innovation, the Company will manage supply chain risk and

intensified price competition caused by COVID-19.

As a growth strategy, the Company plans to secure top-tier leadership in electric vehicles and

diversify product line ups with new mobility devices such as PBA, AAM and robotics.

The Company launched brand for electric vehicles, IONIQ, to secure leadership in electric

vehicles. The Company will secure cost competitiveness by expanding sales volume of

electric vehicles with the brand and provide differentiated customer experiences with

tightened connection between vehicles and software/services.

In particular, the Company will expand EV line ups, starting with IONIQ 5, and launch more

than 17 models including derivative models by 2030 to achieve 1.87 million units of EV sales

target by 2030. To this end, the Company will enhance EV competitiveness by advancing EV-

dedicated platform and capabilities of securing and developing battery while extending

business areas across the overall EV value chain by entering service business including ESS

and charging infrastructure.

Besides, the Company is developing new mobility devices such as PBV, AAM and robotics with

the aim of commercialization after 2025. In the case of PBV, the Company will enter the

market based on cost competitiveness. For AAM, the Company is developing differentiated

technologies and establishing infrastructure to commercialize UAM (Urban Air Mobility) by

2028 and cargo delivery by 2030. Regarding robotics, the Company will commercialize

industrial, medical and service robot business and develop last mile mobility as well.

②

Smart Mobility Service

The strategic direction for ‘Smart Mobility Service’ is to support vehicle sales and secure

business capabilities through the provision of services based on integrated mobility platform

and the Company plans to expand the business into global markets after implementing it first

in Korea. The Company is going to package mobility devices for B2B/B2B2C and major

services such as vehicle management, maintenance, and financial services and push for a

business model that provides optimal solutions depending on customers.

MOCEAN, a subsidiary specializing in mobility service operation that provides fleet

management and operation solutions for B2B, has been established to launch services for

small and medium-sized rental cars, and the Company is establishing a mobility service

ecosystem based on a win-win model by expanding customer groups and services.

In addition, by operating 'Hyundai/Genesis Developers', which provides customer/vehicle

data to the 3rd party through open API as an open data service, the Company is promoting

the improvement of customer experience in using the vehicle and the establishment of a

foundation for the mobility service ecosystem. The Company has secured more than 210

partners and commercialized 22 services and plans to further expand cooperation with major

companies in the vehicle ecosystem in the future.

Reflecting the needs of customers for convenient and safe mobility within the community,

which has increased due to COVID-19, the Company would like to provide a ‘Community

Mobility Service’ that can enhance the quality of life and social value of its customers at the

same time. The Company has successfully launched on-demand bus and electric kickboard

service ‘i-MOD/i-ZET’ and on-demand ride pooling service ‘Shucle’, and will expand its service

area around Incheon and major new cities in the metropolitan area.

③

Hydrogen for Humanity

Finally, the strategic direction of the hydrogen business is to lead the group’s hydrogen

ecosystem initiative by securing core technologies and expanding the fuel cell system

business. Through the strategic linkage between hydrogen business and carbon neutrality

strategy, the Company expects to be able to secure future growth engines and create

corporate value at the same time while responding to CO2 regulations. The Company plans to

enter overall value chain in hydrogen business with its affiliates as a group of companies by

taking advantage of its leading position in FCEV and will lead the fuel cell business and

government cooperation within the group. By advancing the fuel cell system technology and

expanding the application area to other means of transportation and energy sources, the

Company will secure the hydrogen ecosystem initiatives. To this end, the Company launched

the hydrogen fuel cell brand, HTWO.

HYUNDAI MOTOR COMPANY

AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED

DECEMBER 31, 2022 AND 2021

ATTACHMENT: INDEPENDENT AUDITORS’ REPORT

HYUNDAI MOTOR COMPANY

Contents

INDEPENDENT AUDITORS’ REPORT ----------------------------------------------------------------

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION -----------------------------------

CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------------------

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ---------------------------

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ------------------------------------ 10

CONSOLIDATED STATEMENTS OF CASH FLOWS -----------------------------------------------12

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------14

152, Teheran-ro, Gangnam-gu, Seoul 06236

(Yeoksam-dong, Gangnam Finance Center 27th Floor)

Republic of Korea

Independent Auditors’ Report

To the Board of Directors and Shareholders

Hyundai Motor Company:

Opinion

We have audited the consolidated financial statements of Hyundai Motor Company and its subsidiaries

(“the Group”), which comprise the consolidated statements of financial position as of December 31,

2022 and 2021, the consolidated statements of income, comprehensive income, changes in equity and

cash flows for the years then ended, and notes, comprising significant accounting policies and other

explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material

respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its

consolidated financial performance and its consolidated cash flows for the years then ended in

accordance with Korean International Financial Reporting Standards (“K-IFRS”).

Basis for Opinion

We conducted our audits in accordance with International Standards on Auditing (ISAs) and Korean

Standards on Auditing (KSAs) issued in Republic of Korea. Our responsibilities under those standards

are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial

Statements section of our report. We are independent of the Group in accordance with the ethical

requirements that are relevant to our audit of the consolidated financial statements in Republic of

Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the consolidated financial statements as of and for the year ended December 31, 2022.

These matters were addressed in the context of our audit of the consolidated financial statements as

a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters

Valuation of warranty provisions

As described in Note 2 (20) and Note 17 to the consolidated financial statements, the Group recognized

warranty provision of

￦

10,339,527 million as of December 31, 2022.

The Group offers its customers free warranty services during the guaranteed period and free repair

services in the event of recall or campaign.

To estimate the expected warranty expenditures, the

Group aggregates sales volume by vehicle model and uses historical data of the actual warranty costs.

Warranty provisions are measured at the present value based on the expected warranty expenditures

and discount rates.

To measure and recognize warranty provisions, management applies assumptions

to estimate expected warranty cost per unit by vehicle model and expected number of repair cases

and applies discount rates to measure the present value of provisions. Management uses historical

data of the actual warranty costs to estimate expected warranty cost per unit by vehicle model and

expected number of repair cases. We identified the valuation of warranty provision as a key audit matter

because errors in aggregation of actual warranty costs and sales volume by vehicle models or in

assumptions used to estimate future warranty expenditures and discount rates would have a significant

impact on the consolidated financial statements.

The primary procedures we performed to address this key audit matter included the following:

Understanding the process to measure and recognize warranty provision and testing relevant

controls.

Testing completeness and accuracy of vehicles sold used for estimation through inspection of

related documents.

Evaluating reasonableness of assumptions applied for expected warranty cost per unit by

vehicle model by comparing warranty costs incurred in the current period to the corresponding

warranty costs estimated in the prior period.

Evaluating reasonableness of assumptions applied for expected number of repair cases

through historical data analysis.

Testing accuracy of warranty provision balance by inspecting documents related to historical

data of the actual warranty expenses on a sample basis and testing of recalculation.

Testing discount rates by comparing to external sources of information.

Valuation of financial services receivables

As described in Note 2.(8) and Note 14 to the consolidated financial statements, as of December 31,

2022, the Group recognized financial services receivables, net and loss allowance of

￦

92,398,410

million and

￦

1,726,916 million, respectively.

In accordance with K-IFRS 1109 ‘Financial Instruments’, the Group recognizes allowance for credit loss

for financial services receivables using the expected credit loss (ECL) model.

The ECL model requires

management judgment to assess whether the receivable has undergone a significant increase in credit

risk, as well as other assumptions, such as credit rating and macroeconomic variables. In addition, the

Group also considers historical transaction data, such as delinquency days, bankruptcy, and collection,

to determine assumptions used in the ECL model. As errors in the assumptions applied to the ECL

model could have a significant impact on the consolidated financial statements, we identified the

valuation of financial services receivables as a key audit matter.

The primary procedures we performed to address this key audit matter included the following:

Assessing whether the Group’s accounting policies comply with the requirements in K-IFRS

1109

‘Financial Instruments’.

Understanding the process over the measurement of credit loss allowance on financial services

receivables and testing relevant controls.

On a sample basis, assessing the credit rating and classification of credit quality, including the

identification of significant increase credit risk, through inspection of related documents.

On a sample basis, checking the source data for probability of default and loss given default

and testing appropriateness of calculation methods used for the estimation through

recalculation.

Other Information

Management is responsible for the other information. The other information comprises the information

included in the annual report, but does not include the consolidated financial statements and our

auditors’ report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do

not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the

other information and, in doing so, consider whether the other information is materially inconsistent

with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears

to be materially misstated. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report that fact. We have nothing to

report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated

Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial

statements in accordance with K-IFRS, and for such internal control as management determines is

necessary to enable the preparation of consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the

Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless management either intends to liquidate the

Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements

as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’

report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

guarantee that an audit conducted in accordance with ISAs and KSAs in Republic of Korea

will always

detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs and KSAs in Republic of Korea, we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:



Identify and assess the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks,

and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one

resulting

from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.



Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the Group’s internal control.



Evaluate the appropriateness of accounting policies used in the preparation of the consolidated

financial statements and the reasonableness of accounting estimates and related disclosures

made by management.



Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists

related to events or conditions that may cast significant doubt on the Group’s ability to continue

as a going concern. If we conclude that a material uncertainty exists, we are required to draw

attention in our auditors’ report to the related disclosures in the consolidated financial

statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are

based on the audit evidence obtained up to the date of our auditors’ report. However, future

events or conditions may cause the Group to cease to continue as a going concern.



Evaluate the overall presentation, structure and content of the consolidated financial

statements, including the disclosures, and whether the consolidated financial statements

represent the underlying transactions and events in a manner that achieves fair presentation.



Obtain sufficient appropriate audit evidence regarding the financial information of the entities

or business activities within the Group to express an opinion on the consolidated financial

statements. We are responsible for the direction, supervision and performance of the group

audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant deficiencies in

internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence, and communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence, and where applicable, related

safeguards.

From the matters communicated with those charged with governance, we determine those matters

that were of most significance in the audit of the consolidated financial statements of the current period

and are therefore the key audit matters. We describe these matters in our auditors’ report unless law

or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,

we determine that a matter should not be communicated in our report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits of

such communication.

Our responsibility is to assess whether the consolidated financial statements have been prepared in all

material respects with the requirements laid down in the ESEF Regulation.

The engagement partner on the audit resulting in this independent auditors’ report is Jae-Yeon Kim.

Report on Other Legal and Regulatory Requirements

We have checked the compliance of the consolidated financial statements of the Group as of

December 31, 2022 with relevant requirements set out in the ESEF Regulation that are applicable to

consolidated financial statements.

For the Group it relates to:



Consolidated financial statements prepared in a valid XHTML format;



The XBRL markup of the consolidated financial statements using the core taxonomy and the

common rules on markups specified in in the ESEF Regulation

In our opinion, the consolidated financial statements of the Group as of December 31, 2022, identified

as “9884004RQX8PRBXQ8S60-2022-12-31.zip”, have been prepared, in all material respects, in

compliance with the requirements laid down in the ESEF Regulation.

Seoul, Korea

March 8, 2023, except with respect to

the Report on Other Legal and Regulatory Requirements

section of our report above, as to which the date is March 27, 2023.

This report is effective as of the audit report dates. Certain subsequent events or circumstances,

which may occur between the audit report date and the time of reading this report, could have a

material impact on the accompanying consolidated financial statements and notes thereto.

Accordingly, the readers of the audit report should understand that the above audit report has not

been updated to reflect the impact of such subsequent events or circumstances, if any.

HYUNDAI MOTOR COMPANY

AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED

DECEMBER 31, 2022 AND 2021

The accompanying consolidated financial statements, including all footnote disclosures, were

prepared by, and are the responsibility of, the Company.

Chang, Jae Hoon

Chief Executive Officer

HYUNDAI MOTOR COMPANY

Main Office Address: (Road Name Address) 12, Heolleung-ro, Seocho-gu, Seoul

(Phone Number) 02-3464-1114

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2022 AND DECEMBER 31, 2021

ASSETS

OTES

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Current assets:

Cash and cash equivalents

￦

20,864,879

￦

12,795,554

Shor

-term financial instruments

5,774,597

6,949,333

Other financial assets

5,20

5,934,745

12,396,646

Trade notes and accounts receivable

3,20

4,279,057

3,147,296

Other receivables

4,20

4,458,689

4,220,970

Inventories

14,291,216

11,645,641

Current tax assets

85,867

47,346

Financial services receivables

14,20

38,037,368

35,252,606

on-current assets classified as held for sale

22,302

28,121

Other assets

7,20

2,640,553

2,081,853

Total current assets

96,389,273

88,565,366

on-current assets:

Lon

-term financial instruments

112,557

306,410

Other financial assets

5,20

3,889,776

3,539,286

Lon

-term trade notes and accounts receivable

3,20

179,781

137,157

Other receivables

4,20

821,050

741,168

Propert

, plant and equipmen

9,40

36,153,190

35,543,083

Investment propert

10,40

144,450

156,656

Intan

ible assets

11,40

6,102,377

5,846,986

Investments in

oint ventures and associates

25,199,437

22,429,117

et defined benefit assets

837,502

219,721

Deferred tax assets

3,237,309

2,224,833

Financial services receivables

14,20

52,326,478

45,776,526

Investments in operatin

leases

27,681,534

26,327,996

-of-use assets

1,117,293

940,826

Other assets

7,20

1,550,455

1,191,284

Total non-current assets

159,353,189

145,381,049

Total assets

￦

255,742,462

￦

233,946,415

(Continued)

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2022 AND DECEMBER 31, 2021

LIABILITIES AND EQUITY

OTES

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Current liabilities:

Trade notes and accounts pa

able

￦

10,797,065

￦

9,155,255

Other pa

ables

20,39

8,277,891

6,335,645

Shor

-term borrowin

16,20,40

11,366,480

13,087,836

Current portion of lon

-term debt and debentures

16,20,40

25,574,131

20,578,902

Income tax pa

able

1,008,506

751,929

Provisions

8,102,596

6,664,647

Other financial liabilities

18,20

99,144

55,187

Lease liabilities

12,20

405,053

167,266

on-current liabilities classified as held for sale

5,365

Other liabilities

19,20,27

8,600,241

7,440,120

Total curren

liabilities

74,236,472

64,236,787

on-current liabilities:

Lon

-term other pa

ables

20,39

726,115

769,487

Debentures

16,20,40

62,960,060

63,458,809

Lon

-term deb

16,20,40

12,285,149

10,667,731

et defined benefit liabilities

61,861

79,165

Provisions

4,327,985

4,214,137

Other financial liabilities

18,20

262,518

87,258

Deferred tax liabilities

5,027,741

3,689,328

Lease liabilities

12,20

705,751

783,306

Other liabilities

19,20,27

4,252,265

3,344,618

Total non-curren

liabilities

90,609,445

87,093,839

Total liabilities

164,845,917

151,330,626

Equity:

Capital stoc

1,488,993

Capital surplus

4,241,303

4,070,260

Other capital items

(1,713,928)

(1,968,385)

Accumulated other comprehensive loss

(1,620,682)

(1,772,601)

Retained earnin

79,953,601

73,167,855

Equit

attributable to the owners of the Compan

82,349,287

74,986,122

on-controllin

interests

8,547,258

7,629,667

Total equit

90,896,545

82,615,789

Total liabilities and equit

￦

255,742,462

￦

233,946,415

(Concluded)

See accompanying notes to the consolidated financial statements.

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

OTES

2022

2021

(In millions of Korean Won, except per share amounts)

Sales

27,40

￦

142,527,535

￦

117,610,626

Cost of sales

114,209,483

95,680,131

Gross profi

28,318,052

21,930,495

Sellin

and administrative expenses

28,32

18,498,283

15,251,546

Operatin

rofit

9,819,769

6,678,949

Gain on investments in joint ventures and

associates, ne

1,556,583

1,303,365

Finance income

1,218,813

912,802

Finance expenses

1,054,228

548,410

Other income

2,257,113

1,447,261

Other expenses

31,32

2,850,107

1,834,405

Profit before income tax

10,947,943

7,959,562

Income tax expense

2,964,329

2,266,485

Profit for the year

￦

7,983,614

￦

5,693,077

Profit attributable to:

Owners of the Compan

7,364,364

4,942,356

on-controllin

interests

619,250

750,721

Earnings per share attributable to the owners

of the Compan

Basic earnings per share:

Common stoc

￦

28,521

￦

18,979

preferred stock

￦

28,207

￦

19,002

Diluted earnings per share:

Common stoc

￦

28,521

￦

18,979

referred stoc

￦

28,207

￦

19,002

See accompanying notes to the consolidated financial statements.

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

2022

2021

(In millions of Korean Won)

Profit for the year

￦

7,983,614

￦

5,693,077

Other comprehensive income (loss) :

Items that will not be reclassified subsequently to

rofit or loss:

Profit (loss) on financial assets measured at FVOCI, ne

(223,420)

102,137

Remeasurements of defined benefit plans

391,308

175,392

Changes in retained earnings of equity-accounted

investees, ne

164,475

77,482

Changes in share of OCI of equity-accounted

investees, ne

(175,059)

21,803

157,304

376,814

Items that may be reclassified subsequently to

rofit or loss:

Loss on financial assets measured at FVOCI, ne

(36,545)

(6,448)

Gain on valuation of cash flow hedge

derivatives, ne

218,377

5,015

Changes in share of OCI of

equity-accounted

investees, ne

10,008

546,504

Gain on foreign operations translation, ne

701,718

1,246,177

893,558

1,791,248

Total other comprehensive income

1,050,862

2,168,062

Total comprehensive income

￦

9,034,476

￦

7,861,139

Comprehensive income attributable to:

Shareholders of the Compan

8,234,396

6,938,637

on-controllin

interests

800,080

922,502

Total comprehensive income

￦

9,034,476

￦

7,861,139

See accompanying notes to the consolidated financial statements.

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Capital

stoc

Capital

surplus

Other

capital

items

Accumulated

other

comprehensive

income (loss)

Retained

earnings

Total equity

attributable to

the owners of

the Company

Non-

controlling

interests

Total

equity

(In millions of Korean Won)

Balance at

January 1, 2021

￦

1,488,993

￦

4,190,093

￦

(1,700,592)

￦

(3,409,661)

￦

68,911,800

￦

69,480,633

￦

6,860,337

￦

76,340,970

Comprehensive

income:

Profit for the period

4,942,356

750,721

5,693,077

Gain (loss) on financial

assets measured at

FVOCI, net

(21,021)

114,718

93,697

1,992

95,689

Gain (loss) on valuation

of cash flow hedge

derivatives, ne

(47,902)

52,917

5,015

Changes in valuation

of equity-accounted

investees, ne

544,170

77,482

621,652

24,137

645,789

Remeasurements of

defined benefit plans

167,021

8,371

175,392

Gain on foreign

operations

translation, ne

1,161,813

84,364

1,246,177

Total comprehensive

income

1,637,060

5,301,577

6,938,637

922,502

7,861,139

Transactions with

owners, recorded

directly in equity:

Payment of cash

dividends

(1,045,775)

(140,854)

(1,186,629)

Increase in paid-in

capital of

subsidiaries by

issuing stoc

19,819

165,311

185,130

Acquisition of

investment of

subsidiaries

(164,567)

65,966

(98,601)

Disposals of

investment of

subsidiaries

(71,634)

Purchases of

treasury stocks

(305,337)

Disposals of

treasury stocks

24,915

37,544

62,459

Repayment of

hybrid bonds

(150,323)

Others

253

(21,638)

(21,385)

Total transactions with

owners, recorded

directly in equity

(119,833)

(267,793)

(1,045,522)

(1,433,148)

(153,172)

(1,586,320)

Balance at

December 31, 2021

￦

1,488,993

￦

4,070,260

￦

(1,968,385)

￦

(1,772,601)

￦

73,167,855

￦

74,986,122

￦

7,629,667

￦

82,615,789

(Continued)

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Concluded)

See accompanying notes to the consolidated financial statements.

Capital

stoc

Capital

surplus

Other

capital

items

Accumulated

other

comprehensive

income (loss)

Retained

earnings

Total equity

attributable to

the owners of

the Company

Non-

controlling

interests

Total

equity

(In millions of Korean Won)

Balance at

January 1, 2022

￦

1,488,993

￦

4,070,260

￦

(1,968,385)

￦

(1,772,601)

￦

73,167,855

￦

74,986,122

￦

7,629,667

￦

82,615,789

Comprehensive

income:

Profit for the period

7,364,364

619,250

7,983,614

Gain (loss) on financial

assets measured at

FVOCI, net

(430,012)

174,758

(255,254)

(4,711)

(259,965)

Gain on valuation

of cash flow hedge

derivatives, ne

169,796

48,581

218,377

Changes in valuation

of equity-accounted

investees, ne

(160,325)

164,475

4,150

(4,726)

(576)

Remeasurements of

defined benefit plans

378,880

12,428

391,308

Gain on foreign

operations

translation, ne

572,460

129,258

701,718

Total comprehensive

income

151,919

8,082,477

8,234,396

800,080

9,034,476

Transactions with

owners, recorded

directly in equity:

Payment of cash

dividends

(1,298,212)

(56,800)

(1,355,012)

Increase in paid-in

capital of

subsidiaries by

issuing stoc

560

Acquisition of

investment of

subsidiaries

273,271

Disposals of

investment of

subsidiaries

(83,094)

Purchases of

treasury stocks

(193,452)

Disposals of

treasury stocks

174,346

447,909

622,255

Others

(3,303)

1,481

(1,822)

(16,426)

(18,248)

Total transactions with

owners, recorded

directly in equity

171,043

254,457

(1,296,731)

(871,231)

117,511

(753,720)

Balance at

December 31, 2022

￦

1,488,993

￦

4,241,303

￦

(1,713,928)

￦

(1,620,682)

￦

79,953,601

￦

82,349,287

￦

8,547,258

￦

90,896,545

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

OTES

2022

2021

(In millions of Korean Won)

Cash flows from operatin

activities:

Cash

enerated from operations:

Profit for the

￦

7,983,614

￦

5,693,077

ustments

20,255,938

15,777,589

Chan

es in operatin

assets and liabilities

(13,922,657)

(20,287,776)

14,316,895

1,182,890

Interest receive

867,192

449,789

Interest pai

(2,695,029)

(1,905,945)

Dividend receive

531,902

213,735

Income tax pai

(2,393,649)

(1,116,885)

et cash

rovided b

(used in) operatin

activities

10,627,311

(1,176,416)

Cash flows from investin

activities:

Chan

es in shor

-term financial instruments, ne

1,082,254

1,326,872

Chan

es in other financial assets (current), ne

5,452,691

225,974

Decrease in other financial assets (non-current)

41,521

259,202

Collection of other receivables

60,779

67,437

Disposals of lon

-term financial instruments

122,124

35,183

Proceeds from disposals of property, plant and

equipmen

136,870

113,008

Proceeds from disposals of intan

ible assets

7,357

20,261

Proceeds from disposals of investment in joint

ventures and associates

19,115

8,873

Acquisitions of subsidiaries, net of cash acquire

(89,167)

(294,210)

Increases in other financial assets (non-current)

(276,728)

(212,964)

Increases in other receivables

(80,170)

(69,563)

Purchases of lon

-term financial instruments

(63,612)

(279,471)

Acquisitions of

ropert

, plant and equipmen

(4,014,969)

(4,304,334)

Acquisitions of intan

ible assets

(1,718,733)

(1,556,993)

Acquisitions of investments in joint ventures and

associates

(1,696,266)

(565,528)

Cash outflows from chan

es in consolidation

(197,188)

(125,611)

Others

10,627

169,285

et cash used in investing activities

(1,203,495)

(5,182,579)

(Continued)

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

OTES

2022

2021

(In millions of Korean Won)

Cash flows from financin

activities:

Proceeds from shor

-term borrowin

￦

3,388,510

￦

3,769,996

Proceeds from lon

-term debt and debentures

30,089,495

40,688,506

Proceeds from capital contribution from non-

controllin

interes

341,864

165,311

Acquisitions of subsidiaries

(300,670)

Repa

ment of shor

-term borrowin

(6,070,109)

(4,390,047)

Repa

ment of lon

-term debt and debentures

(27,086,324)

(29,164,478)

Repa

ment of lease liabilities

(195,245)

(185,158)

Purchases of treasur

stocks

(193,451)

(305,337)

Dividends pai

(1,354,996)

(1,186,800)

Repa

ment of h

brid bonds

(150,323)

Others

(244,243)

(148,714)

et cash provided by (used in) financing activities

(1,324,499)

8,792,286

Effect of exchange rate changes on cash and

cash equivalents

(29,992)

500,127

et increase in cash and cash equivalents

8,069,325

2,933,418

Cash and cash equivalents, be

innin

of the

12,795,554

9,862,136

Cash and cash equivalents, end of the

￦

20,864,879

￦

12,795,554

(Concluded)

See accompanying notes to the consolidated financial statements.

HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

GENERAL:

Hyundai Motor Company (the “Company” or “Parent Company”) was incorporated in December 1967, under the laws of

the Republic of Korea.

The Company and its subsidiaries (the “Group”) manufacture and distribute motor vehicles and

parts, operate vehicle financing and credit card processing, and manufacture trains.

The shares of the Company have been listed on the Korea Exchange since June 1974, and the Global Depositary Receipts

issued by the Company have been listed on the London Stock Exchange and Luxembourg Stock Exchange.

As of December 31, 2022, the major shareholders of the Company are Hyundai MOBIS (45,782,023 shares, 21.43%) and

Mr. Chung, Mong Koo (11,395,859 shares, 5.33%).

(1)

The Group’s consolidated subsidiaries as of December 31, 2022 are as follows.

Name of subsidiaries

Nature of

usiness

Location

Ownership

ercentage

Indirect ownership

HYUNDAI CAPITAL SERVICES, INC.

Financing

Korea

59.68%

HYUNDAI CARD CO., LTD.

(

)

36.96%

HYUNDAI ROTEM COMPANY (*2)

Manufacturing

33.77%

HYUNDAI KEFICO CORPORATION

100.00%

HYUNDAI PARTECS

56.00%

undai NGV

ineerin

53.66%

MAINtrans company

Services

100.00%

HYUNDAI ROTEM COMPANY

100.00%

Rotem SRS Co., Ltd.

100.00%

JEONBUK HYUNDAI MOTORS FC

CO., LTD

Football club

100.00%

AirPlu

Inc.

R&D and Sales

99.32%

42dot Inc. (*5)

66.08%

Movia Inc.

Trans

ortin

100.00%

42dot 100.00%

Hyundai Motor America (HMA)

Sales

USA

100.00%

undai Ca

ital America

(

HCA

)

Financin

80.00%

HMA 80.00%

Hyundai Motor Manufacturing

Alabama, LLC (HMMA)

Manufacturing

100.00%

HMA 100.00%

Hyundai Motor Group Metaplant America,

LLC (HMGMA)

60.00%

HMA 60.00%

undai Translead

(

)

100.00%

Stamped Metal American Research

Technolo

, Inc.

(

SMARTI

)

Holding company

72.45%

HMA 72.45%

SMART Alabama, LLC (SMART)

Manufacturing

100.00%

SMARTI 100.00%

Hyundai America Technical Center,

Inc. (HATCI)

R&D

100.00%

Genesis Motor America LLC

Sales

100.00%

HMA 100.00%

Hyundai Rotem USA Corporation

Manufacturing

100.00%

HYUNDAI ROTEM COMPANY

100.00%

Hyundai Motor Investment, Inc.

Investment

100.00%

42 Air, Inc

R&D and Sales

100.00%

42dot 100.00%

HYUNDAI AUTO CANADA CORP.

(

HACC

)

Sales

Canada

100.00%

HMA 100.00%

HYUNDAI AUTO CANADA CAPTIVE

INSURANCE INC.

(

HACCI

)

Insurance

100.00%

Hyundai Capital Canada Inc. (HCCA)

Financing

70.00%

HYUNDAI CAPITAL SERVICES,

INC. 20.00%

Hyundai Capital Lease Inc. (HCLI)

100.00%

HCCA 100.00%

HK Lease Funding LP

100.00%

HCLI 99.99%,

HCCA Funding Inc. 0.01%

HCCA Funding Inc.

100.00%

HCLI 100.00%

HCCA Funding Two Inc.

100.00%

HCCA 100.00%

Name of subsidiaries

Nature of

usiness

Location

Ownership

ercentage

Indirect ownership

HK Retail Funding LP

Financing

Canada

100.00%

HCCA 99.99%,

HCCA Funding Two Inc 0.01%

HYUNDAI MOTOR INDIA LIMITED

(HMI)

Manufacturing

India

100.00%

HYUNDAI MOTOR INDIA

ENGINEERING PRIVATE LIMITED

(

HMIE

)

R&D

100.00%

HMI 100.00%

HYUNDAI INDIA INSURANCE

BROKING PRIVATE LIMITED

(

HIIB

)

Insurance

100.00%

HYUNDAI CAPITAL INDIA PRIVATE

LIMITED

(

HCI

)

Financing

100.00%

HYUNDAI CAPITAL SERVICES,

INC. 100.00%

Hyundai Mobility Japan Co., Ltd. (HMJ)

(

)

Sales

Japan

100.00%

Hyundai Mobility Japan R&D Center Co.,

Ltd.

(

HMJ R&D

)

(

)

R&D

100.00%

Beijing Jingxian Motor Safeguard

Service Co., Ltd. (BJMSS)

Sales

China

100.00%

Beijing Jingxianronghua Motor Sale

Co., Ltd.

100.00%

BJMSS 100.00%

Genesis Motor Sales (Shanghai) Co.,

LTD.

100.00%

Hyundai Millennium (Beijing) Real Estate

Development Co., Ltd.

Real estate

development

99.00%

CMEs 99.00%

Rotem Equipments (Beijing) Co., Ltd.

Sales

100.00%

HYUNDAI ROTEM COMPANY

100.00%

KEFICO Automotive Systems(Beijing)

Co., Ltd.

Manufacturing

100.00%

HYUNDAI KEFICO

CORPORATION 100.00%

KEFICO Automotive

Systems(Chongqing) Co., Ltd.

90.00%

HYUNDAI KEFICO

CORPORATION 90.00%

Hyundai Truck & Bus (China) Co., Ltd.

(HTBC)

100.00%

HYUNDAI THANH CONG VIETNAM

AUTO MANUFACTURING

CORPORATION

(

HTMV

)(

)

Vietnam

50.00%

HYUNDAI THANH CONG

COMMERCIAL VEHICLE JOINT

STOCK COMPANY (HTCV)(*1)

Sales

50.00%

HYUNDAI THANH CONG VIET NAM

AUTO JOINT VENTURE JOINT

STOCK COMPANY

(

HTV

)(

)

50.00%

HYUNDAI KEFICO VIETNAM

COMPANY LIMITED

Manufacturing

100.00%

HYUNDAI KEFICO

CORPORATION 100.00%

HYUNDAI MOTOR COMPANY

AUSTRALIA PTY LIMITED

(

HMCA

)

Sales

Australia

100.00%

HYUNDAI MOTOR PHILIPPINES, INC.

(

HMPH

)

Philippines

99.99%

HYUNDAI MOBILITY (THAILAND)

CO., LTD.

(

HMT

)

Thailand

100.00%

PT HYUNDAI MOTOR

MANUFACTURING INDONESIA

(

HMMI

)

Manufacturing

Indonesia

99.99%

PT HYUNDAI MOTORS INDONESIA

(

HMID

)

Sales

100.00%

HMMI 0.01%

PT Hyundai Solusi Mobilitas (HSM)

99.99%

HMID 99.99%

PT. HYUNDAI CAPITAL INDONESIA

(HCID)

Financing

100.00%

HYUNDAI CAPITAL SERVICES,

INC. 100.00%

undai Ca

ital Australia Pt

Limite

Australia

100.00%

HR MECHANICAL SERVICES

LIMITED

Services

New Zealand

100.00%

HYUNDAI ROTEM COMPANY

100.00%

Hyundai Motor Manufacturing Czech

s.r.o.

(

HMMC

)

Manufacturing

Czech

100.00%

Hyundai Motor Czech s.r.o. (HMCZ)

Sales

100.00%

Hyundai Motor Europe GmbH (HME)

Marketing and

Sales

Germany

100.00%

Hyundai Motor Deutschland GmbH

(HMD)

Sales

100.00%

Name of subsidiaries

Nature of

usiness

Location

Ownership

ercentage

Indirect ownership

Hyundai Motor Europe Technical

Center GmbH (HMETC)

R&D

Germany

100.00%

undai Motors

ort GmbH

(

HMSG

)

Marketin

100.00%

HME 100.00%

Hyundai Capital Europe GmbH.

Financing

100.00%

HYUNDAI CAPITAL SERVICES,

INC. 100.00%

HMCIS B.V.

Holding company

Netherlands

100.00%

HMMR 1.65%

Hyundai Motor Netherlands B.V.

(HMNL)

Sales

100.00%

Hyundai Motor Manufacturing Rus

LLC (HMMR)

Manufacturing

Russia

70.00%

Hyundai Motor CIS Limited Liability

Company (HMCIS)

Sales

100.00%

HMCIS B.V. 100.00%

Hyundai Mobility Lab Limited Liability

Company. (HML)

R&D

100.00%

HMCIS 99.00%, HMMR 1.00%

HYUNDAI CAPITAL SERVICES

LIMITED LIABILITY COMPANY

Financing

100.00%

Hyundai Capital Europe 100.00%

Limited liability company Hyundai Truck

& Bus Rus

(

HTBR

)

Sales

100.00%

Hyundai Assan Otomotiv Sanayi Ve

Ticaret Anonim Sirketi

(

HAOSVT

)

Manufacturing

Turkiye

97.00%

Hyundai EURotem Demiryolu Araclari

Sana

i ve Ticaret A.S

50.50%

HYUNDAI ROTEM COMPANY

50.50%

Hyundai Rotem Company – Hyundai

EUROTEM Demiryolu Araclari SAN.

VE TIC. A.S ORTAK GIRISIMI

Sales

100.00%

HYUNDAI ROTEM COMPANY

65.00%,

Hyundai EURotem A.S. 35.00%

Hyundai Rotem Company - Hyundai

EUROTEM Mahmutbey Projesi

ORTAK GIRISIMI

100.00%

HYUNDAI ROTEM COMPANY

85.00%,

undai EURotem A.S. 15.00%

Rotem SRS Ukraine LLC.

Services

Ukraine

100.00%

Rotem SRS Co., Ltd. 100.00%

Rotem SRS E

gyp

t LLC.

gyp

98.00%

Rotem SRS Co., Ltd. 98.00%

HYUNDAI MOTOR UK LIMITED

(

HMUK

)

Sales

100.00%

HYUNDAI MOTOR COMPANY ITALY

S.R.L.

(

HMCI

)

Italy

100.00%

HYUNDAI MOTOR ESPANA, S.L.U.

(

HMES

)

Spain

100.00%

HYUNDAI MOTOR FRANCE (HMF)

France

100.00%

undai Motor Poland s

. z o.o.

(

HMP

)

Polan

100.00%

GENESIS MOTOR EUROPE GmbH

(

GME

)

Germany

100.00%

GENESIS MOTOR UK LIMITED

(

GMUK

)

100.00%

GME 100.00%

GENESIS MOTOR SWITZERLAND AG

(

GMCH

)

Switzerland

100.00%

GENESIS MOTOR DEUTSCHLAND

GmbH

(

GMD

)

Germany

100.00%

Hyundai Hydrogen Mobility AG (HHM)

Switzerlan

75.00%

Hyundai Hydrogen Mobility Germany

GmbH (HHMG)

Germany

100.00%

HHM 100.00%

HYUNDAI MOTOR DE MEXICO S DE

RL DE CV

(

HMM

)

Mexico

100.00%

HT 0.01%

Hyundai de Mexico, SA DE C.V.,

(

HYMEX

)

Manufacturing

99.99%

HT 99.99%

HYUNDAI KEFICO MEXICO, S.

DE R.L. DE C.V.

100.00%

HYUNDAI KEFICO

CORPORATION 100.00%

Hyundai Rio Vista, Inc.

Real estate

develo

ment

USA

100.00%

HT 100.00%

HYUNDAI MOTOR BRASIL

MONTADORA DE AUTOMOVEIS

LTDA (HMB)

Manufacturing

Brazil

100.00%

Hyundai Capital Brasil Servicos De

Assistencia Financeira Ltda.

Financing

100.00%

HYUNDAI CAPITAL SERVICES,

INC. 100.00%

Hyundai Rotem Brasil Industria E

Comercio De Trens Ltda.

Manufacturing

100.00%

HYUNDAI ROTEM COMPANY

100.00%

Name of subsidiaries

Nature of

usiness

Location

Ownership

ercentage

Indirect ownership

HMS SERVICOS DE MOBILIDADE

LTDA. (*4)

Holding company

Brazil

99.99%

HMB 99.99%

China Millennium Corporations (CMEs)

Cayman

Islands

59.60%

China Mobility Fund, L.P.

Investment

72.00%

ZER01NE Accelerator

Investment Fund No.1

99.00%

Autopia Sixty-fifth ~ Seventy-Fifth

Asset Securitization Specialty Company

(

)

Financing

0.50%

HYUNDAI CAPITAL SERVICES,

INC. 0.50%

Zavurov First Co., Ltd. (*1)

0.00%

HYUNDAI CAPITAL SERVICES,

INC. 0.00%

Super Series Sixth ~ Fourteenth

Securitization S

ecialt

Co., Ltd.

(

)

0.50%

HYUNDAI CARD CO., LTD.

0.50%

Bluewalnut Co., Ltd.

100.00%

HYUNDAI CARD CO., LTD.

100.00%

MOCEAN Co.,Lt

Mobility Service

80.00%

undai Cha Fundin

, LLC

Financin

USA

100.00%

HCA 100.00%

Hyundai Lease Titling Trust

100.00%

undai HK Fundin

, LLC

100.00%

Hyundai HK Funding Two, LLC

100.00%

undai HK Fundin

Three, LLC

100.00%

Hyundai HK Funding Four, LLC

100.00%

undai ABS Fundin

, LLC

100.00%

HK Real Properties, LLC

100.00%

undai Auto Lease Offerin

, LLC

100.00%

Hyundai HK Lease, LLC

100.00%

Extended Term Amortizin

Pro

ram, LLC

100.00%

Hyundai Asset Backed Lease, LLC

100.00%

HCA Exchan

e, LLC

100.00%

undai Protection Plan, Inc.

Insurance

100.00%

Hyundai Protection Plan Florida, Inc.

100.00%

undai Ca

ital Insurance Services, LLC

100.00%

Hyundai Capital Insurance Company

100.00%

Power Protect Extended Services, Inc.

100.00%

Power Protect Extended Services Florida,

Inc.

100.00%

(*1)

The Group is considered to have substantive control over the entities by virtue of an agreement or relationship with other

investors, or relationship with structured entities.

(*2)

Even though the shareholding ratio of ownership is less than half, the Group has de facto control over the entity due to the

relative size of the voting rights held and the degree of share dispersion of other voting rights holders.

(*3)

During the year ended December 31, 2022, the names of companies were changed from Hyundai Motor Japan Co., Ltd. and

Hyundai Motor Japan R&D Center Inc. to Hyundai Mobility Japan Co., Ltd. and Hyundai Mobility Japan R&D Center Co.,

Ltd., respectively.

(*4)

The name of company was changed from HMB Holding Participacoes Financeiras Ltda. to HMS SERVICOS DE

MOBILIDADE LTDA.

(*5)

During the year ended December 31, 2022, the Group acquired additional shares of 42dot Inc. and reclassified its shares to a

subsidiary. Although the shareholding ratio of common stock is 66.08%, the shareholding ratio with voting rights is 55.90%

considering the redeemable convertible preference share with voting rights issued.

(2)

Summarized financial position and results of operations of major consolidated subsidiaries

and for the year

ended December 31, 2022 are as follows.

ame of subsidiaries

Assets

Liabilities

Sales

Profit (loss)

for the

erio

(In millions of Korean Won)

HYUNDAI CAPITAL SERVICES, INC. (*)

￦

38,647,454

￦

33,017,783

￦

4,436,122

￦

437,087

HYUNDAI CARD CO., LTD. (*)

25,102,360

21,256,797

3,015,376

253,957

HYUNDAI ROTEM COMPANY (*)

4,823,870

3,332,399

3,163,344

194,534

HYUNDAI KEFICO CORPORATION (*)

2,118,244

1,151,710

2,255,354

86,781

HCA (*)

65,174,141

57,784,155

12,392,502

416,542

HMA

13,534,367

8,484,603

33,684,033

2,549,423

HMMA

4,974,559

3,863,001

11,399,961

(807,997)

HMI (*)

4,932,560

2,071,012

9,230,238

710,908

HMMC

4,554,767

1,724,596

9,291,193

680,064

HME (*)

2,604,267

2,528,135

14,302,787

12,792

HACC (*)

1,811,550

1,003,562

4,146,159

102,258

HMB

1,801,019

1,195,946

3,314,994

97,250

HAOSVT

1,733,527

867,053

3,625,354

288,338

HMMR

1,242,120

406,509

965,782

(230,103)

HMCA

1,074,603

874,474

2,371,422

45,739

(*)

Based on the subsidiary’s consolidated financial statements

Summarized financial position and results of operations of major consolidated subsidiaries

and for the year

ended December 31, 2021 are as follows.

ame of subsidiaries

Assets

Liabilities

Sales

Profit (loss)

for the

erio

(In millions of Korean Won)

HYUNDAI CAPITAL SERVICES, INC. (*)

￦

34,917,071

￦

29,710,340

￦

3,485,601

￦

432,055

HYUNDAI CARD CO., LTD. (*)

21,654,608

18,026,253

2,744,902

314,139

HYUNDAI ROTEM COMPANY (*)

4,107,183

2,838,938

2,872,512

51,412

HYUNDAI KEFICO CORPORATION (*)

2,038,940

1,187,748

2,029,003

60,512

HCA (*)

59,230,349

52,672,107

10,686,865

1,050,250

HMA

8,578,534

5,929,588

22,883,130

1,028,470

HMMA

4,522,540

2,741,306

8,088,117

236,955

HMMC

4,406,392

1,852,526

7,426,329

417,537

HMI (*)

4,310,031

1,782,415

7,339,424

437,395

HME (*)

2,107,163

2,044,181

11,846,977

11,410

HACC (*)

1,946,770

1,119,224

3,582,216

117,911

HMMR

1,931,470

959,020

3,178,717

172,149

HAOSVT

1,469,527

887,896

3,021,886

198,490

HMB

1,387,554

913,764

2,074,018

41,020

HMCA

911,712

716,694

1,938,967

28,116

(*)

Based on the subsidiary’s consolidated financial statements

(3)

The financial statements of all subsidiaries used in the preparation of the consolidated financial

statements

are prepared for the same reporting periods as the Company’s.

(4)

Summarized cash flows of non-wholly owned subsidiaries that have material non-controlling interests to the

Group and subsidiaries of finance segment for the year ended December 31, 2022 are as follows.

Description

HYUNDAI

CAPITAL

SERVICES, INC.

HYUNDAI CARD

CO., LTD.

HCA

HCCA

HYUNDAI

ROTEM

COMPANY

(In millions of Korean Won)

Provided by (used in)

operatin

activities

￦

(1,111,074)

￦

(618,906)

￦

(254,261)

￦

(1,257,295)

￦

716,229

Provided by (used in)

investin

activities

(223,067)

(70,359)

28,172

(1,741)

(429,045)

Provided by (used in)

financin

activities

2,572,598

2,379,211

389,229

1,274,970

(97,120)

Effect of exchange rate

changes on cash and

cash equivalen

22,292

(542)

(3,784)

et increase (decrease) in

cash and cash

equivalents

1,238,457

1,689,946

185,432

15,392

186,280

Beginning balance of

cash and cash

equivalents

509,170

579,444

368,191

72,402

319,728

Ending balance of cash

and cash equivalents

￦

1,747,627

￦

2,269,390

￦

553,623

￦

87,794

￦

506,008

Summarized cash flows of non-wholly owned subsidiaries that had material non-controlling interests to the

Group

and subsidiaries of finance segment for the year ended December 31, 2021 are as follows.

Description

HYUNDAI

CAPITAL

SERVICES, INC.

HYUNDAI CARD

CO., LTD.

HCA

HCCA

HYUNDAI

ROTEM

COMPANY

(In millions of Korean Won)

Provided by (used in)

operatin

activities

￦

(367,733)

￦

(1,400,073)

￦

(7,321,554)

￦

(1,558,760)

￦

(62,714)

Provided by (used in)

investin

activities

(40,360)

(105,567)

(955,140)

(642)

146,142

Provided by (used in)

financin

activities

510,859

1,310,731

8,132,339

1,549,724

(99,586)

Effect of exchange rate

changes on cash and

cash equivalen

339

37,398

6,651

(2,842)

et increase (decrease) in

cash and cash

equivalents

103,105

(194,909)

(106,957)

(3,027)

(19,000)

Beginning balance of

cash and cash

equivalents

406,065

774,353

475,148

75,429

338,728

Ending balance of cash

and cash equivalents

￦

509,170

￦

579,444

￦

368,191

￦

72,402

￦

319,728

(5)

Details of non-wholly owned subsidiaries of the Company that have material non-controlling interests as of

and for the year ended December 31, 2022 are as follows.

Description

HYUNDAI

CAPITAL

SERVICES, INC.

HYUNDAI CARD

CO., LTD.

HYUNDAI

ROTEM

COMPANY

(In millions of Korean Won)

Ownership percentage of non-controlling

interests

40.32%

63.04%

66.23%

Accumulated non-controllin

interests

￦

2,263,283

￦

2,511,596

￦

845,085

Profit attributable to non-controlling

interests

171,675

160,104

127,747

Dividends paid to non-controllin

interests

56,753

Details of non-wholly owned subsidiaries of the Company that had material non-controlling interests as of and for

the year ended December 31, 2021 are as follows.

Description

HYUNDAI

CAPITAL

SERVICES, INC.

HYUNDAI

CARD CO.,

LTD.

HYUNDAI

ROTEM

COMPANY

(In millions of Korean Won)

Ownership percentage of non-controlling

interests

40.32%

63.04%

66.23%

Accumulated non-controllin

interests

￦

2,097,956

￦

2,379,871

￦

702,366

Profit attributable to non-controlling

interests

170,930

198,059

28,968

Dividends paid to non-controllin

interests

37,002

92,463

(6)

Financial support provided to consolidated structured entities

As of December 31, 2022, HYUNDAI CARD CO., LTD. and HYUNDAI CAPITAL SERVICES, INC., subsidiaries

of the Company, have agreements that provide counterparties with rights of recourse in the event of default on the

derivatives relating to asset-backed securities issued by consolidated structured entities, Autopia Sixty-Eighth and

Sixty-Ninth Asset Securitization Specialty Company, Super Series Sixth, Eighth, Ninth, Twelfth and Fourteenth

Securitization Specialty Co., Ltd..

(7)

Nature and risks associated with interests in unconsolidated structured entities

Nature of interests in unconsolidated structured entities of the Group as of December 31, 2022 is as follows.

Description

Purpose

ature of business

Method of

fundin

Total assets (*)

(In millions of Korean Won)

Asset

securitization SPC

Fund raising

through asset-

securitization

Fund

collection

Asset Backed

Securities and

others

￦

711,575

Investment fund

Investment trust and

others

Fund management

and operation,

distribution of

operating profit

and others

Beneficiary

(Investment)

certificates

6,877,841

Structured Finance

Fund raising

through project

financing

Project financing

for construction

project and

ship investmen

Project financing

and others

24,128,653

(*) The financial information of unconsolidated structured entity includes unaudited amounts.

Nature of interests in unconsolidated structured entities of the Group as of December 31, 2021 is as follows.

Description

Purpose

ature of business

Method of

fundin

Total assets (*)

(In millions of Korean Won)

Asset

securitization SPC

Fund raising

through asset-

securitization

Fund

collection

Asset Backed

Securities and

others

￦

138,514

Investment fund

Investment trust and

others

Fund management

and operation,

distribution of

operating profit

and others

Beneficiary

(Investment)

certificates

9,874,543

Structured Finance

Fund raising

through project

financing

Project financing

for construction

project and

ship investmen

Project financing

and others

19,487,943

(*) The financial information of unconsolidated structured entity includes unaudited amounts.

Risks associated with interests in unconsolidated structured entities of the Group as of

December 31, 2022 are as

follows.

Description

Financial support provided

to the structured entit

Maximum amount

of exposure to loss

of the structured

entit

Book value in the

structured entit

Metho

Purpose

(In millions of Korean Won)

Asset

securitization SPC

￦

70,208

Loan

obli

ations

Loan agreement

(Credi

line)

￦

77,000

Investment fund

238,424

Beneficiary

certificates,

Investmen

trus

Invest

agreement

238,424

Structured Finance

1,585,070

Loan

obli

ations

Loan agreement

(Credi

line)

2,089,900

Risks associated with interests in unconsolidated structured entities of the Group as of December 31, 2021 are as

follows.

Description

Financial support provided

to the structured entit

Maximum amount

of exposure to loss

of the structured

entit

Book value in the

structured entit

Metho

Purpose

(In millions of Korean Won)

Asset

securitization SPC

￦

18,797

Loan

obli

ations

Loan agreement

(Credi

line)

￦

24,000

Investment fund

178,552

Beneficiary

certificates,

Investmen

trus

Invest

agreement

178,552

Structured Finance

826,220

Loan

obli

ations

Loan agreement

(Credi

line)

1,117,599

(8)

Significant restrictions on the subsidiaries

As of December 31, 2022, HYUNDAI CARD CO., LTD., a subsidiary of the Company, is subject to significant

restrictions that require it to obtain consent from a nominated outside director recommended by non-controlling

shareholders in the events of acquiring a company, entering into new business, providing guarantees, making

investments in stocks or contracts beyond a certain amount and others.

(9)

Changes in consolidated subsidiaries

Subsidiaries newly included in or excluded from consolidation during the year ended December 31, 2022 are as follows.

Changes

ame of subsidiaries

Description

Include

Autopia Seventy-Third Asset Securitization Specialty Company

Establishmen

Autopia Seventy-Fourth Asset Securitization Specialty Company

Autopia Seventy-Fifth Asset Securitization Specialty Company

Super Series Twelfth Securitization Specialty Co., Ltd.

Super Series Thirteenth Securitization Specialty Co., Ltd.

Super Series Fourteenth Securitization Specialty Co., Ltd.

Hyundai Motor Group Metaplant America, LLC (HMGMA)

Hyundai Hydrogen Mobility Germany GmbH (HHMG)

HYUNDAI MOBILITY (THAILAND) CO., LTD. (HMT)

PT Hyundai Solusi Mobilitas (HSM)

42dot Inc.

Acquisition

42 Air, Inc

Movia Inc.

Excluded

supernal, LLC

Changed to equity

metho

Super Series Fifth Securitization Specialty Co., Ltd.

Liquidation

Autopia Sixty-fourth Asset Securitization Specialty Company

KyoboAXA Private Tomorrow Securities Investment Trust No.12

Shinhan BNPP Private Corporate Security Investment Trust No.34

KB Leaders Private Securities Fund1(Bond Mixed)

Samsung ETF rotation Private Investment Trust 1

MoceanLab, Inc.

HYUNDAI ROTEM MALAYSIA SDN BHD

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(1)

Basis of consolidated financial statements preparation

The consolidated financial statements have been prepared in accordance with Korean International Financial Reporting

Standards (“K-IFRS”), as prescribed in the Act on External Audit of Stock Companies, Etc in the Republic of Korea.

The significant accounting policies used for the preparation of the consolidated financial statements are summarized

below. These accounting policies are consistent with those applied to the consolidated financial statements as of and for

the year ended December 31, 2021, except for the new or amended accounting standards and interpretations described

below.

New and amended standards that have been applied from the year beginning on January 1, 2022 are as follows.

The Group applied

Proceeds before Intended Use

(Amendments to K-IFRS 1016

‘Property, Plant and Equipment’)

Cost of Fulfilling a Contract

(Amendments to K-IFRS 1037 ‘

Provisions, Contingent Liabilities and Contingent Assets’)

Annual Improvements to IFRS Standards 2018-2020

Reference to the Conceptual Framework

(Amendments to K-IFRS

1103

‘Business Combinations’)

and

Covid-19-Related Rent Concessions beyond 30 June 2021

(Amendments to K-IFRS

1116

‘Leases’

) for the first time on January 1, 2022. These standards and other new accounting standards effective from

January 1, 2022 do

not have a material impact on the Group's consolidated financial statements.

2) A number of new standards are effective for annual periods beginning after January 1, 2022 and earlier application is

permitted; however, the Group has not early adopted them in preparing these consolidated financial statements.

The Group is currently evaluating the effect of the following new or amended standards and interpretations, if any, to the

consolidated financial statements, however, those standards are not expected to have a significant impact on the Group’s

consolidated financial statements.

- Classification of Liabilities as Current or Non-current (K-IFRS 1001

‘Presentation of Financial Statements’

)

- K-IFRS 1117

‘Insurance Contracts’

and its amendments

- Disclosure of Accounting policies (K-IFRS 1001 ‘

Presentation of Financial Statements’

)

- Definition of Accounting estimate (K-IFRS 1008 ‘

Accounting Policies, Changes in Accounting Estimates and Errors

’)

- Deferred Tax related to Assets and Liabilities arising from a Single Transaction (K-IFRS 1012 ‘

Income Taxes

’)

- Disclosure of Gains and Losses on Valuation of Financial Liabilities with Conditions for Adjustment of Exercise Price

(K-IFRS 1001 ‘

Presentation of Financial Statements

’)

The consolidated financial statements were approved by the Board of Directors on January 26, 2023 and are

expected to be submitted for the Company's annual general meeting of shareholders.

(2)

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except as otherwise stated in the

accounting policies below. Historical cost is usually measured at the fair value of the consideration given to acquire the

assets.

(3)

Basis of consolidations

The consolidated financial statements incorporate the financial statements of the Company and entities (including

structured entities) controlled by the Company (or its subsidiaries).

Control is achieved when the Company:



has power over

the investee;



is exposed, or has rights, to variable returns from its involvement with the investee; and



has the ability to use its power to affect its returns.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to

one or more of the three elements of control listed above.

When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting

rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.

The Group

considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in an investee are

sufficient to give it power, including:



the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote

holders;



potential voting rights held by the Group, other vote holders or other parties;



rights arising from other contractual arrangements; and



any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to

direct the relevant activities at the time that decisions need to be made, including voting patterns at previous

shareholders’ meetings.

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements

of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into

line with those used by the Group.

All intragroup transactions, balances, income and expenses are eliminated in full on

consolidation.

Non-controlling interests are presented in the consolidated statement of financial position within equity,

separately from the equity of the owners of the Group.

The carrying amount of non-controlling interests consists of the

amount of those non-controlling interests at the initial recognition and the changes in shares of the non-controlling

interests in equity since the date of the acquisition.

Total comprehensive income is attributed to the owners of the Group

and to the non-controlling interests even if the non-controlling interest has a deficit balance.

Changes in the Group's ownership interests in subsidiaries, without a loss of control, are accounted for as equity

transactions.

The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the

changes in their relative interests in the subsidiaries.

Any difference between the amount by which the non-controlling

interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed

to owners of the Group.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the

aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous

carrying amount of the assets (including goodwill), liabilities of the subsidiary and any non-controlling interests. The

amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the

Group had directly disposed of the relevant assets (i.e., reclassified to profit or loss or transferred directly to retained

earnings as specified by applicable K-IFRS).

The fair value of any investment retained in the former subsidiary at the

date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under K-IFRS 1109

Financial Instruments: Recognition and Measurement

or, when applicable, the cost on initial recognition of an investment

in an associate or a joint venture.

(4)

Business combination

Acquisitions of businesses are accounted for using the acquisition method.

The consideration transferred in a business

combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets

transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests

issued by the Group in exchange for control of the acquiree.

The consideration includes any asset or liability resulting

from a contingent consideration arrangement and is measured at fair value.

Acquisition-related costs are recognized in profit or loss as incurred. When a business combination is achieved in stages,

the Group's previously held equity interest in the acquiree is remeasured at its fair value at the acquisition date (i.e., the

date when the Group obtains control) and the resulting gain or loss, if any, is recognized in profit or loss.

Prior to the

acquisition date, the amount resulting from changes in the value of its equity interest in the acquiree that have previously

been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be

appropriate if that interest were directly disposed of.

(5)

Revenue recognition

In accordance with K-IFRS 1115, all types of contracts recognize revenues by the 5-step revenue recognition model (1)

identification of contract

→

(2) identification of performance obligations

→

(3) calculation of transaction price

→

(4)

allocation of transaction price to performance obligations

→

(5) recognition of revenue when performance obligation is

satisfied.

1) Identification of performance obligations

The Group operates businesses such as the manufacture and sale of automobiles and auto parts. In the automobile sales

contracts with customers, services other than automobile sales are separately identified as performance obligations.

2) Performance obligations satisfied at a point in time

Revenue is recognized when the performance obligations under the terms of a contract with the Group’s customer are

satisfied, which generally occurs with the transfer of control of goods or services.

3) Performance obligations satisfied over time

In assessing whether the control over goods or services is transferred over time, the Group evaluates whether the customer

simultaneously obtains and consumes the benefits provided by the Group’s performance, whether the assets are controlled

by the customer, and whether the assets created by the Group have no substitute purpose, and whether the Group is entitled

to reimbursement of costs incurred to date, including a reasonable margin.

4) Allocation of transaction price

The Group allocates the transaction price to each of the performance obligations identified in a single contract in

proportion to its stand-alone selling price. When the stand-alone selling price is not directly observable, the Group

estimates the stand-alone selling price using the adjusted market assessment approach, or the expected cost plus a margin

approach.

5) Variable consideration

The Group estimates the amount of consideration it will be entitled to receive using the method (either the expected value

method or the most likely amount method) that provides the most accurate prediction.

Variable consideration is included in the transaction price only to the extent that it is highly probable that a significant

reversal in the cumulative amount of revenue recognized will not occur in future periods.

6) Significant financing element

If the period between the transfer of the goods or services promised to the customer and the payment from the customer

is within one year, the Group does not adjust the promised amount of consideration for the effects of a significant financing

component, as a practical expedient.

7) Construction contracts

Where the outcome of a construction contract can be estimated reliably, the contract revenue and contract costs associated

with the construction contract are recognized as revenue and expenses, respectively, by reference to the stage of

completion of the contract activity at the end of reporting period.

The percentage of completion of a contract activity is reliably measured based on the proportion of contract costs incurred

for work performed to date relative to the estimated total contract costs, by surveys of work performed or by completion

of a physical proportion of the contract work.

Variations in contract work, claim and incentive payments are included to

the extent that the amount can be measured reliably and its receipt is considered probable.

Where the outcome of a

construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred

that it is probable will be recoverable.

Contract costs are recognized as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an

expense immediately.

(6)

Foreign currency translation

The individual financial statements of each entity in the Group are prepared and presented in the currency of the

primary economic environment in which the entity operates (its functional currency).

In preparing the financial statements of the individual entities, transactions occurring in currencies other than their

functional currency (foreign currencies) are recorded using the exchange rate on the dates of the transactions.

At the end

of each reporting period, monetary items denominated in foreign currencies are translated using the exchange rate at the

reporting period.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated

using the exchange rate at the date of the transaction.

Non-monetary items that are measured at fair value in a foreign

currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences

resulting from settlement of assets or liabilities and translation of monetary items denominated in foreign currencies are

recognized in profit or loss in the period in which they arise except for some exceptions.

Foreign exchange gains or losses are classified in finance income (expenses) or other income (expenses) by the nature of

the transaction or event.

For the purpose of presenting the consolidated financial statements, assets and liabilities in the Group’s foreign operations

are translated into Won, using the exchange rates at the end of reporting period.

Income and expense items are translated

at the average exchange rate for the period, unless the exchange rate during the period has significantly fluctuated, in

which case the exchange rates at the dates of the transactions are used.

The exchange differences arising, if any, are

recognized in equity as other comprehensive income.

Upon the disposal of a foreign operation, the cumulative amount

of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the gain or

loss on disposal is recognized.

Any goodwill arising on the acquisition of a foreign operation and any fair value

adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated

as assets and liabilities of the foreign operation and translated at the exchange rate at the end of reporting period.

(7)

Financial Assets

The Group classifies financial assets as financial assets measured at fair value through profit or loss, financial assets

measured at amortized cost or financial assets measured at fair value through other comprehensive income according to

the terms and purpose of acquisition. The Group determines the classification of a financial asset at initial recognition.

All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending

on the classification of the financial assets.

Classification of financial assets

Debt instruments that meet the following conditions are measured subsequently at amortized cost:



The financial asset is held within a business model whose objective is to hold financial assets in order to

collect contractual cash flows; and



The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments

of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive

income (FVOCI):



The financial asset is held within a business model whose objective is achieved by both collecting contractual

cash flows and selling the financial assets; and



The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments

of principal and interest on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVPL).

Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a

financial asset:



The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other

comprehensive income if certain criteria are met; and



The Group may irrevocably designate a debt investment that meets the amortized cost or FVOCI criteria as

measured at FVPL if doing so eliminates or significantly reduces an accounting mismatch

1-1)

Amortization cost and effective interest rate method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest

income over the relevant period. The amortized cost of a financial asset is the amount at which the financial asset is

measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective

interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.

The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss

allowance. Interest income is recognized using the effective interest method for debt instruments measured subsequently

at amortized cost and at FVOCI.

1-2)

Debt instruments classified as at FVOCI

Corporate bonds are initially measured at fair value plus transaction costs. Subsequently, changes in the carrying amount

of these corporate bonds as a result of foreign exchange gains and losses, impairment gains or losses, and interest income

calculated using the effective interest method are recognized in profit or loss. The amounts that are recognized in profit

or loss are the same as the amounts that would have been recognized in profit or loss if these corporate bonds had been

measured at amortized cost. All other changes in the carrying amount of these corporate bonds are recognized in other

comprehensive income and accumulated in investments revaluation reserve. When these corporate bonds are

derecognized, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to

profit or loss.

1-3)

Equity instruments designated as at FVOCI

On initial recognition, the Group may make an irrevocable election (on an instrument-by-instrument basis) to designate

investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held

for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVOCI are initially measured at fair value plus transaction costs. Subsequently, they

are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive

income and accumulated in the investments revaluation reserve. The cumulative gain or loss will not be reclassified to

profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings.

1-4)

Financial assets measured at FVPL

Financial assets that do not meet the criteria for being measured at amortized cost or FVOCI are measured at FVPL. Gains

or losses arising from changes in the fair value of FVPL, dividends and interest income from the financial assets are

recognized in profit or loss.

2) Foreign exchange gain / loss

The carrying amount of a financial asset designated as a foreign currency is determined in foreign currencies and is

translated at the spot exchange rate at the end of the reporting period.

(8)

Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured

at amortized cost or at FVOCI, lease receivables, trade receivables and contract assets, as well as on financial guarantee

contracts. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since

initial recognition of the respective financial instrument.

The Group always recognizes lifetime expected credit losses (ECL) for trade receivables, contract assets and lease

receivables. The ECLs on these financial assets are estimated using a provision matrix based on the Group’s historical

credit loss experience and valuation of individual assets, adjusted for factors that are specific to the debtors, general

economic conditions and an assessment of forecast on present and future conditions reflecting time value of money where

appropriate.

For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in

credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly

since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-

month ECLs.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life

of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from

default events on a financial instrument that are possible within 12 months after the reporting date.

1) Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the

Group compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default

occurring on the financial instrument at the date of initial recognition.

In particular, the following information is taken into account when assessing whether credit risk has increased

significantly since initial recognition:



an actual or expected significant deterioration in the financial instrument’s external (if available) or internal

credit rating;



other significant increases in credit risk;

2) Definition of default

The Group believes that, based on past experience, if the debtor violates the terms of the contract, it is considered to

constitute a default event for internal credit risk management purposes.

3) Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash

flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following

observable data:

(a)

significant financial difficulty of the issuer or the borrower;

(b)

a breach of contract, such as a default or past due event as defined by the Group’s internal policy;

4) Measurements and recognition of expected credit losses

The measurement of ECLs is a function of the probability of default, loss given default (i.e. the magnitude of the loss if

there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based

on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial

assets, this is represented by the assets’ gross carrying amount at the reporting date.

For financial assets, the ECLs are estimated as the difference between all contractual cash flows that are due to the Group

in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective

interest rate.

If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECLs in the

previous reporting period, but determines at the current reporting date that the conditions for lifetime ECLs are no longer

met, the Group measures the loss allowance at an amount equal to 12-month ECLs at the current reporting date, except

for financial assets for which a simplified approach is used.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding

adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are

measured at FVOCI, for which the loss allowance is recognized in other comprehensive income and accumulated in the

investment revaluation reserve, and does not reduce the carrying amount of the financial asset in the statement of financial

position.

(9)

Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when

it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the

Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the

transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have

to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group

continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and

the sum of the consideration received and receivable is recognized in profit or loss. In addition, on derecognition of an

investment in a debt instrument classified as at FVOCI, the cumulative gain or loss previously accumulated in the

investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in equity

instrument which the Group has elected on initial recognition to measure at FVOCI, the cumulative gain or loss previously

accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained

earnings.

(10) Inventory

Inventory is measured at the lower of cost or net realizable value.

Inventory cost, including the fixed and variable

manufacturing overhead cost, is calculated, using the moving average method, except for the cost for inventory in transit,

which is determined by the specific identification method.

(11) Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence, but not a joint venture or a subsidiary.

Significant

influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or

joint control over those policies.

A joint venture is a joint arrangement, whereby the parties that have joint control of the arrangement have rights to the

net assets of the joint arrangement.

Joint control is the contractually agreed sharing of control of an arrangement, which

exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The investment in an associate or a joint venture is initially recognized at cost and accounted for using the equity method.

Under the equity method, an investment in an associate or a joint venture is initially recognized in the consolidated

statement of financial position at cost and adjusted thereafter to recognize the Group's share of the profit or loss and other

comprehensive income of the associate or the joint venture.

When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint

venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate

or the joint venture), the Group discontinues recognizing its share of further losses.

Additional losses are recognized only

to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or

the joint venture.

Investment in associate or joint venture is accounted for using the equity method from the date that the investee becomes

the associate or joint venture. Any excess of the cost of acquisition over the Group's share of the net fair value of the

identifiable assets, liabilities and contingent liabilities of an associate or a joint venture recognized at the date of

acquisition is recognized as goodwill, which is included within the carrying amount of the investment.

Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over

the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

The requirements of K-IFRS 1028 are applied to determine whether it is necessary to recognize any impairment loss with

respect to the Group’s investment in an associate or a joint venture. When there is any indication of impairment, the entire

carrying amount of the investment (including goodwill) is tested for impairment in accordance with K-IFRS 1036 as a

single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its

carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms part of the

carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with K-IFRS 1036

to the extent that the recoverable amount of the investment subsequently increases.

Upon disposal of an associate or a joint venture that results in the Group losing significant influence over that associate

or joint venture, any retained investment is measured at fair value at that date and the fair value is regarded as its fair

value on initial recognition as a financial asset in accordance with K-IFRS 1109.

The difference between the previous

carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the

determination of the gain or loss on disposal of the associate or joint venture.

In addition, the Group accounts for all

amounts previously recognized in other comprehensive income in relation to that associate or joint venture on the same

basis we would be required if that associate or joint venture had directly disposed of the related assets or liabilities.

Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would

be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss

from equity to profit or loss (as reclassification adjustment) when it loses significant influence over that associate or joint

venture. When the Group reduces its ownership interest in an associate or a joint venture, but the Group continues to use

the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been

recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be

reclassified to profit or loss on the disposal of the related assets or liabilities.

In addition, the Group applies K-IFRS 1105

to a portion of investment in an associate or a joint venture that meets the criteria to be classified as held for sale.

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint

venture or an investment in a joint venture becomes an investment in an associate.

There is no remeasurement to fair

value upon such changes in ownership interests.

Unrealized gains from transactions between the Group and its associates or joint ventures are eliminated up to the shares

in associate (joint venture) stocks.

Unrealized losses are also eliminated, unless evidence of impairment in assets

transferred is produced.

If the accounting policy of associates or joint ventures differs from the Group, financial

statements are adjusted accordingly before applying equity method of accounting.

(12)

Property, plant and equipment

Property, plant and equipment is recognized if, and only if it is probable that future economic benefits associated with the

asset will flow to the Group, and the cost of the asset can be measured reliably.

After the initial recognition, property,

plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.

The cost includes

any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating

in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and

restoring the site on which it is located.

In addition, in case the recognition criteria are met, the subsequent costs will be

added to the carrying amount of the asset or recognized as a separate asset, and the carrying amount of what was replaced

is derecognized.

Depreciation is computed using the straight-line method based on the estimated useful lives of the assets.

The

representative useful lives are as follows.

Representative useful lives (

ears)

Buildin

s and structures

–

Machiner

and equipmen

–

Vehicles

–

Dies, mold and tools

–

Office equipmen

–

Othe

–

The Group reviews the depreciation method, the estimated useful lives and residual values of property, plant and

equipment at the end of each annual reporting period.

If expectations differ from previous estimates, the changes are

accounted for as a change in accounting estimate.

(13)

Investment properties

Investment properties are property held to earn rentals or for capital appreciation or both.

Investment properties are

measured initially at its cost and transaction costs are included in the initial measurement.

After initial recognition, the

book value of investment properties is presented at the cost less accumulated depreciation and accumulated impairment

losses.

Subsequent costs are recognized as the carrying amount of the asset when, and only when it is probable that future

economic benefits associated with the asset will flow to the Group, and the cost of the asset can be measured reliably, or

recognized as a separate asset if appropriate.

The carrying amount of what was replaced is derecognized.

Land is not depreciated, and other investment properties are depreciated using the straight-line method over the period

from 20 to 50 years.

The Group reviews the depreciation method, the estimated useful lives and residual values at the

end of each annual reporting period.

If expectations differ from previous estimates, the changes are accounted for as a

change in accounting estimate.

(14)

Intangible assets

Goodwill

Goodwill arising from a business combination is recognized as an asset at the time of obtaining control (the acquisition

date).

Goodwill is measured as the excess of the aggregate of the consideration transferred, the amount of any non-

controlling interest in the acquiree and the acquisition-date fair value of the Group’s previously held equity interest in the

acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed

exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the

acquisition-date fair value of the Group’s previously held equity interest in the acquiree, the excess is recognized

immediately in profit or loss as a bargain purchase gain.

Goodwill is not amortized, but tested for impairment at least annually.

For purposes of impairment tests, goodwill is

allocated to those cash-generating units (“CGU”) of the Group expected to have synergies from the business combination.

CGU that goodwill has been allocated is tested for impairment every year or when an event occurs that indicates

impairment.

If the recoverable amount of a CGU is less than its carrying amount, the impairment will first decrease the goodwill

allocated to that CGU and the remaining impairment will be allocated among other assets relative to its carrying value.

Impairment recognized for goodwill may not be reversed.

When disposing a subsidiary, related goodwill will be included

in gain or loss from disposal.

Development costs

The expenditure on research is recognized as an expense when it is incurred.

The expenditure on development is

recognized as an intangible asset, and amortization is computed using the straight-line method based on the estimated

useful lives of the assets since the asset is available for use or sale.

Research and development activities are conducted in phases of preceding research, development approval, product

development and mass production.

The Group generally recognizes intangible assets as development activities after the

development approval phases which product specification, release schedule, and sales plan are established.

Expenditure

incurred at the previous phase is recognised as an expense as it is considered as research activities when it is incurred.

Intangible assets acquired separately

Intangible assets are measured initially at cost, and are subsequently measured at cost less accumulated amortization and

accumulated impairment losses.

Intangible assets are amortized by the straight-line method based on estimated useful lives from the date of availability.

The Group reviews the estimated useful life and amortization method at the end of each annual reporting period.

expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate.

Intangible

assets assessed as having indefinite useful life such as club membership are subjected to impairment test at least once a

year without amortization.

The representative useful lives are as follows.

Representative useful lives (

ears)

Development costs

3, 7

Industrial propert

hts

–

Software

–

Othe

–

(15)

Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired.

any such indication exists, the Group estimates the recoverable amount of the asset to determine the extent of the

impairment loss.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the cash inflows of

an individual asset are largely independent from other assets or group of assets, the recoverable amount is measured for

that individual asset; otherwise, it is measured for the cash generating unit (CGU) to which the asset belongs.

impairment loss in respect of goodwill is not reversed. For other assets, impairment loss is reversed if the recoverable

amount increases in subsequent years, but only to the extent that the asset’s carrying amount does not exceed the carrying

amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Intangible assets with indefinite useful lives or intangible assets not yet available for use are not amortized, but tested for

impairment annually.

(16) Non-current assets classified as held for sale

The Group classifies a non-current asset (or disposal group) as held for sale, if its carrying amount will be recovered

principally through a sale transaction rather than through continuing use.

For this to be the case, the asset (or disposal

group) must be available for immediate sale in its present condition subject only to terms that are usual and customary

for sales of such assets (or disposal groups) and its sale must be highly probable.

The management must be committed

to a plan to sell the asset (or disposal group), and the sale should be expected to qualify for recognition as a completed

sale within one year from the date of classification.

Non-current assets (or disposal group) classified as held for sale are measured at the lower of their carrying amount and

fair value, less costs to sell.

(17)

Lease

At contract inception, the Group assesses whether a contract is or contains a lease. A contract is, or contains, a lease if

the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.

When assessing whether the contract conveys a right to control the use of an identified asset, definition of a lease under

K-IFRS 1116 has been applied.

1) As a lessee

At inception or effective date of change, the Group allocates the consideration in the contract to each lease on the basis

of their relative stand-alone prices. However, for leases of properties in which it is a lessee, the Group has elected not to

separate non-lease components and will instead account for the lease and non-lease components as a single lease

component.

The Group recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is

initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made

at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove

the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received.

The right-of use asset is subsequently depreciated using the straight-line method from the commencement date to the end

of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or

the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset

will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property

and equipment. In addition, the right-of use asset is periodically reduced by impairment losses, if any, and adjusted for

certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement

date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s

incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use

asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-

term leases. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis

over the lease term.

2) As a lessor

The accounting policies applicable in the same period to the Group as a lessor are not different from those under K-IFRS

1116. When the Group acted as a lessor, it determined at lease inception whether each lease was a finance lease or an

operating lease. To classify each lease, the Group made an overall assessment of whether the lease transferred

substantially all of the risks and rewards incidental to ownership of the underlying asset. If this was the case, then the

lease was a finance lease; if not, then it was an operating lease.

Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group’s net investment

in the leases.

Finance lease interest income is allocated to accounting periods so as to reflect an effective interest rate on

the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognized on a

straight-line basis over the term of the relevant lease.

Initial direct costs incurred in negotiating and arranging an operating

lease are added to the carrying amount of the carrying amount of investments in operating leases and recognized as

expense on a straight-line basis over the lease term.

(18) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized to

the cost of those assets, until they are ready for their intended use or sale.

A qualifying asset is an asset that necessarily

takes a substantial period of time to get ready for its intended use or sale.

Investment income earned on the temporary

investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs

eligible for capitalization.

All other borrowing costs are recognized in profit or loss in the period in which they are

incurred.

(19) Retirement benefit plans

The retirement benefit obligation recognized in the consolidated statements of financial position represents the present

value of the defined benefit obligation, less the fair value of plan assets.

Defined benefit obligations are calculated by an

actuary using the Projected Unit Credit Method.

The present value of the defined benefit obligations is measured by discounting estimated future cash outflows by the

interest rate of high-quality corporate bonds, with similar maturity as the expected post-employment benefit payment date.

In countries where there is no deep market in such bonds, the market yields at the end of the reporting period on

government bonds are used.

The remeasurements of the net defined benefit liabilities (assets) comprising actuarial gain or loss from changes in

actuarial assumptions or differences between actuarial assumptions and actual results, the effect of the changes to the

asset ceiling and return on plan assets, excluding amounts included in net interest on the net defined benefit liabilities

(assets), are recognized in other comprehensive income of the consolidated statements of comprehensive income, which

is immediately recognized as retained earnings.

Those recognized in retained earnings will not be reclassified in profit

or loss.

Past service costs are recognized in profit and loss when the plan amendment occurs, and net interest is calculated

by applying the discount rate determined at the beginning of the annual reporting period to the net defined benefit

liabilities (assets).

Defined benefit costs are composed of service cost (including current service cost, past service cost,

as well as gains and losses on settlements), net interest expense (income), and remeasurements.

The retirement benefit obligation recognized in the consolidated statements of financial position represents the actual

deficit or surplus in the Group’s defined benefit plans.

Any surplus resulting from this calculation is limited to the present

value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the

plans.

Contributions to defined contribution retirement benefit plans are recognized as expenses when employees provide

services eligible for payment.

(20) Provisions

A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the

consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and

uncertainties surrounding the obligation.

A provision is measured using the present value of the cash flows estimated to

settle the present obligation.

The increase in provision due to passage of time is recognized as interest expense.

The Group recognizes provisions for costs expected to be incurred in the future for the repair of regular parts within the

warranty period based on historical experience and compensation for accidents caused by defects in the exported products

or parts of the product when such amounts are probable of payment. Also, the Group recognizes provisions for the

probable losses of unused loan commitment, construction contracts, pre-contract sale or service contract due to legal or

constructive obligations. In addition, the Company recognizes provisions expected to be paid in the future with regard to

long-term employee benefits payable to long-term employees.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,

a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the

receivable can be measured reliably.

(21) Taxation

Income tax expense is composed of current and deferred tax.

Current tax

The current tax is computed based on the taxable profit for the current year.

The taxable profit differs from the profit

before income tax as reported in the consolidated statements of income because it excludes items of income or expense

that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

The Group’s

current tax liability is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting

period.

The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or

received that reflects uncertainty related to income taxes, if any.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the

consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax

liabilities are generally recognized for all taxable temporary differences.

Deferred tax assets shall be generally recognized

for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which

those deductible temporary differences can be utilized.

Such deferred tax assets and liabilities shall not be recognized if

the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of

other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and

associates and interests in joint ventures, except when the Group is able to control the timing of the reversal of the

temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred

tax assets arising from deductible temporary differences associated with such investments and interests are only

recognized to the extent that taxable profit will be available against which the temporary difference can be utilized and

they are expected to be reversed in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that

it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied in the period in which the

liability is settled or the asset is realized, based on tax rates and tax laws that have been enacted or substantively enacted

by the end of the reporting period.

The measurement of deferred tax assets and liabilities reflects the tax consequences

that would follow from the manner in which the Group expects to recover or settle the carrying amount of its assets and

liabilities at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against

current tax liabilities and when they relate to income tax levied by the same taxation authority.

Also, they are offset when

different taxable entities that intend either to settle current tax liabilities and assets on a net basis, or to realize the assets

and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or

assets are expected to be settled or recovered.

Recognition of current and deferred taxes

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other

comprehensive income or directly in equity, or items arising from initial accounting treatments of a business combination.

The tax effect arising from a business combination is included in the accounting for the business combination.

(22) Treasury stock

When the Group repurchases its equity instruments (treasury stock), the incremental costs and net of tax effect are

deducted from equity and recognized as other capital item deducted from the total equity in the consolidated statements

of financial position.

In addition, profits or losses from purchase, sale or retirement of treasury stocks are directly

recognized in equity and not in current profit or loss.

(23)

Financial liabilities and equity instruments

Debt instruments and equity instruments issued by the Group are recognized as financial liabilities or equity depending

on the contract and the definitions of financial liability and equity instrument.

1) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its

liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is

recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

2) Financial guarantee liability

A financial guarantee contract is a contract that the issuer must pay a certain amount of money to compensate for losses

incurred by the holder due to the failure of a specific debtor to pay the due date on the original contract or modified terms

of the debt instrument. Financial guarantee liabilities are measured initially at fair value and subsequently measured at

the greater of the following, unless they are designated as at fair value through profit or loss or arising from the transfer

of assets.



Loss provision calculated in accordance with K-IFRS 1109



The amount recognized less the accumulated profits recognized in accordance with K-IFRS 1115

3) Financial liabilities measured at FVPL

Financial liabilities are classified as at FVPL when the financial liability is (i) contingent consideration of an acquirer in

a business combination, (ii) held for trading or (iii) it is designated as at FVPL as of the date of initial recognition.

However, for financial liabilities that are designated as at FVPL, the amount of change in the fair value of the financial

liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income,

unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create

or enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of liability is

recognized in profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are recognized in

other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to retained

earnings upon derecognition of the financial liability. Gains or losses on financial guarantee contracts issued by the Group

that are designated by the Group as at FVPL are recognized in profit or loss.

4) Financial liabilities measured subsequently at amortized cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading,

or (iii) designated as at FVPL as of the date of initial recognition, are measured subsequently at amortized cost using the

effective interest method. The effective interest method is a method of calculating the amortized cost of a financial liability

and of allocating interest expense over the relevant period.

5) Derecognition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or

have expired. The difference between the carrying amount of the financial liability derecognized and the consideration

paid and payable is recognized in profit or loss.

(24) Derivatives

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently

remeasured to their fair value at the end of each reporting period.

The resulting gain or loss is recognized in profit or loss

immediately, unless the derivative is designated and effective as a hedging instrument, in such case, the timing of the

recognition in profit or loss depends on the nature of the hedge relationship.

The Group designates certain derivatives as hedging instruments to hedge the risk of changes in fair value of a recognized

asset or liability or an unrecognized firm commitment (fair value hedges) and the risk of changes in cash flow of a highly

probable forecast transaction and the risk of changes in foreign currency exchange rates of firm commitment (cash flow

hedges).

Fair value hedges

The Group recognizes the changes in the fair value of derivatives that are designated and qualified as fair value hedges

are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability

that are attributable to the hedged risk. Hedge accounting is discontinued when the Group revokes the hedging relationship,

when the hedging instrument expires or is sold, terminated or exercised, or when it is no longer qualified for hedge

accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized

to profit or loss from that date.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is

recognized in other comprehensive income.

The gain or loss relating to the ineffective portion is recognized immediately

in profit or loss.

Amounts previously recognized in other comprehensive income and accumulated in equity are

reclassified to profit or loss in the periods when the hedged item affects profit or loss.

If the forecast transaction results

in the recognition of a non-financial asset or liability, the related gain and loss recognized in other comprehensive income

and accumulated in equity are transferred from equity to the initial cost of related non-financial asset or liability.

Cash flow hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging

instrument expires or is sold, terminated or exercised, or it no longer qualifies for the criteria of hedging.

Any gain or

loss accumulated in equity at that time remains in equity, and is recognized as profit or loss when the forecast transaction

occurs.

When the forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized

immediately in profit or loss.

(25) Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date, regardless of whether that price is directly observable or estimated using

another valuation technique.

In estimating the fair value of an asset or a liability, the Group takes into account the

characteristics of the asset or liability if market participants would take those characteristics into account when pricing

the asset or liability at the measurement date.

Fair value for measurement and/or disclosure purposes in these consolidated

financial statements is determined on such a basis, except for leasing transactions that are within the scope of K-IFRS

1116

Leases

, and measurements that have some similarities to fair value, but are not fair value, such as net realisable

value in K-IFRS 1002

Inventories

or value in use in K-IFRS 1036

Impairment of Assets

In addition, for financial reporting purposes, fair value measurements are categorized into Levels 1, 2 or 3, based on the

degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair

value measurement in its entirety, which are described in Note 20.

(26) Accounting Treatment related to the Emission Rights Cap and Trade Scheme

The Group classifies the emission rights as intangible assets.

The emission rights allowances received from the

government free of charge are measured at zero, while purchased emission rights allowances are measured at cost.

emission liability is recognized if the expected quantity of emission for the performing period does not exceed the

emission allowance in possession.

If the expected emissions exceed the emission allowances held, the emission liability

is measured and recognized based on the expected excess quantity of emissions and the market unit price of the emission

rights at the end of the reporting period.

(27) Significant accounting estimates and key sources of estimation uncertainties

In the application of the Group’s accounting policies, management is required to make judgments, estimates and

assumptions about the carrying amounts of assets and liabilities that cannot be identified from other sources.

The

estimation and assumptions are based on historical experience and other factors that are considered to be relevant.

Actual

results may be different from those estimations.

The estimates and underlying assumptions are continually evaluated.

Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only

that period or in the period of the revision and future periods if the revision affects both current and future periods.

Information about assumptions and estimation uncertainties at December 31, 2022 that have a significant risk of resulting

in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is as follows.

Impairment test for goodwill and non-financial assets

Determining whether goodwill and non-financial asset is impaired requires an estimation of the value in use of the CGU

to which goodwill has been allocated and value in use of non-financial assets.

The value in use calculation requires the

management to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to

calculate present value.

Warranty provision

The Group recognizes provisions for the warranties of its products as described in Note 2.(20).

The amounts are

recognized based on the best estimate of amounts necessary to settle the present and future warranty obligation.

Defined benefit plans

The Group operates defined retirement benefit plans.

Defined benefit obligations are determined at the end of each

reporting period using an actuarial valuation method that requires management assumptions on discount rates, rates of

expected future salary increases and mortality rates.

The characteristic of post-employment benefit plan that serves for

the long term period causes significant uncertainties when the post-employment benefit obligation is estimated.

Taxation

The Group recognizes current tax and deferred tax based on the best estimates of income tax effect to be charged in the

future as the result of operating activities until the end of the reporting period.

However, actual final income tax to be

charged in the future may differ from the relevant assets and liabilities recognized at the end of the reporting period and

the difference may affect income tax charged or credited, or deferred tax assets and liabilities in the period in which the

final income tax determined.

Fair value of financial instruments

The Group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair

value of certain type of financial instruments.

The Group makes judgements on the choice of various valuation methods

and assumptions based on the condition of the principal market at the end of the reporting period.

Measurement and useful lives of property, plant, equipment or intangible assets

When the Group acquires property, plant, equipment or intangible assets from a business combination, it is required to

estimate the fair value of the assets at the acquisition date and determine the useful lives of such assets for depreciation

and amortization.

Credit loss allowance

The Group sets credit loss allowance upon evaluation of impairment relating to account receivables and financial services

receivables as described in Note 2.(8).

The precision in loss allowance is based on the estimation of expected cash flow

and assumptions and variables of risk measurement model used for the estimation.

TRADE NOTES AND ACCOUNTS RECEIVABLE:

(1)

Trade notes and accounts receivable as of December 31, 2022 and December 31, 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Curren

on-curren

Curren

on-curren

(In millions of Korean Won)

Trade notes and accounts receivable

￦

4,298,915

￦

200,400

￦

3,190,030

￦

145,648

Loss allowance

(19,858)

(5,028)

(42,734)

(773)

Present value discount accounts

(15,591)

(7,718)

￦

4,279,057

￦

179,781

￦

3,147,296

￦

137,157

(2)

Aging analysis of trade notes and accounts receivable

As of December 31, 2022, aging analysis of total trade notes and accounts receivable that are past due, but not impaired

are as follows.

Description

ot due

Overdue

Within

90da

Overdue

Within

180days

More than

91da

Overdue

More than

181 da

Total

amounts

Amount of

impaired

receivables

(In millions of Korean Won)

Total trade note and

accounts receivable

￦

4,225,436

￦

192,913

￦

7,766

￦

73,200

￦

4,499,315

￦

24,886

As of December 31, 2021, aging analysis of total trade notes and accounts receivable that are past due, but not impaired

are as follows.

Description

ot due

Overdue

Within

90da

Overdue

Within

180days

More than

91da

Overdue

More than

181 da

Total

amounts

Amount of

impaired

receivables

(In millions of Korean Won)

Total trade note and

accounts receivable

￦

2,998,927

￦

249,201

￦

5,437

￦

82,113

￦

3,335,678

￦

43,507

(3)

Transferred trade notes and accounts receivable that are not derecognized

As of December 31, 2022 and December 31, 2021, total trade notes and accounts receivable (including inter-company

receivables within the Group) which the Group transferred to financial institutions but did not qualify for derecognition,

amount to

￦

2,123,379 million and

￦

3,059,551 million, respectively.

Cash and cash equivalents received as

consideration for the transfer are recognized as short-term borrowings due to the fact that the risks and rewards were not

transferred substantially.

(4)

Changes in loss allowance for the years ended December 31, 2022 and December 31, 2021 are as follows

Description

2022

2021

(In millions of Korean Won)

innin

of the

￦

43,507

￦

55,210

Impairment loss (reversal)

(940)

2,204

Write-off

(20,769)

(14,307)

Effect of forei

n exchan

e differences and others

3,088

400

End of the year

￦

24,886

￦

43,507

OTHER RECEIVABLES:

(1)

Other receivables as of December 31, 2022 and December 31, 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Curren

on-curren

Curren

on-curren

(In millions of Korean Won)

Accounts receivable

–

othe

s (*)

￦

3,143,232

￦

418,541

￦

2,785,799

￦

373,569

Due from

customers for contract wor

1,413,886

1,421,108

Lease and rental deposits

17,471

323,362

24,105

310,536

Deposits

12,854

40,740

7,289

33,469

Othe

5,631

38,407

3,546

23,594

Loss allowance

(134,385)

(20,877)

￦

4,458,689

￦

821,050

￦

4,220,970

￦

741,168

(*) As of December 31, 2022 and December 31, 2021, the Group recognized the reimbursement related to the warranty provisions as

a separate asset in the amount of

￦

1,045,159 million and

￦

1,091,859 million, respectively.

(2)

Changes in other allowance for the years ended December 31, 2022 and December 31, 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Beginning of the year

￦

20,877

￦

18,169

Impairment loss

130,650

517

Write-off

(971)

(871)

Effect of forei

n exchan

differences

(16,171)

3,062

End of the year

￦

134,385

￦

20,877

OTHER FINANCIAL ASSETS:

(1)

Other financial assets as of December 31, 2022 are as follows.

December 31, 2022

Description

Curren

on-curren

(In millions of Korean Won)

Financial assets measured at FVPL

￦

5,366,752

￦

343,594

Financial assets measured at FVOCI

66,044

2,773,537

Financial assets measured at amortized cos

25,404

12,494

Derivative assets that are effective hedging instruments

476,545

760,151

￦

5,934,745

￦

3,889,776

Other financial assets as of December 31, 2021 are as follows.

December 31, 2021

Description

Curren

on-curren

(In millions of Korean Won)

Financial assets measured at FVPL

￦

12,249,980

￦

222,120

Financial assets measured at FVOCI

25,150

2,886,373

Financial assets measured at amortized cos

18,466

8,729

Derivative assets that are effective hedging instruments

103,050

422,064

￦

12,396,646

￦

3,539,286

(2)

Financial assets measured at FVOCI as of December 31, 2022 and December 31, 2021 are as follows.

December 31,

2022

December 31,

2021

Description

Acquisition

cos

Book value

(In millions of Korean Won)

Debt instruments

￦

532,805

￦

499,193

￦

450,711

Equit

instruments (*)

2,769,268

2,340,388

2,460,812

￦

3,302,073

￦

2,839,581

￦

2,911,523

(*)

The Group makes an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an

investment in an equity instrument that is not held for trading at the date of initial recognition.

(3)

Equity instruments classified into financial assets measured at FVOCI as of December 31, 2022 and December

31, 2021 are as follows.

December 31,

2022

December 31,

2021

ame of the compan

Ownership

ercenta

Acquisition

cos

Book value

(%)

(In millions of Korean Won)

KT Corporation (*4)

4.69

￦

458,793

￦

414,412

￦

7,443

undai Steel Compan

(*1)

6.87

835,375

322,546

434,277

undai Glovis Co., Ltd.

4.88

210,688

299,359

314,922

ANI Technolo

ies Private Limited (OLA)

3.38

278,955

278,825

290,116

undai Oilbank Co., Ltd.

4.35

53,734

270,911

230,812

Grab Holdin

s Limite

1.11

442,922

175,010

362,508

HD H

undai (*3)

2.20

9,018

99,055

94,892

undai M Partners Co., Ltd.

9.29

9,888

17,151

13,954

ICE Information Service Co., Ltd.

2.25

3,312

16,664

24,587

undai Green Food Co., Ltd.

2.36

15,005

15,531

20,077

ICE Holdin

s Co., Ltd.

1.30

3,491

6,342

7,866

undai Asan Corporation

1.40

22,500

2,117

Korea Aerospace Industries, Ltd. (*2)

153,522

Others

425,587

422,465

503,719

￦

2,769,268

￦

2,340,388

￦

2,460,812

(*1)

The Group entered into a total return swap agreement to transfer 1,367,114 shares out of total 10,540,709 shares with a third

party.

(*2)

The Group entered into a total return swap agreement to transfer total shares with a third party. The Group has disposed of all

of its shares during the year ended December 31, 2022.

(*3)

During the year ended December 31, 2022, the name of company has been changed from Hyundai Heavy Industries Holdings

Co., Ltd. to HD Hyundai.

(*4)

During the year ended December 31, 2022, the Group acquired 12,011,143 shares in KT Corporation shares by exchange of

treasury stocks for the purpose of strengthening its business partnership with KT Corporation, and the shares acquired by the

Group are restricted from disposal for a certain period of time.

INVENTORIES:

Inventories as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Finished

oods

￦

7,824,079

￦

5,987,233

Merchandise

100,075

59,518

Semifinished

oods

666,083

711,155

Work in pro

ress

578,404

692,832

Raw materials

3,460,781

2,536,671

Supplies

351,994

315,871

Materials in transi

576,321

730,970

Othe

s (*1)

733,479

611,391

Total (*2)

￦

14,291,216

￦

11,645,641

(*1) As of December 31, 2022 and December 31, 2021, others include inventories provided by operating lease with repurchase

agreement in the amount of

￦

163,268 million and

￦

143,641 million, respectively.

(*2) As of December 31, 2022 and December 31, 2021, the Group recognized a valuation allowance in the amount of

￦

177,907

million and

￦

167,888 million, respectively.

OTHER ASSETS:

Other assets as of December 31, 2022 and December 31, 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Curren

on-curren

Curren

on-curren

(In millions of Korean Won)

Accrued income

￦

460,921

￦

531

￦

353,643

￦

716

Advanced pa

ments

882,136

130,743

662,919

Prepaid expenses

782,749

1,332,807

558,336

1,108,621

Prepaid value-added tax and others

514,747

86,374

506,955

81,947

￦

2,640,553

￦

1,550,455

￦

2,081,853

￦

1,191,284

NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE:

Non-current assets classified as held for sale and non-current liabilities classified as held for sale as of December 31, 2022

and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Lan

￦

6,676

￦

Buildin

and others

15,626

28,121

Total

￦

22,302

￦

28,121

on-current liabilities classified as held for sale

￦

5,365

￦

PROPERTY, PLANT AND EQUIPMENT:

(1)

Property, plant and equipment (“PP&E”) as of December 31, 2022 and 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Acquisition

cost

Accumulated

depreciation (*)

Book value

Acquisition

cost

Accumulated

depreciation (*)

Book value

(

In millions of Korean Won

)

Lan

￦

12,180,112

￦

12,180,112

￦

12,130,094

￦

12,130,094

Buildin

11,620,590

(

4,489,885

)

7,130,705

10,872,099

(

4,108,392

)

6,763,707

Structures

1,762,100

(911,214)

850,886

1,634,658

(820,896)

813,762

Machiner

and e

ment

18,215,786

(

11,632,625

)

6,583,161

17,542,258

(

10,884,908

)

6,657,350

Vehicles

615,152

(252,906)

362,246

473,053

(219,202)

253,851

Dies, molds and tools

15,387,346

(

11,258,981

)

4,128,365

14,310,816

(

9,899,714

)

4,411,102

Office equipment

2,090,753

(1,601,189)

489,564

1,926,607

(1,502,058)

424,549

Others

272,101

(

114,293

)

157,808

309,479

(

102,861

)

206,618

Construction in

ress

4,270,343

3,882,050

￦

66,414,283

￦

(30,261,093)

￦

36,153,190

￦

63,081,114

￦

(27,538,031)

￦

35,543,083

(*)

Accumulated impairment losses are included.

(2)

The changes in PP&E for the year ended December 31, 2022 are as follows.

Description

Beginning

of the yea

Acquisitions

Transfers

within PP&E

Disposals

Depreciation

Others (*)

End of

the yea

(In millions of Korean Won)

Lan

￦

12,130,094

￦

56,663

￦

(9,874)

￦

3,229

￦

12,180,112

Buildings

6,763,707

6,946

703,192

(28,181)

(357,212)

42,253

7,130,705

Structures

813,762

18,900

90,828

(5,258)

(77,357)

10,011

850,886

Machinery and

equipmen

6,657,350

32,604

986,035

(91,333)

(1,064,339)

62,844

6,583,161

Vehicles

253,851

109,262

137,739

(59,329)

(81,904)

2,627

362,246

Dies, molds

and tools

4,411,102

19,799

1,284,698

(65,801)

(1,403,168)

(118,265)

4,128,365

Office equipmen

424,549

55,507

187,658

(3,303)

(173,658)

(1,189)

489,564

Others

206,618

3,577

79,172

(288)

(17,647)

(113,624)

157,808

Construction-in

rogress

3,882,050

4,110,106

(3,525,985)

(1,192)

(194,636)

4,270,343

￦

35,543,083

￦

4,356,701

￦

(264,559)

￦

(3,175,285)

￦

(306,750)

￦

36,153,190

(*) Others include the effect of foreign exchange differences, transfers from or to other accounts, impairment loss of

￦

172,769

million for the CGU attributable to Hyundai Motor Manufacturing Rus LLC and others. The impairment test regarding CGU

attributable to Hyundai Motor Manufacturing Rus LLC was conducted due to continued suspension of production, and the recoverable

amount was based on its fair value less costs to sell (net fair value).

The changes in PP&E for the year ended December 31, 2021 are as follows.

Description

Beginning

of the yea

Acquisitions

Transfers

within PP&E

Disposals

Depreciation

Others (*)

End of

the yea

(In millions of Korean Won)

Lan

￦

12,047,003

￦

68,990

￦

39,283

￦

(1,303)

￦

(23,879)

￦

12,130,094

Buildings

6,355,852

39,130

626,269

(3,460)

(328,580)

74,496

6,763,707

Structures

762,248

27,774

103,295

(14,823)

(68,500)

3,768

813,762

Machinery and

equipmen

6,668,945

28,839

922,091

(31,931)

(1,010,082)

79,488

6,657,350

Vehicles

205,102

84,104

82,730

(51,161)

(61,111)

(5,813)

253,851

Dies, molds

and tools

3,837,278

27,708

1,792,988

(18,308)

(1,292,982)

64,418

4,411,102

Office equipmen

385,763

61,338

130,049

(1,919)

(157,611)

6,929

424,549

Others

75,623

8,451

147,235

(23,572)

(13,650)

12,531

206,618

Construction-in

rogress

3,754,415

4,036,440

(3,843,940)

(451)

(64,414)

3,882,050

￦

34,092,229

￦

4,382,774

￦

(146,928)

￦

(2,932,516)

￦

147,524

￦

35,543,083

(*) Others include the effect of foreign exchange differences, transfers from or to other accounts, impairment loss of

￦

44,499 million

allocated from the impairment of CGU attributable to Hyundai Truck & Bus(China) Co., Ltd. and others. The recoverable amount of

CGU attributable to Hyundai Truck & Bus(China) Co., Ltd. was based on its value in use or fair value less costs to disposal(net fair

value), and the discount rate applied to the measurement of value in use is 8.7%.

10.

INVESTMENT PROPERTY:

(1)

Investment property as of December 31, 2022 and December 31, 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Acquisition

cos

Accumulated

depreciation

Book value

Acquisition

cos

Accumulated

depreciation

Book value

(In millions of Korean Won)

Lan

￦

47,608

￦

47,608

￦

54,284

￦

54,284

Buildin

310,589

(223,852)

86,737

313,777

(221,919)

91,858

Structures

18,630

(8,525)

10,105

18,630

(8,116)

10,514

￦

376,827

￦

(232,377)

￦

144,450

￦

386,691

￦

(230,035)

￦

156,656

(2)

The changes in investment property for the year ended December 31, 2022 are as follows:

Description

Beginning

of the yea

Transfers(*)

Depreciation

Effect of foreign

exchange

differences

End of

the

(In millions of Korean Won)

Lan

￦

54,284

￦

(6,676)

￦

47,608

Buildin

91,858

201

(4,994)

(328)

86,737

Structures

10,514

(408)

(1)

10,105

￦

156,656

￦

(6,475)

￦

(5,402)

￦

(329)

￦

144,450

(*)

Transferred amount from Construction-in-progress.

The changes in Investment properties for the year ended December 31, 2021 are as follows.

Description

Beginning

of the yea

Disposals

Transfers(*)

Depreciation

Effect of foreign

exchange

differences

End of

the

(In millions of Korean Won)

Lan

￦

56,046

￦

(1,762)

￦

54,284

Buildin

94,000

1,537

(4,990)

1,311

91,858

Structures

10,921

(408)

10,514

￦

160,967

￦

(1,762)

￦

1,537

￦

(5,398)

￦

1,312

￦

156,656

(*)

Transferred amount from Construction-in-progress.

(3) The fair value of Investment properties as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Lan

￦

47,608

￦

54,284

Buildin

333,488

338,579

Structures

15,496

￦

396,592

￦

408,359

The fair value measurement of the Investment properties was performed by an independent third party.

The Group deems

the change in fair value from the fair value measurement performed at the initial recognition of the Investment properties

is not material.

The fair value of the Investment properties is classified as Level 3, based on the inputs used in the valuation techniques.

The fair value has been determined based on the cost approach and the market approach.

The cost approach measures

fair value as current replacement cost considering building structures and design, supplementary installation, depreciation

period.

(4) Income and expenses related to Investment properties for the years ended December 31, 2022 and 2021 are as

follows.

Description

2022

2021

(In millions of Korean Won)

Rental income

￦

43,967

￦

47,710

Operatin

and maintenance expenses

13,201

13,265

11.

INTANGIBLE ASSETS:

(1)

Intangible assets as of December 31, 2022 and December 31, 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Acquisition

cos

Accumulated

amortization (*)

Book value

Acquisition

cos

Accumulated

amortization (*)

Book value

(In millions of Korean Won)

Goodwill

￦

728,644

￦

(35,927)

￦

692,717

￦

409,570

￦

(35,807)

￦

373,763

Development

costs

10,679,258

(7,124,833)

3,554,425

10,374,450

(6,331,957)

4,042,493

Industrial

ropert

hts

515,017

(366,666)

148,351

477,280

(338,071)

139,209

Software

1,935,307

(1,280,424)

654,883

1,567,846

(1,089,990)

477,856

Others

874,134

(216,651)

657,483

821,000

(189,077)

631,923

Construction in

ress

415,983

(21,465)

394,518

197,278

(15,536)

181,742

￦

15,148,343

￦

(9,045,966)

￦

6,102,377

￦

13,847,424

￦

(8,000,438)

￦

5,846,986

(*)

Accumulated impairment losses are included.

(2)

The changes in intangible assets for the year ended December 31, 2022 are as follows.

Description

Beginning

of the

Internal

developments

External

acquisition

Transfers

within

intangible

assets

Disposals

(In millions of Korean Won)

Goodwill

￦

373,763

￦

Development Costs

4,042,493

1,176,423

26,653

45,890

(3,755)

Industrial propert

hts

139,209

505

33,875

(85)

Software

477,856

540

62,745

60,924

(23)

Others

631,923

40,277

45,521

(30,387)

Construction in pro

ress

181,742

18,941

388,696

(186,210)

￦

5,846,986

￦

1,195,997

￦

518,876

￦

(34,250)

(*1) Impairment losses include impairment of development costs due to the discontinued sales and development projects

and others

for the year ended December 31, 2022.

Description

Amortization

Impairment loss

/reversal (*1)

Others (*2)

End of

the

(In millions of Korean Won)

Goodwill

￦

318,954

￦

692,717

Development Costs

(1,596,985)

(159,009)

22,715

3,554,425

Industrial propert

hts

(29,057)

3,811

148,351

Software

(188,800)

(7,426)

249,067

654,883

Others

(52,093)

(1,841)

24,083

657,483

Construction in pro

ress

(502)

(8,149)

394,518

￦

(1,866,935)

￦

(168,778)

￦

610,481

￦

6,102,377

(*2) Others include the effect of foreign exchange differences, transfers from or to other accounts, changes in the scope of consolidation

and others.

The changes in intangible assets for the year ended December 31, 2021 are as follows.

Description

Beginning

of the

Internal

developments

External

acquisition

Transfers

within

intangible

assets

Disposals

(In millions of Korean Won)

Goodwill

￦

341,476

￦

Development Costs

4,277,671

1,291,676

31,287

41,147

(417)

Industrial propert

hts

245,400

951

28,076

(152)

Software

419,101

8,531

41,316

32,113

(110)

Others

251,263

1,150

21,771

(18,662)

Construction in pro

ress

142,656

11,124

171,226

(123,107)

￦

5,677,567

￦

1,311,395

￦

245,930

￦

(19,341)

Description

Amortization

Impairment loss

/reversal (*1)

Transfer to Non-

current assets

classified as held

for sale

Others (*2)

End of

the

(In millions of Korean Won)

Goodwill

￦

(76,805)

￦

109,092

￦

373,763

Development Costs

(1,406,713)

(192,213)

(3,496)

3,551

4,042,493

Industrial propert

hts

(24,076)

(112,278)

1,224

139,209

Software

(158,353)

(4)

135,262

477,856

Others

(28,681)

(162)

405,238

631,923

Construction in pro

ress

(12,853)

(7,304)

181,742

￦

(1,617,823)

￦

(394,147)

￦

(3,658)

￦

647,063

￦

5,846,986

(*1) Impairment losses include impairment of development costs due to the discontinued sales and development projects, impairment

loss of

￦

246,707 million allocated from the impairment of CGU attributable to Hyundai Truck & Bus(China) Co., Ltd. and others.

(*2) Others include the effect of foreign exchange differences, transfers from or to other accounts, changes in the scope of consolidation

and others.

(3) Development costs of intangible assets as of December 31, 2022 consist of as follows.

Description

Book value

Remainin

amortization period (*)

(In millions of Korean Won)

Automobile

Developing

￦

944,149

Amortizing

2,163,052

30 months

Powertrain

Developin

106,894

Amortizing

153,676

24 months

Others

Developin

Amortizing

186,654

46 months

￦

3,554,425

(*)

Since the remaining amortization period differs for each project, the weighted average remaining useful lives of the development

costs at the end of reporting period are disclosed.

Development costs of intangible assets as of December 31, 2021 consist of as follows.

Description

Book value

Remainin

amortization period (*)

(In millions of Korean Won)

Automobile

Developing

￦

1,176,530

Amortizing

2,378,965

32 months

Powertrain

Developin

142,567

Amortizing

171,828

25 months

Others

Developin

Amortizing

172,549

46 months

￦

4,042,493

(*)

Since the remaining amortization period differs for each project, the weighted average remaining useful lives of the development

costs at the end of reporting period are disclosed.

(4)

Research and development expenditures for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Development costs (intan

ible assets)

￦

1,203,076

￦

1,322,963

Research and development costs (*1)

2,133,497

1,774,934

Total (*2)

￦

3,336,573

￦

3,097,897

(*1)

Presented in manufacturing costs, administrative expenses.

(*2)

Amortization of development costs is not included.

(5)

Impairment test of goodwill

The allocation of goodwill amongst the Group’s CGUs as of December 31, 2022 and December 31, 2021 are as follows.

men

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Vehicle

￦

256,508

￦

253,204

Finance

482

Others

435,727

120,077

￦

692,717

￦

373,763

The recoverable amounts of the Group’s CGUs are measured as their value-in-use calculated based on cash flow

projections of financial budgets for the next five years approved by management.

The pre-tax discount rate applied

to the cash flow projections for the years ended December 31, 2022 and 2021, are 12.7% and 8.7% respectively.

Cash flow projections beyond the five-year period are extrapolated by using the estimated growth rate which does

not exceed the long-term average growth rate of the region and industry to which the CGU belongs.

No impairment

loss had been recognized for the year ended December 31, 2022. An impairment loss on goodwill of

￦

76,805

million was recognized with respect to the impairment of CGU attributable to Hyundai Truck & Bus(China) Co.,

Ltd. for the year ended December 31, 2021.

12.

LEASES (AS A LESSEE):

(1)

The changes in right-of-use assets for the year ended December 31, 2022 are as follows.

Description

Beginning

of the

Acquisitions

Disposals

Depreciation

Others(*)

End of the

(In millions of Korean Won)

Lan

￦

83,604

￦

175,406

￦

(392)

￦

(6,097)

￦

(623)

￦

251,898

Buildin

754,149

330,661

(59,061)

(197,807)

(8,589)

819,353

Vehicles

2,370

34,238

(507)

(6,258)

(3,250)

26,593

Others

100,703

18,482

(6,323)

(93,413)

19,449

￦

940,826

￦

558,787

￦

(59,960)

￦

(216,485)

￦

(105,875)

￦

1,117,293

(*)

Others include the effect of foreign exchange differences, changes in the scope of consolidation and others.

The changes in right-of-use assets for the year ended December 31, 2021 are as follows.

Description

Beginning

of the

Acquisitions

Disposals

Depreciation

Others(*)

End of the

(In millions of Korean Won)

Lan

￦

143,679

￦

13,863

￦

(457)

￦

(6,686)

￦

(66,795)

￦

83,604

Buildin

681,335

249,691

(22,786)

(184,173)

30,082

754,149

Vehicles

2,672

1,566

(78)

(1,845)

2,370

Others

8,638

97,885

(854)

(8,722)

3,756

100,703

￦

836,324

￦

363,005

￦

(24,175)

￦

(201,426)

￦

(32,902)

￦

940,826

(*)

Others include the effect of foreign exchange differences, changes in the scope of consolidation, impairment loss of

￦

46,910

million allocated from the impairment of CGU attributable to Hyundai Truck & Bus(China) Co., Ltd. and others.

(2)

Lease liabilities as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Undiscounted lease liabilities

￦

1,303,067

￦

1,150,757

Discounted lease liabilities

1,110,804

950,572

Curren

405,053

167,266

on-curren

705,751

783,306

(3)

Expenses recognized in relation to leases for the years ended December 31, 2022 and 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Interest on lease liabilities

￦

33,993

￦

25,126

Expenses in relation to leases of short-term and low-

value assets

20,174

20,907

13.

INVESTMENTS IN JOINT VENTURES AND ASSOCIATES:

(1)

Investments in joint ventures and associates as of December 31, 2022 are as follows.

ame of the compan

Nature of

usiness

Location

Ownership

ercenta

Book value

(%)

(In millions of

Korean Won)

Beijing Hyundai Qiche Financing

Compan

(BHAF) (*1,3)

Financin

China

53.00

￦

759,766

Beijing-Hyundai Motor Company

(BHMC) (*1)

Manufacturin

China

50.00

525,250

Hyundai WIA Automotive Engine

(Shandon

) Compan

(WAE)

Manufacturin

China

31.40

215,786

Motional AD LLC (*1)

R&D

USA

25.92

907,061

HMG Global LLC (*4)

New business

Investment &

mana

emen

USA

49.50

608,223

Boston D

namics AI Institute, LLC

R&D

USA

47.50

266,357

supernal, LLC (*1,5)

R&D

USA

44.44

178,564

Hyundai Capital Bank Europe GmbH

(HCBE)

Financin

German

49.00

508,110

HYUNDAI MOTOR GROUP

INNOVATION CENTER IN

SINGAPORE PTE. LTD.(HMGICS)

Manufacturin

Sin

apore

40.00

104,556

Kia Corporation

Manufacturin

Korea

33.88

13,251,475

Hyundai Engineering & Construction

Co., Ltd.

Construction

Korea

20.95

3,033,945

undai Trans

s Inc.

Manufacturin

Korea

41.13

1,157,462

undai WIA Corporation

Manufacturin

Korea

25.35

759,270

undai Autoever Corp.

IT service

Korea

31.59

449,994

undai Commercial Inc.

Financin

Korea

37.50

374,970

Hyundai Motor Securities Co., Ltd.

Securities

Brokera

Korea

25.43

332,624

Eukor Car Carriers Inc. (*2)

Transportation

Korea

12.00

269,261

Haevichi Hotels & Resorts Co., Ltd.

Hotelkeepin

Korea

41.90

96,303

Others

1,400,460

￦

25,199,437

(*1)

Each of the joint arrangements in which the Group retains joint control is structured through a separate entity and there are no

contractual terms stating that the parties retain rights to the assets and obligations for the liabilities relating to the joint

arrangement or other relevant facts and circumstances.

As a result, the Group considers that the parties that retain joint control

in the arrangement have rights to the net assets and classifies the joint arrangements as joint ventures.

Also, there are

restrictions, which require consent from the director who is designated by the other investors, for certain transactions, such as

payment of dividend.

(*2)

As the Group is considered to be able to exercise significant influence by representation on the board of directors of the

investee and other reasons, although the total ownership percentage is less than 20%, the investment is accounted for using the

equity method.

(*3)

The entity is categorized as a joint venture although the Group’s total ownership percentage is a majority share of 53%, because

the Group does not have control over the entity by virtue of an agreement with the other investors.

(*4)

During the year ended December 31, 2022, the Group completed the establishment of HMG Global LLC by

Contributing cash and all of Group’s interests in Boston Dynamics, Inc. to HMG Global LLC.

(*5)

During the year ended December 31, 2022, the classification of supernal, LLC was changed from a subsidiary to investment in

an associate due to loss of control. In addition, during the year ended December 31, 2021, the name of company was changed

from Genesis Air Mobility LLC to supernal, LLC.

Investments in joint ventures and associates as of December 31, 2021 are as follows.

ame of the compan

Nature of

usiness

Location

Ownership

ercenta

Book value

(%)

(In millions of

Korean Won)

Beijing Hyundai Qiche Financing

Compan

(BHAF) (*1,3)

Financin

China

53.00

￦

736,704

Beijing-Hyundai Motor Company

(BHMC) (*1)

Manufactu

China

50.00

345,950

Hyundai WIA Automotive Engine

(Shandon

) Compan

(WAE)

Manufacturin

China

31.40

245,868

Motional AD LLC (*1)

R&D

USA

25.97

1,025,263

Boston D

namics, Inc.

R&D

USA

30.00

414,634

Hyundai Capital Bank Europe GmbH

(HCBE)

Financin

Germany

49.00

498,050

Hyundai Motor Group INNOVATION

CENTER IN SINGAPORE PTE.

LTD.(HMGICS) (*6)

Manufacturin

Sin

apore

40.00

78,316

Kia Corporation (*4)

Manufacturin

Korea

33.88

11,620,132

Hyundai Engineering & Construction

Co., Ltd.

Construction

Korea

20.95

2,935,786

undai Trans

s Inc.

Manufacturin

Korea

41.13

1,085,858

undai WIA Corporation

Manufacturin

Korea

25.35

729,053

undai Autoever Corp. (*5)

IT service

Korea

31.59

410,935

undai Commercial Inc.

Financin

Korea

37.50

339,300

Hyundai Motor Securities Co., Ltd.

Securities

Brokera

Korea

25.43

314,532

Eukor Car Carriers Inc. (*2)

Transportation

Korea

12.00

186,489

Haevichi Hotels & Resorts Co., Ltd.

Hotelkeepin

Korea

41.90

98,894

Others

1,363,353

￦

22,429,117

(*1)

Each of the joint arrangements in which the Group retains joint control is structured through a separate entity and there are no

contractual terms stating that the parties retain rights to the assets and obligations for the liabilities relating to the joint

arrangement or other relevant facts and circumstances.

As a result, the Group considers that the parties that retain joint control

in the arrangement have rights to the net assets and classifies the joint arrangements as joint ventures.

Also, there are

restrictions, which require consent from the director who is designated by the other investors, for certain transactions, such as

payment of dividend.

(*2)

As the Group is considered to be able to exercise significant influence by representation on the board of directors of the

investee and other reasons, although the total ownership percentage is less than 20%, the investment is accounted for using the

equity method.

(*3)

The entity is categorized as a joint venture although the Group’s total ownership percentage is a majority share of 53%, because

the Group does not have control over the entity by virtue of an agreement with the other investors.

(*4)

During the year ended December 31, 2021, the name of the company was changed from Kia Motors Corporation to Kia

Corporation.

(*5)

During the year ended December 31, 2021, as the merger with Hyundai Autron Company Ltd., the subsidiary of the Company,

and HYUNDAI MNSOFT, Inc., the associate of the Company, was completed, the Group’s ownership percentage was changed

from 28.48% to 31.59%.

(*6)

During the year ended December 31, 2021, the name of the company was changed from HYUNDAI MOTOR SINGAPORE

PTE. LTD. (HMS) to Hyundai Motor Group Innovation Center in Singapore Pte. Ltd. (HMGICS).

(2)

The changes in investments in joint ventures and associates for the year ended December 31, 2022 are as follows.

ame of the compan

Beginning of

the

Acquisitions

(disposals)

Share of

profits (losses)

for the perio

Dividend

Others (*)

End of the

(In millions of Korean Won)

BHAF

￦

736,704

￦

44,478

￦

(21,416)

￦

759,766

BHMC

345,950

597,979

(394,495)

(24,184)

525,250

WAE

245,868

(25,336)

(4,746)

215,786

Motional AD LLC

1,025,263

(189,135)

70,933

907,061

HMG Global LLC

743,062

(5,483)

(129,356)

608,223

Boston Dynamics AI

Institute, LLC

283,366

(2,308)

(14,701)

266,357

supernal, LLC

194,596

(87,946)

71,914

178,564

Boston D

namics, Inc.

414,634

(37,483)

(377,151)

HCBE

498,050

15,337

(5,277)

508,110

HMGICS

78,316

29,528

(8,067)

4,779

104,556

Kia Corporation

11,620,132

1,906,772

(411,955)

136,526

13,251,475

Hyundai Engineering &

Construction Co., Ltd.

2,935,786

89,636

(13,996)

22,519

3,033,945

undai Trans

s Inc.

1,085,858

47,166

24,438

1,157,462

undai WIA Corporation

729,053

31,439

(4,826)

3,604

759,270

undai Autoever Corp.

410,935

39,961

(6,065)

5,163

449,994

undai Commercial Inc.

339,300

100,212

(20,000)

(44,542)

374,970

Hyundai Motor Securities

Co., Ltd.

314,532

22,153

(6,453)

2,392

332,624

Eukor Car Carriers Inc.

186,489

82,923

(7,392)

7,241

269,261

Haevichi Hotels & Resorts

Co., Ltd.

98,894

(2,601)

96,303

Others

1,363,353

152,952

8,554

(16,349)

(108,050)

1,400,460

￦

22,429,117

￦

2,001,483

￦

1,635,777

￦

(487,036)

￦

(379,904)

￦

25,199,437

(*)

Others consist of changes in accumulated other comprehensive income (loss) and others.

The changes in investments in joint ventures and associates for the year ended December 31, 2021 are as follows.

ame of the compan

Beginning of

the

Acquisitions

(disposals)

Share of

profits (losses)

for the perio

Dividend

Others (*1)

End of the

(In millions of Korean Won)

BHAF

￦

627,895

￦

50,724

￦

(15,880)

￦

73,965

￦

736,704

BHMC

779,958

(502,344)

68,336

345,950

WAE

224,979

(3,432)

24,321

245,868

Motional AD LLC

1,053,282

(122,871)

94,852

1,025,263

Boston Dynamics, Inc.

(*2)

431,882

(36,010)

18,762

414,634

HCBE

495,999

(99)

2,150

498,050

HMGICS

51,766

26,202

(3,300)

3,648

78,316

Kia Corporation

9,972,824

1,601,473

(137,318)

183,153

11,620,132

Hyundai Engineering &

Construction Co., Ltd.

2,835,399

82,421

(13,996)

31,962

2,935,786

undai Trans

s Inc.

1,017,906

39,223

28,729

1,085,858

undai WIA Corporation

694,991

16,637

(4,826)

22,251

729,053

undai Autoever Corp.

158,073

24,876

(4,485)

232,471

410,935

undai Commercial Inc.

261,601

67,187

(3,750)

14,262

339,300

Hyundai Motor Securities

Co., Ltd.

310,472

23,027

(5,444)

(13,523)

314,532

Eukor Car Carriers Inc.

150,503

22,457

13,529

186,489

Haevichi Hotels & Resorts

Co., Ltd.

97,655

980

259

98,894

Others

1,191,957

182,786

17,642

(12,344)

(16,688)

1,363,353

￦

19,925,260

￦

640,870

￦

1,278,591

￦

(198,043)

￦

782,439

￦

22,429,117

(*1) Others consist of changes in accumulated other comprehensive income (loss) and others.

(*2) Share acquisition has been completed in the year ended December 31, 2021, and the acquisition cost is measured as the cash paid

during the years ended December 31, 2022 and 2021, and the value of put option owned by other investors.

(3)

Summarized financial information of the Group’s major joint ventures and associates as of and for the year

ended December 31, 2022 is as follows.

ame of the compan

Current

assets

Non-current

assets

Current

liabilities

Non-current

liabilities

(In millions of Korean Won)

BHAF (*)

￦

4,044,066

￦

2,610,546

￦

BHMC

3,042,267

3,120,431

4,715,086

399,063

WAE

537,909

457,303

338,319

5,551

Motional AD LLC

646,160

3,187,411

142,518

89,824

HMG Global LLC

799,047

1,384,220

88,391

320,996

Boston D

namics AI Institute, LLC

556,273

53,152

9,072

39,876

supernal, LLC

338,831

216,123

42,290

108,565

HCBE (*)

9,448,406

8,405,237

HMGICS

118,876

370,889

18,593

216,915

Kia Corporation

34,147,147

39,563,818

25,377,803

8,990,081

Hyundai Engineering &

Construction Co., Ltd.

15,516,745

5,394,963

8,757,397

2,230,034

undai Trans

s Inc.

4,311,914

3,209,159

3,147,190

1,499,678

undai WIA Corporation

4,267,463

3,278,988

2,410,435

1,402,365

undai Autoever Corp.

1,695,856

923,580

883,698

245,358

undai Commercial Inc. (*)

11,170,366

9,774,127

undai Motor Securities Co., Ltd. (*)

10,233,054

9,008,411

Eukor Car Carriers Inc.

1,026,513

3,312,611

609,827

1,505,122

Haevichi Hotels & Resorts Co., Ltd.

43,919

412,477

253,312

34,862

ame of the compan

Sales

Profit (loss) for

the period from

continuing

operations

Other

comprehensive

income (loss)

Total

comprehensive

income (loss)

(In millions of Korean Won)

BHAF (*)

￦

362,978

￦

83,920

￦

83,920

BHMC

4,900,315

(821,204)

(821,204))

WAE

501,436

(71,164)

Motional AD LLC

1,207

(751,726)

(6,314)

(758,040)

HMG Global LLC

21,388

(63,993)

Boston D

namics AI Institute, LLC

(4,858)

supernal, LLC

(195,567)

HCBE (*)

971,654

32,144

16,302

48,446

HMGICS

12,190

(20,168)

Kia Corporation

86,559,029

5,408,976

227,095

5,636,071

Hyundai Engineering &

Construction Co., Ltd.

21,239,082

470,876

144,153

615,029

undai Trans

s Inc.

10,256,254

123,483

64,705

188,188

undai WIA Corporation

8,207,614

43,482

9,136

52,618

undai Autoever Corp.

2,754,508

116,170

17,586

133,756

undai Commercial Inc. (*)

588,167

266,640

(116,056)

150,584

undai Motor Securities Co., Ltd. (*)

1,186,029

87,102

5,147

92,249

Eukor Car Carriers Inc.

2,865,427

668,062

43,489

711,551

Haevichi Hotels & Resorts Co., Ltd.

152,860

(5,485)

(5,476)

(*)

The companies operate financial business and their total assets (liabilities) are included in current assets (liabilities) as the companies

do not distinguish current and non-current portion in their separate financial statements.

Summarized financial information of the Group’s major joint ventures and associates as of and for the year

ended December 31, 2021 is as follows.

ame of the compan

Current

assets

Non-current

assets

Current

liabilities

Non-current

liabilities

(In millions of Korean Won)

BHAF (*)

￦

5,648,345

￦

4,258,337

￦

BHMC

2,877,226

3,897,225

5,047,580

984,476

WAE

648,858

530,099

185,159

255,961

Motional AD LLC

630,770

3,603,314

97,631

105,139

Boston D

namics, Inc.

117,854

250,999

55,254

79,823

HCBE (*)

6,910,165

5,916,354

HMGICS

23,970

166,297

1,612

Kia Corporation

29,205,483

37,644,514

21,562,636

10,374,805

Hyundai Engineering &

Construction Co., Ltd.

14,555,535

5,091,172

7,616,041

2,594,756

undai Trans

s Inc.

3,592,986

3,043,732

2,164,191

1,786,510

undai WIA Corporation

4,156,485

3,593,022

2,126,275

1,927,968

undai Autoever Corp.

1,471,052

875,071

721,374

248,927

undai Commercial Inc. (*)

10,001,066

8,699,018

undai Motor Securities Co., Ltd. (*)

8,806,128

7,645,418

Eukor Car Carriers Inc.

534,016

3,169,325

654,912

1,467,448

Haevichi Hotels & Resorts Co., Ltd.

44,922

409,187

235,954

44,458

ame of the compan

Sales

Profit (loss) for

the period from

continuing

operations

Other

comprehensive

income (loss)

Total

comprehensive

income (loss)

(In millions of Korean Won)

BHAF (*)

￦

423,416

￦

95,703

￦

95,703

BHMC

6,240,989

(1,012,933)

WAE

797,685

(4,226)

Motional AD LLC

949

(516,204)

(5,025)

(521,229)

Boston D

namics, Inc.

66,779

(196,950)

HCBE (*)

711,616

(325)

4,241

3,916

HMGICS

(8,251)

Kia Corporation

69,862,366

4,760,311

664,223

5,424,534

Hyundai Engineering &

Construction Co., Ltd.

18,065,534

549,501

168,103

717,604

undai Trans

s Inc.

8,143,951

90,623

66,409

157,032

undai WIA Corporation

7,527,739

56,071

131,926

187,997

undai Autoever Corp.

2,070,382

71,368

13,648

85,016

undai Commercial Inc. (*)

482,087

185,303

(31,808)

153,495

undai Motor Securities Co., Ltd. (*)

853,770

117,749

913

118,662

Eukor Car Carriers Inc.

1,894,623

192,229

137,672

329,901

Haevichi Hotels & Resorts Co., Ltd.

116,466

2,063

2,079

(*)

The companies operate financial business and their total assets (liabilities) are included in current assets (liabilities) as the companies

do not distinguish current and non-current portion in their separate financial statements.

(4)

Summarized additional financial information of the Group’s major joint ventures as of and for the year

ended December 31, 2022 is as follows.

Name of the

compan

Cash and

cash

equivalents

Current

financial

liabilities

Non-current

financial

liabilities

Depreciation

and

amortization

Interest

income

Interest

expenses

Income tax

expense

(In millions of Korean Won)

BHAF(*)

￦

1,023,368

￦

2,385,681

￦

13,926

￦

341,357

￦

128,264

￦

32,245

BHMC

1,887,932

606,105

161,500

570,749

18,263

51,436

60,112

Motional AD

LLC

71,075

16,062

62,753

87,887

5,760

6,027

supernal, LLC

333,184

8,305

589

5,983

(*)

Operating finance business of which total assets (liabilities) are included in current financial liabilities as BHAF does not distinguish

current and non-current portion in its separate financial statements.

Summarized additional financial information of the Group’s major joint ventures as of and for the year ended December

31, 2021 is as follows.

Name of the

compan

Cash and

cash

equivalents

Current

financial

liabilities

Non-current

financial

liabilities

Depreciation

and

amortization

Interest

income

Interest

expenses

Income tax

expense

(In millions of Korean Won)

BHAF(*)

￦

860,234

￦

3,993,580

￦

8,155

￦

419,195

￦

175,403

￦

32,648

BHMC

975,177

379,970

723,688

481,351

11,599

81,288

2,665

Motional AD

LLC

188,571

14,407

71,982

73,807

3,642

(7,875)

(*)

Operating finance business of which total assets (liabilities) are included in current financial liabilities as BHAF does not distinguish

current and non-current portion in its separate financial statements.

(5)

Reconciliation of the Group’s share of net assets of the Group’s major joint ventures and associates to their

carrying amounts as of December 31, 2022 is as follows.

ame of the compan

Group’s share of

net assets

Goodwill

Unrealized

profit (loss) and

others

Carrying

amounts

(In millions of Korean Won)

BHAF

￦

759,766

￦

759,766

BHMC

551,378

(26,128)

525,250

WAE (*)

207,938

7,809

215,786

Motional AD LLC

922,942

(15,881)

907,061

HMG Global LLC

608,223

Boston D

namics AI Institute, LLC

266,227

130

266,357

supernal, LLC

178,571

(7)

178,564

HCBE

497,892

22,341

(12,123)

508,110

HMGICS

101,702

2,854

104,556

Kia Corporation

13,124,472

197,089

(70,086)

13,251,475

Hyundai Engineering & Construction

Co., Ltd. (*)

2,302,451

731,362

132

3,033,945

undai Trans

s Inc.

1,142,960

14,502

1,157,462

undai WIA Corporation

854,377

(95,107)

759,270

undai Autoever Corp. (*)

391,073

58,822

449,994

undai Commercial Inc.

374,970

undai Motor Securities Co., Ltd.

291,823

40,052

749

332,624

Eukor Car Carriers Inc.

268,999

262

269,261

Haevichi Hotels & Resorts Co., Ltd. (*)

92,727

3,576

96,303

(*)

The difference between the carrying amount and the fair value of the investee’s identifiable assets and liabilities as of the acquisition

date is included in the amount of net assets.

Reconciliation of the Group’s share of net assets of the Group’s major joint ventures and associates to their carrying

amounts as of December 31, 2021 is as follows.

ame of the compan

Group’s share

net assets

Goodwill

Unrealized

profit (loss) and

others

Carrying

amounts

(In millions of Korean Won)

BHAF

￦

736,704

￦

736,704

BHMC

371,198

(25,248)

345,950

WAE (*)

238,021

7,809

245,868

Motional AD LLC

1,047,834

(22,571)

1,025,263

Boston D

namics, Inc. (*)

199,325

209,428

5,881

414,634

HCBE

474,523

22,341

1,186

498,050

HMGICS

75,462

2,854

78,316

Kia Corporation

11,505,153

197,089

(82,110)

11,620,132

Hyundai Engineering & Construction

Co., Ltd. (*)

2,204,424

731,362

2,935,786

undai Trans

s Inc.

1,070,931

14,927

1,085,858

undai WIA Corporation

823,381

(94,328)

729,053

undai Autoever Corp. (*)

352,013

58,822

100

410,935

undai Commercial Inc.

339,300

undai Motor Securities Co., Ltd.

275,563

40,052

(1,083)

314,532

Eukor Car Carriers Inc.

186,227

262

186,489

Haevichi Hotels & Resorts Co., Ltd. (*)

95,318

3,576

98,894

(*)

The difference between the carrying amount and the fair value of the investee’s identifiable assets and liabilities as of the acquisition

date is included in the amount of net assets.

(6)

The market price of major listed equity securities as of December 31, 2022 is as follows.

ame of the compan

Price per share

Total number of

Market value

(In millions of Korean Won, except price per share)

Kia Corporation

￦

59,300

137,318,251

￦

8,142,972

undai Autoever Corp.

95,500

8,664,334

827,444

undai En

ineerin

& Construction Co., Ltd.

34,900

23,327,400

814,126

undai WIA Corporation

49,450

6,893,596

340,888

undai Motor Securities Co., Ltd.

9,090

8,065,595

73,316

14.

FINANCIAL SERVICES RECEIVABLES:

(1)

Financial services receivables as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31,

2022

December 31,

2021

(In millions of Korean Won)

Loans

￦

69,298,391

￦

61,959,509

Card receivables

21,018,287

18,728,408

Financial lease receivables

2,060,971

2,123,472

Others

20,761

35,291

92,398,410

82,846,680

Loss allowance

(1,726,916)

(1,551,987)

Loan ori

ination fee

(261,084)

(231,762)

Present value discount accounts

(46,564)

(33,799)

￦

90,363,846

￦

81,029,132

(2) Transfer of financial services receivables

As of December 31, 2022 and 2021, the Group has issued asset-backed securities with loan receivables and credit card

receivables as underlying assets and related asset-backed securities have the right of recourse.

As of December 31, 2022,

the carrying amount of financial assets that were transferred but not derecognized (including inter-company bonds)

amounted to

￦

31,838,127 million and its fair value is

￦

30,847,083 million. The carrying amount of related liabilities is

￦

22,795,844 million and its fair value is

￦

22,263,492 million.

As a result, the fair value of net position is

￦

8,583,591

million. As of December 31, 2021, the carrying amount of financial assets that were transferred but not derecognized

(including inter-company bonds) amounted to

￦

26,292,997 million and its fair value is

￦

26,213,213 million. The

carrying amount of related liabilities is

￦

19,352,363 million and its fair value is

￦

19,225,190 million.

As a result, the

fair value of net position is

￦

6,988,023 million.

(3)

The changes in loss allowance of financial services receivables for the year ended December 31, 2022 are as follows.

Loan Obli

ations

12-Month

expected

credit losses

Lifetime expected credit losses

Description

ot Impaire

Impaire

Total loan

obligations

(In millions of Korean Won)

innin

of the

￦

449,207

￦

316,425

￦

204,034

￦

969,666

Transfer to 12-Month expected

credit losses

69,360

(65,956)

(3,404)

Transfer to lifetime expected

credit losses

(54,196)

58,198

(4,002)

Transfer to credit-impaired

financial assets

(2,434)

(7,225)

9,659

Impairment loss (reversal)

(139,481)

435,731

164,836

461,086

Collection (write-off)

(169)

(241,816)

(132,234)

(374,219)

Disposals and others

(2)

(4,794)

(4,796)

Effect of foreign exchange

differences

22,750

6,062

28,874

End of the

￦

345,035

￦

501,419

￦

234,157

￦

1,080,611

Card receivables

12-Month

expected

credit losses

Lifetime expected credit losses

Description

ot Impaire

Impaire

Total card

receivables

(In millions of Korean Won)

innin

of the

￦

195,709

￦

163,391

￦

154,600

￦

513,700

Transfer to 12-Month expected

credit losses

49,247

(49,118)

(129)

Transfer to lifetime expected

credit losses

(26,980)

27,145

(165)

Transfer to credit-impaired

financial assets

(93,623)

(70,901)

164,524

Impairment loss (reversal)

65,488

149,053

217,342

431,883

Collection (write-off)

(342,013)

Disposals and others

(15,368)

(15,367)

Effect of foreign exchange

differences

End of the

￦

189,841

￦

219,571

￦

178,791

￦

588,203

Others

Total

Allowances

12-Month

expected

credit losses

Lifetime expected credit losses

Description

ot Impaire

Impaire

Total others

(In millions of Korean Won)

innin

of the

￦

14,299

￦

8,119

￦

46,203

￦

68,621

￦

1,551,987

Transfer to 12-Month expected

credit losses

4,326

(1,737)

(2,590)

(1)

Transfer to lifetime expected

credit losses

(1,550)

1,974

(424)

Transfer to credit-impaired

financial assets

(100)

(237)

337

Impairment loss (reversal)

(3,639)

855

8,315

5,531

898,500

Collection (write-off)

(16,049)

(732,281)

Disposals and others

(20,163)

Effect of foreign exchange

differences

28,874

End of the

￦

13,336

￦

8,974

￦

35,792

￦

58,102

￦

1,726,916

The changes in allowance for doubtful accounts of financial services receivables for the year ended December 31,

2021 are as follows.

Loan Obli

ations

12-Month

expected

credit losses

Lifetime expected credit losses

Description

ot Impaire

Impaire

Total loan

obligations

(In millions of Korean Won)

innin

of the

￦

441,192

￦

300,082

￦

315,136

￦

1,056,410

Transfer to 12-Month expected

credit losses

71,703

(67,049)

(4,654)

Transfer to lifetime expected

credit losses

(57,656)

61,633

(3,977)

Transfer to credit-impaired

financial assets

(2,773)

(5,866)

8,639

Impairment loss (reversal)

(27,338)

128,769

135,156

236,587

Collection (write-off)

(114,436)

(246,714)

(361,100)

Disposals and others

234

Effect of foreign exchange

differences

24,029

13,292

214

37,535

End of the

￦

449,207

￦

316,425

￦

204,034

￦

969,666

Card receivables

12-Month

expected

credit losses

Lifetime expected credit losses

Description

ot Impaire

Impaire

Total card

receivables

(In millions of Korean Won)

innin

of the

￦

186,440

￦

142,390

￦

225,298

￦

554,128

Transfer to 12-Month expected

credit losses

49,439

(49,287)

(152)

Transfer to lifetime expected

credit losses

(14,871)

15,045

(174)

Transfer to credit-impaired

financial assets

(117,994)

(56,471)

174,465

Impairment loss (reversal)

120,496

111,716

99,160

331,372

Collection (write-off)

(332,434)

Disposals and others

(27,801)

(2)

(11,563)

(39,366)

Effect of foreign exchange

differences

End of the

￦

195,709

￦

163,391

￦

154,600

￦

513,700

Others

Total

Allowances

12-Month

expected

credit losses

Lifetime expected credit losses

Description

ot Impaire

Impaire

Total others

(In millions of Korean Won)

innin

of the

￦

18,032

￦

6,368

￦

50,291

￦

74,691

￦

1,685,229

Transfer to 12-Month expected

credit losses

3,649

(1,461)

(2,188)

Transfer to lifetime expected

credit losses

(1,879)

2,388

(509)

Transfer to credit-impaired

financial assets

(144)

(233)

377

Impairmen

loss (reversal)

(5,359)

1,057

(1,449)

(5,751)

562,208

Collection (write-off)

(319)

(693,853)

Disposals and others

(39,132)

Effect of foreign exchange

differences

37,535

End of the

￦

14,299

￦

8,119

￦

46,203

￦

68,621

￦

1,551,987

(4)

Gross investments in financial leases and their present value of minimum lease receipts as of December 31, 2022

and December 31, 2021 are as follows.

Decembe

31, 2022

December 31, 2021

Description

Gross

investments

in financial

leases

Present value

of minimum

lease payment

receivable

Gross

investments

in financial

leases

Present value

of minimum

lease payment

receivable

(In millions of Korean Won)

ot later than one

￦

868,890

￦

758,724

￦

888,358

￦

788,739

Later than one year and not later

than five

ears

1,423,828

1,293,495

1,421,468

1,324,645

Later than five

ears

5,215

4,988

6,475

6,236

￦

2,297,933

￦

2,057,207

￦

2,316,301

￦

2,119,620

(5)

Unearned interest income of financial leases as of December 31, 2022 and December 31, 2021 are as follows.

Description

Decembe

31, 2022

December 31, 2021

(In millions of Korean Won)

Gross investments in financial lease

￦

2,297,933

￦

2,316,301

et lease investments:

Present value of minimum lease pa

ment receivable

2,057,207

2,119,620

Present value of un

uaranteed residual value

3,764

3,852

2,060,971

2,123,472

Unearned interest income

￦

236,962

￦

192,829

15.

INVESTMENTS IN OPERATING LEASES (AS A LESSOR):

(1)

Investments in operating leases as of December 31, 2022 and December 31, 2021 are as follows.

Description

Decembe

31, 2022

December 31, 2021

(In millions of Korean Won)

Acquisition

cos

￦

32,090,728

￦

29,980,884

Accumulated depreciation

(4,262,026)

(3,477,632)

Accumulated impairment loss

(147,168)

(175,256)

￦

27,681,534

￦

26,327,996

(2) Future minimum lease payment receivable related to investments in operating leases as of December 31, 2022 and

December 31, 2021 is as follows.

Description

Decembe

31, 2022

December 31, 2021

(In millions of Korean Won)

ot later than one

￦

5,001,104

￦

5,323,499

Later than one year and not later

than five

ears

5,906,720

5,744,918

Later than five

ears

111

￦

10,907,935

￦

11,068,494

16.

BORROWINGS AND DEBENTURES:

(1)

Short-term borrowings as of December 31, 2022 and December 31, 2021 are as follows.

Description

Lende

Annual

interest rate

December 31,

2022

December 31,

2021

(%)

(In millions of Korean Won)

Overdrafts

Citi Bank and others

1.75~3.98

￦

62,101

￦

456,044

General borrowings

Korea Development Bank

and others

1.93~14.60

5,277,609

3,994,073

Borrowings collateralized

trade receivables

Hana Ban

and others

0.00001~12.54

2,123,379

3,059,551

Banker’s Usance

Hana Ban

and others

0.15~9.20

705,155

786,755

Commercial pape

Shinhan Ban

and others

3.10~7.10

2,898,236

4,791,413

Credit facilities

Korea Development Ban

2.54

300,000

￦

11,366,480

￦

13,087,836

(2) Long-term debt as of December 31, 2022 and December 31, 2021 are as follows.

Description

Lende

Annual

interest rate

December 31,

2022

December 31,

2021

(%)

(In millions of Korean Won)

General borrowin

Mizuho Bank and others

0.12~16.80

￦

8,909,156

￦

9,738,949

Credit facilities

H Bank and others

5.85~9.13

40,200

540,600

Commercial paper

BNK Investment & Securities

and others

1.19~4.74

2,900,000

1,650,000

Asse

acked securities

HSBC and others

1.65~5.20

6,377,616

4,136,643

Others(*)

NH Investment & Securities

and others

68,903

392,032

18,295,875

16,458,224

Less: present value discounts

(77,686)

(88,059)

Less: current maturities

(5,933,040)

(5,702,434)

￦

12,285,149

￦

10,667,731

(*) The Group transferred a portion of its voting shares to a third party with the total revenue swap agreement. However, the Group still

recognizes it as the financial asset because the Group still owns the majority of the risks and rewards of ownership of the transferred

shares. Also, the Group recognized the amount received from disposal as borrowings.

(3) Debentures as of December 31, 2022 and December 31, 2021 are as follows.

Description

Latest

maturit

date

Annual

interest rate

December 31,

2022

December 31,

2021

(%)

(In millions of Korean Won)

on-

uaranteed public debentures

March 29, 2032

0.96~6.63

￦

33,979,495

￦

31,533,051

on-

uaranteed private debentures

April 8, 2030

0.80~6.38

25,971,468

27,604,469

Asse

acked securities

October 16, 2028

0.19~5.52

22,801,451

19,359,999

82,752,414

78,497,519

Less: discount on debentures

(151,263)

(162,242)

Less: current maturities

(19,641,091)

(14,876,468)

￦

62,960,060

￦

63,458,809

17.

PROVISIONS:

(1) Provisions as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31,

2022

December 31,

2021

(In millions of Korean Won)

Warranty

￦

10,399,527

￦

9,048,185

Other lon

-term emplo

ee benefits

598,637

676,432

Others

1,432,417

1,154,167

￦

12,430,581

￦

10,878,784

(2) The changes in provisions for the year ended December 31, 2022 are as follows.

Description

Warrant

(*)

Other long-term

emplo

ee benefits

Others

(In millions of Korean Won)

Beginning of the year

￦

9,048,185

￦

676,432

￦

1,154,167

Char

4,347,523

3,900

953,430

Utilized

(3,133,544)

(83,682)

(645,750)

Effect of foreign exchange differences

and others

137,363

1,987

(29,430)

End of the year

￦

10,399,527

￦

598,637

￦

1,432,417

(*)

During the year ended December 31, 2022, the Group updated the measurement of warranty provisions related to the recall of

theta 2 and other engines to reflect of new information and a longer period of historical claim data.

The changes in provisions for the year ended December 31, 2021 are as follows.

Description

Warrant

Other long-term

emplo

ee benefits

Others

(In millions of Korean Won)

Beginning of the year

￦

8,514,173

￦

729,996

￦

1,126,719

Char

2,900,638

42,595

680,707

Utilized

(2,551,716)

(96,713)

(631,469)

Effect of foreign exchange differences

and others

185,090

554

(21,790)

End of the year

￦

9,048,185

￦

676,432

￦

1,154,167

18.

OTHER FINANCIAL LIABILITIES:

(1)

Other financial liabilities as of December 31, 2022 are as follows.

December 31, 2022

Description

Curren

on-curren

(In millions of Korean Won)

Financial liabilities measured at FVPL

￦

10,053

￦

174,386

Derivative liabilities that are effective hed

instruments

88,832

86,464

Financial Liabilities measured at amortized cos

259

1,668

￦

99,144

￦

262,518

(2)

Other financial liabilities as of December 31, 2021 are as follows.

December 31, 2021

Description

Curren

on-curren

(In millions of Korean Won)

Financial liabilities measured at FVPL

￦

674

￦

53,427

Derivative liabilities that are effective hed

instruments

54,365

32,705

Financial Liabilities measured at amortized cos

148

1,126

￦

55,187

￦

87,258

19.

OTHER LIABILITIES:

Other liabilities as of December 31, 2022 and December 31, 2021 are as follows.

December 31, 2022

December 31, 2021

Description

Curren

on-curren

Curren

on-curren

(In millions of Korean Won)

Advances receive

￦

1,464,339

￦

67,776

￦

1,235,937

￦

42,482

Withholdin

1,056,483

223,568

968,318

197,714

Accrued expenses

3,351,822

2,851,174

Unearned income

1,090,242

3,150,126

864,536

2,356,667

Due to customers for contrac

wor

1,217,052

902,124

Others

420,303

810,795

618,031

747,755

￦

8,600,241

￦

4,252,265

￦

7,440,120

￦

3,344,618

20.

FINANCIAL INSTRUMENTS:

(1)

Financial assets by categories as of December 31, 2022 are as follows.

Description

Financial

assets

measured at

FVPL

Financial assets

measured at

amortized cos

Financial assets

measured at

FVOCI

Derivative assets

that are effective

hedging

instruments

Book value

Fair value

(In millions of Korean Won)

Cash and

cash

equivalents

￦

20,864,879

￦

20,864,879

￦

20,864,879

Short-term and

long-

term financial

instruments

5,887,154

Trade notes and

accounts

receivable

4,458,838

Other

receivables

2,378,968

Other financial

assets

5,710,346

37,898

2,839,581

1,236,696

9,824,521

Other assets

27,960

434,829

462,789

Financial

services

receivables

90,363,846

86,705,579

￦

5,738,306

￦

124,426,412

￦

2,839,581

￦

1,236,696

￦

134,240,995

￦

130,582,728

Financial assets by categories as of December 31, 2021 are as follows.

Description

Financial

assets

measured at

FVPL

Financial assets

measured at

amortized cos

Financial

assets

measured at

FVOCI

Derivative

assets that

are effective

hedging

instruments

Book value

Fair value

(In millions of Korean Won)

Cash and

cash equivalents

￦

12,795,554

￦

12,795,554

￦

12,795,554

Short-term and long-

term financial

instruments

7,255,743

Trade notes and

accounts receivable

3,284,453

Other receivables

2,076,803

Other financial assets

12,472,100

27,195

2,911,523

525,114

15,935,932

Other assets

23,568

331,353

354,921

Financial services

receivables

81,029,132

81,059,639

￦

12,495,668

￦

106,800,233

￦

2,911,523

￦

525,114

￦

122,732,538

￦

122,763,045

(2)

Financial liabilities by categories as of December 31, 2022 are as follows.

Description

Financial liabilities

measured at FVPL

Financial liabilities

measured at

amortized cos

Derivative liabilities

that are effective

hed

instruments

Book value

Fair value

(In millions of Korean Won)

Trade notes and

accounts pa

able

￦

10,797,065

￦

10,797,065

￦

10,797,065

Other pa

ables

7,292,508

Borrowings and

debentures

27,239

112,158,581

112,185,820

108,603,134

Other financial liabilities

184,439

1,927

175,296

361,662

Lease liabilities

1,110,804

Other liabilities

2,960,053

￦

211,678

￦

134,320,938

￦

175,296

￦

134,707,912

￦

131,125,226

Financial liabilities by categories as of December 31, 2021 are as follows.

Description

Financial liabilities

measured at

FVPL

Financial liabilities

measured at

amortized cos

Derivative liabilities

that are effective

hed

instruments

Book value

Fair value

(In millions of Korean Won)

Trade notes and

accounts pa

able

￦

9,155,255

￦

9,155,255

￦

9,155,255

Other pa

ables

5,422,320

Borrowings and

debentures

107,793,278

108,112,411

Other financial liabilities

54,101

1,274

87,070

142,445

Lease liabilities

950,572

Other liabilities

2,415,891

￦

54,101

￦

125,738,590

￦

87,070

￦

125,879,761

￦

126,198,894

(3)

Fair value estimation

The Group categorizes the assets and liabilities measured at fair value into the following three-level fair value hierarchy

in accordance with the inputs used for fair value measurement.



Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.



Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices).



Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Fair value measurements of financial instruments by fair value

hierarchy levels as of December 31, 2022 are as follows.

December 31, 2022

Description

Level 1

Level 2

Level 3

Total

(In millions of Korean Won)

Financial assets:

Financial assets measured

at FVPL

￦

57,556

￦

5,412,130

￦

268,620

￦

5,738,306

Derivative assets that are

effective hed

instruments

1,236,696

Financial assets measured

at FVOCI

1,493,627

451,990

893,964

2,839,581

￦

1,551,183

￦

7,100,816

￦

1,162,584

￦

9,814,583

Financial liabilities:

Financial liabilities measured

at FVPL

￦

11,451

￦

200,227

￦

211,678

Derivative liabilities that are

effective hed

instruments

173,361

1,935

175,296

￦

184,812

￦

202,162

￦

386,974

Fair value measurements of financial instruments by fair value hierarchy levels as of December 31, 2021 are as

follows.

December 31, 2021

Description

Level 1

Level 2

Level 3

Total

(In millions of Korean Won)

Financial assets:

Financial assets measured

at FVPL

￦

107,290

￦

12,226,048

￦

162,330

￦

12,495,668

Derivative assets that are

effective hed

instruments

525,114

Financial assets measured

at FVOCI

1,561,959

435,797

913,767

2,911,523

￦

1,669,249

￦

13,186,959

￦

1,076,097

￦

15,932,305

Financial liabilities:

Financial liabilities measured

at FVPL

￦

962

￦

53,139

￦

54,101

Derivative liabilities that are

effective hed

instruments

87,070

￦

88,032

￦

53,139

￦

141,171

The changes in financial instruments classified as Level 3 for the year ended December 31, 2022 are as follows.

Descri

tion

Beginning

of the perio

Purchases

Disposals

Valuation

Others

End of

the perio

(In millions of Korean Won)

Financial assets measured

at FVPL

￦

162,330

￦

92,328

￦

(6,107)

￦

8,529

￦

11,540

￦

268,620

Financial assets measured

at FVOCI

913,767

12,373

(874)

79,143

(110,445)

893,964

Financial liabilities measured

at FVPL

53,139

29,884

2,169

115,035

200,227

Derivative liabilities that are

effective hedging instruments

1,935

The changes in financial instruments classified as Level 3 for the year ended December 31, 2021 are as follows.

Descri

tion

Beginning

of the perio

Purchases

Disposals

Valuation

Others

End of

the perio

(In millions of Korean Won)

Financial assets measured

at FVPL

￦

515,020

￦

38,076

￦

(

411,334

)

￦

20,568

￦

162,330

Financial assets measured

at FVOCI

739,669

66,580

(2,579)

73,805

36,292

913,767

Financial liabilities measured

at FVPL

52,323

816

53,139

(4)

Financial assets and liabilities subject to offsetting, and financial instruments subject to an enforceable

master netting

arrangement or similar agreement as of December 31, 2022 are as follows.

Description

Gross amounts

of recognized

financial assets

and liabilities

Gross amounts

of recognized

financial assets

and liabilities

set off in the

consolidated

statement of

financial

osition

Net amounts of

financial assets

and liabilities

presented in the

consolidated

statement of

financial

osition

amounts not set

off in the

consolidated

statement of

financial

position -

financial

instruments

amounts not

set off in the

statement of

financial

position -

collateral

received

(pledged)

Net amounts

(In millions of Korean Won)

Financial assets:

Trade notes and accounts

receivable

￦

4,731,300

￦

272,462

￦

4,458,838

￦

4,458,838

Other receivables

3,005,009

626,041

2,378,968

Financial assets measured at

FVPL

47,256

Derivative assets that are

effective hedging instruments (*)

1,236,696

93,233

1,143,463

￦

9,020,261

￦

898,503

￦

8,121,758

￦

93,233

￦

8,028,525

Financial liabilities:

Trade notes and accounts

ayable

￦

11,418,549

￦

621,484

￦

10,797,065

￦

10,797,065

Other payables

7,569,527

277,019

7,292,508

Financial liabilities measured at

FVPL

211,678

Derivative liabilities that are

effective hedging instruments (*)

175,296

93,233

82,063

￦

19,375,050

￦

898,503

￦

18,476,547

￦

93,233

￦

18,383,314

(*)

These are derivative assets and liabilities that the Group may have the right to offset in the event of default, insolvency or bankruptcy

of the counterparty although these do not meet the criteria of offsetting under K-IFRS 1032.

Financial assets and liabilities, subject to offsetting, and financial instruments subject to an enforceable master

netting arrangement or similar agreement as of December 31, 2021 are as follows.

Description

Gross amounts

of recognized

financial assets

and liabilities

Gross amounts

of recognized

financial assets

and liabilities

set off in the

consolidated

statement of

financial

osition

Net amounts of

financial assets

and liabilities

presented in the

consolidated

statement of

financial

osition

amounts not set

off in the

consolidated

statement of

financial

position -

financial

instruments

amounts not

set off in the

statement of

financial

position -

collateral

received

(pledged)

amounts

(In millions of Korean Won)

Financial assets:

Trade notes and accounts

receivable

￦

3,519,284

￦

234,831

￦

3,284,453

￦

3,284,453

Other receivables

2,573,976

497,173

2,076,803

Financial assets measured at

FVPL

14,534

14,513

Derivative assets that are

effective hedging instruments (*)

525,114

18,204

506,910

￦

6,632,908

￦

732,004

￦

5,900,904

￦

18,225

￦

5,882,679

Financial liabilities:

Trade notes and accounts

ayable

￦

9,640,133

￦

484,878

￦

9,155,255

￦

9,155,255

Other payables

5,669,446

247,126

5,422,320

Financial liabilities measured at

FVPL

54,101

54,080

Derivative liabilities that are

effective hedging instruments (*)

87,070

18,204

68,866

￦

15,450,750

￦

732,004

￦

14,718,746

￦

18,225

￦

14,700,521

(*) These are derivative assets and liabilities that the Group may have the right to offset in the event of default, insolvency or bankruptcy

of the counterparty although these do not meet the criteria of offsetting under K-IFRS 1032.

(5)

Interest income, dividend income and interest expenses by categories of financial instruments for the year ended

December 31, 2022 are as follows.

2022

Description

Interest

income

Dividend

income

Interest

expenses

(In millions of Korean Won)

on-financial services:

Financial assets measured

at amortized cos

￦

489,133

￦

Financial assets

measured at FVPL

150,084

Financial assets measured

at FVOCI

44,533

Financial liabilities measured

at amortized cos

434,059

￦

639,217

￦

44,533

￦

434,059

Financial services:

Financial assets measured

at amortized cos

￦

3,466,000

￦

Financial assets measured

at FVPL

5,825

1,300

Financial assets measured

at FVOCI

899

Financial liabilities measured

at amortized cos

2,277,906

￦

3,472,724

￦

1,300

￦

2,277,906

Interest income, dividend income and interest expenses by categories of financial instruments for the year ended

December 31, 2021 are as follows.

2021

Description

Interest

income

Dividend

income

Interest

expenses

(In millions of Korean Won)

on-financial services:

Financial assets measured

at amortized cos

￦

248,198

￦

Financial assets

measured at FVPL

100,415

Financial assets measured

at FVOCI

28,419

Financial liabilities measured

at amortized cos

267,648

￦

348,613

￦

28,419

￦

267,648

Financial services:

Financial assets measured

at amortized cos

￦

4,138,039

￦

Financial assets measured

at FVPL

4,040

1,721

Financial assets measured

at FVOCI

203

Financial liabilities measured

at amortized cos

1,730,903

￦

4,142,282

￦

1,721

￦

1,730,903

(6)

The commission income (financial services revenue) arising from financial assets or liabilities other than financial

assets or liabilities measured at FVPL for the years ended December 31, 2022 and 2021 are

￦

1,011,152 million and

￦

923,656 million, respectively.

In addition, the fee expenses (cost of sales from financial services)

financial assets or liabilities other than financial assets or liabilities measured at FVPL for the years ended December

31, 2022 and 2021 are

￦

427,606 million and

￦

374,229 million, respectively.

(7)

The Group recognizes transfers between levels of the fair value hierarchy at the date of the event or change in

circumstances that caused the transfer.

There are no significant transfers between Level 1 and Level 2 for the year

ended December 31, 2022.

(8)

Descriptions of the valuation techniques and the inputs used in the fair value measurements categorized

within

Level 2 and Level 3 of the fair value hierarchy are as follows.

Currency

forwards, options and swap

Fair value of currency forwards, options and swap is measured based on forward exchange rate quoted in the current

market at the end of the reporting period, which

has the same remaining period of derivatives to be measured.

the forward exchange rate, which has the same remaining period of currency forwards, options and swap, is not

quoted in the current market, fair value is measured using estimates of similar period of forward exchange rate by

applying interpolation method with quoted forward exchange rates.

As the inputs used to measure fair value of currency forwards, options and swap are supported by observable market

data, such as forward exchange rates, the Group classifies the estimates of fair value measurements

of the currency

forwards, options and swap as Level 2 of the fair value hierarchy.

- Interest rate swap

The discount rate and forward interest rate used to measure the fair value of interest rate swap are determined based

on an applicable yield curve derived from interest quoted in the current market at the end of the reporting period.

The fair value of interest rate swap was measured as a discount on the estimated future cash flows of interest rate

swap based on forward interest rates derived from the above method at an appropriate discount rate.

As the inputs used to measure fair value of interest rate swap are supported by observable market data,

such

yield curves, the Group classifies the estimates of fair value measurements

of the interest rate swap as Level 2 of the

fair value hierarchy.

- Debt instruments including corporate bonds

Fair value of debt instruments including corporate bonds is measured applying discounted cash flow method.

The rate used to discount cash flows is determined based on swap rate and credit spreads of debt instruments,

which have the similar credit rating and period quoted in the current market with those of debt instruments

including corporate bonds that should be measured.

The Group classifies fair value measurements of debt

instruments including corporate bonds as Level 2 of the fair-value hierarchy since the rate, which has significant

effects on fair value of debt instruments including corporate bonds, is based on observable market data.

- Unlisted equity securities

Fair value of unlisted equity securities is measured using discounted cash flow projection and market approach, and

as for discounted cash flow projections, certain assumptions not based on observable market prices or rate, such as

sales growth rate, pre-tax operating income ratio and discount rate based on business plan and circumstance of

industry are used to estimate the future cash flow.

The discount rate used to discount the future cash

flows,

calculated by applying the Capital Asset Pricing Model, using the data of similar listed companies.

The Group

determines that the effect of estimation and assumptions referred above affecting fair value of unlisted equity

securities is significant and classifies fair value measurements of unlisted securities as Level 3 of the fair value

hierarchy.

- Redeemable convertible preference share

The fair value of redeemable convertible preference share is measured based on the fair value, exercise price,

maturity, and the stock price volatility up to the maturity of the underlying asset, using the binomial option pricing

model.

The discount rate used in the binomial option pricing model is applied by converting the rate of return on

corporate bonds with equivalent credit rating corresponding to the remaining maturity into a continuous

compounding discount rate, and the stock price volatility up to maturity uses historical volatility of proxy

companies in similar industries in response to the remaining maturity. The fair value of the underlying asset is

assumed to be maintained until the end of the current period after estimating the underlying asset value on the

contracted date by inverting the underlying asset value inherent in the terms of the transaction on the premise that

the acquisition transaction of related shares in the current period is an orderly transaction and traded at fair value.

The group classifies the fair value measurement of redeemable convertible preference share as Level 3 in the fair

value hierarchy based on the assumption that the effect of the above assumptions and estimates on the fair value

of redeemable convertible preference share classified.

(9) The quantitative information about significant unobservable inputs used in the fair value measurements

categorized

within Level 3 of the fair value hierarchy and the description of relationships of significant

unobservable inputs to the fair value are as follows:

Description

Fair value at

December 31, 2022

Valuation

techniques

Unobservable

inputs

Ran

Description of

relationship

Financial

assets

Financial

liabilities

(In millions of Korean Won)

Unlisted equity

securities,

redeemable

convertible

preference

share and

others

￦

1,162,584

￦

202,162

Discounted

cash flow

and others

Sales growth rate

-8.8% ~ -2.6%

If the sales

growth rate,

the pre-tax

operating

profit margin

ratio and stock

price volatility

increases or

the discount

rate declin

es,

the fair value

increases.

Pre-tax operating

profit margin

ratio

2.0% ~ 7.6%

Discount rate

8.3%

Stock price

volatility

59.2% ~ 60.1%

The Group does not expect changes in significant unobservable inputs would have a significant impact on the fair value,

taking into account reasonable alternative assumptions.

21.

CAPITAL STOCK:

The Company’s number of shares authorized is 600,000,000 shares.

Common stock and preferred stock as of

December 31, 2022 and December 31, 2021 are as follows.

(1) Common stock

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won, except par value)

Issue

213,668,187 shares

Par value

￦

5,000

￦

5,000

Capital stoc

1,157,982

The Company completed stock retirement of 10,000,000 common shares, 1,320,000 common shares and 6,608,292

common shares as of March 5, 2001, May 4, 2004 and July 27, 2018 respectively.

Due to these stock retirements, the

total face value of outstanding stock differs from the capital stock amount.

(2) Preferred stock

Description

Par value

Issue

Korean Won

Dividend rate

(In millions of

Korean Won)

referred stoc

￦

5,000

24,356,685 shares

￦

125,550

Dividend rate of common stock + 1%

referred stoc

36,485,451 shares

193,069

The lowest stimulated dividend rate: 2%

referred stoc

2,428,735 shares

12,392

The lowest stimulated dividend rate: 1%

63,270,871 shares

￦

331,011

As of March 5, 2001, the Company retired 1,000,000 second preferred shares and as of July 27, 2018, the Company

retired 753,297 first preferred shares, 1,128,414 second preferred shares and 49,564 third preferred shares.

Due to the

stock retirement, the total face value of outstanding stock differs from the capital stock amount.

22.

CAPITAL SURPLUS:

Capital surplus as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Paid-in capital in excess of par value

￦

3,321,334

￦

3,321,334

Others(*)

919,969

748,926

￦

4,241,303

￦

4,070,260

(*) During the year ended December 31, 2022, the Group disposed of 2,216,983 shares of treasury stocks through

treasury stock exchange with KT Corporation, and recognized gain on disposal of treasury stocks in the amount of

￦

118,686

million.

23.

OTHER CAPITAL ITEMS:

Other capital items consist of treasury stocks purchased for the stabilization of stock price.

Number of treasury stocks

as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31,

2022

December 31,

2021

(Number of shares)

Common stoc

11,408,711

14,048,242

referred stoc

2,430,559

2,333,133

referred stoc

1,718,424

1,572,482

referred stoc

72,861

63,146

24.

ACCUMULATED OTHER COMPREHENSIVE LOSS:

(1)

Accumulated other comprehensive loss as of December 31, 2022 is as follows.

Description

December 31, 2022

(In millions of Korean Won)

Gain on valuation of financial assets measured at FVOCI

￦

418,986

Loss on valuation of financial assets measured at FVOCI

(768,117)

Gain on valuation of cash flow hed

e derivatives

276,938

Loss on valuation of cash flow hed

e derivatives

(93,162)

Gain on share of the other comprehensive income of

equit

-accounted investees

195,912

Loss on share of the other comprehensive income of

equit

-accounted investees

(715,558)

Loss on forei

n operations translation, ne

(935,681)

￦

(1,620,682)

(2)

Accumulated other comprehensive loss as of December 31, 2021 is as follows.

Description

December 31, 2021

(In millions of Korean Won)

Gain on valuation of financial assets measured at FVOCI

￦

451,693

Loss on valuation of financial assets measured at FVOCI

(370,812)

Gain on valuation of cash flow hed

e derivatives

56,048

Loss on valuation of cash flow hed

e derivatives

(42,068)

Gain on share of the other comprehensive income of

equit

-accounted investees

228,299

Loss on share of the other comprehensive income of

equit

-accounted investees

(587,620)

Loss on forei

n operations translation, ne

(1,508,141)

￦

(1,772,601)

25.

RETAINED EARNINGS:

(1)

Retained earnings as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31,2021

(In millions of Korean Won)

al reserve (*)

￦

744,836

￦

744,836

Discretionar

reserve

47,307,996

47,701,296

Unappropriate

31,900,769

24,721,723

￦

79,953,601

￦

73,167,855

(*)

The Commercial Code of the Republic of Korea requires the Company to appropriate as a legal reserve, a minimum of 10% of

annual cash dividends declared, until such reserve equals 50% of its capital stock issued.

The reserve is not available for the

payment of cash dividends, but may be transferred to capital stock or used to reduce accumulated deficit, if any.

Appraisal gains, amounting to

￦

1,852,871 million, derived from asset revaluation pursuant to the Asset Revaluation Law

of Korea are included in retained earnings.

It may be only transferred to capital stock or used to reduce accumulated

deficit, if any.

(2)

The computation of the interim dividends for the year ended December 31, 2022 is as follows.

Description

Common

stoc

Preferred

stoc

Preferred

stoc

Preferred

stoc

(In millions of Korean Won, except per share amounts)

Par value per share

￦

5,000

￦

5,000

￦

5,000

￦

5,000

Shares, net of treasur

stocks

198,765,273

21,926,126

34,767,027

2,355,874

Dividends per share

￦

1,000

￦

1,000

￦

1,000

￦

1,000

Dividend rate

20%

Dividends declare

198,764

21,926

34,767

2,356

The computation of the interim dividends for the year ended December 31, 2021 is as follows.

Description

Common

stoc

Preferred

stoc

Preferred

stoc

Preferred

stoc

(In millions of Korean Won, except per share amounts)

Par value per share

￦

5,000

￦

5,000

￦

5,000

￦

5,000

Shares, net of treasur

stocks

200,576,769

22,169,692

35,131,881

2,380,161

Dividends per share

￦

1,000

￦

1,000

￦

1,000

￦

1,000

Dividend rate

20%

Dividends declare

200,577

22,170

35,132

2,380

(3)

The computation of the proposed dividends for the year ended December 31, 2022 is as follows.

Description

Common

stoc

Preferred

stoc

Preferred

stoc

Preferred

stoc

(In millions of Korean Won, except per share amounts)

Par value per share

￦

5,000

￦

5,000

￦

5,000

￦

5,000

Shares, net of treasur

stocks

202,259,476

21,926,126

34,767,027

2,355,874

Dividends per share

￦

6,000

￦

6,050

￦

6,100

￦

6,050

Dividend rate

120%

121%

122%

121%

Dividends declare

1,213,557

132,653

212,079

14,253

The computation of the dividends for the year ended December 31, 2021 is as follows.

Description

Common

stoc

Preferred

stoc

Preferred

stoc

Preferred

stoc

(In millions of Korean Won, except per share amounts)

Par value per share

￦

5,000

￦

5,000

￦

5,000

￦

5,000

Shares, net of treasur

stocks

199,619,945

22,023,552

34,912,969

2,365,589

Dividends per share

￦

4,000

￦

4,050

￦

4,100

￦

4,050

Dividend rate

80%

81%

82%

81%

Dividends declare

798,480

89,195

143,143

9,581

26.

HYBRID BOND:

(1)

HYUNDAI CARD CO., LTD., a subsidiary of the Company, issued hybrid bond and the Group classified it as

equity (non-controlling interests). As of December 31, 2022, hybrid bond is as follows.

Description

Issue date

Maturity date

Annual

interest rate

December 31, 2022

(%)

(In millions of Korean Won)

The 731st

Hybrid Tier 1 (Private)

Jul

5, 2018

Jul

5, 2048

4.70

￦

300,000

Issue cos

(760)

￦

299,240

(2)

As of December 31, 2022, the conditions of hybrid bond that HYUNDAI CARD CO., LTD., a subsidiary of the

Company issued are as follows.

Description

Maturity

Thirty years (Maturity extension is possible according to the issuer's decision

upon maturit

)

Interest rate

Issue date ~ July 5, 2023 : An annual fixed interest rate 4.7%

Increase of 2% after five years which is limited to one time only in accordance with

Step-up clause

Interest payment

condition

Three months, optional postponement of payment

Others

Repayment before maturity by issuer is available after five years from issue date

27.

SALES:

(1)

Sales for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Sales of

oods

￦

121,128,808

￦

99,722,885

Renderin

of services

3,577,155

2,624,047

alties

252,904

276,564

Financial services revenue

13,764,122

11,536,970

Revenue related to construction contracts

3,099,326

2,814,036

Others

705,220

636,124

￦

142,527,535

￦

117,610,626

(2)

As of December 31, 2022, the aggregate transaction price allocated to the unsatisfied (or partially unsatisfied)

performance obligation that is expected to be recognized as revenue in future periods is as follows.

Description

Within a yea

After a yea

(In millions of Korean Won)

Deferred revenue and others

￦

2,016,748

￦

3,079,984

28.

SELLING AND ADMINISTRATIVE EXPENSES:

Selling and administrative expenses for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Sellin

expenses:

Export expenses

￦

78,842

￦

46,057

Overseas market expenses

443,923

412,476

Advertisements and sales promotion

3,102,616

2,609,784

Sales commissions

909,093

983,949

Expenses for warranties

4,346,694

2,947,290

Transportation expenses

101,995

116,035

8,983,163

7,115,591

Administrative expenses:

roll

3,265,946

2,882,164

Pos

-emplo

ment benefits

173,367

177,845

Welfare expenses

550,396

496,461

Service char

1,682,831

1,529,151

Research

1,762,749

1,534,993

Othe

2,079,831

1,515,341

9,515,120

8,135,955

￦

18,498,283

￦

15,251,546

29.

GAIN(LOSS) ON INVESTMENTS IN JOINT VENTURES AND ASSOCIATES:

Gain(loss) on investments in joint ventures and associates for the years ended December 31, 2022 and 2021 is as

follows.

Description

2022

2021

(In millions of Korean Won)

Gain on share of earnings of equity-accounted investees, net

￦

1,635,777

￦

1,278,591

Gain on disposals of investments in associates

63,992

38,106

Impairment loss on investments in associates

(143,186)

(13,332)

￦

1,556,583

￦

1,303,365

30.

FINANCE INCOME AND EXPENSES:

(1)

Finance income for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Interest income

￦

639,217

￦

348,613

Gain on forei

n exchan

e transactions

146,066

62,003

Gain on forei

n currenc

translation

333,849

162,811

Dividend income

44,533

28,419

Gain on derivatives

18,689

89,522

Others

36,459

221,434

￦

1,218,813

￦

912,802

(2)

Finance expenses for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Interest expenses

￦

536,086

￦

304,542

Loss on forei

n exchan

e transactions

77,799

54,622

Loss on forei

n currenc

translation

416,846

182,233

Loss on derivatives and others

23,497

7,013

￦

1,054,228

￦

548,410

31.

OTHER INCOME AND EXPENSES:

(1)

Other income for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Gain on foreign exchange transactions

￦

827,960

￦

624,884

Gain on foreign currency translation

688,119

220,468

Gain on disposals of PP&E

49,442

23,978

Commission income

18,335

22,716

Rental income

97,905

94,528

Others

575,352

460,687

￦

2,257,113

￦

1,447,261

(2)

Other expenses for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Loss on foreign exchange transactions

￦

738,469

￦

527,878

Loss on foreign currency translation

814,458

231,859

Loss on disposals of PP&E

177,132

57,899

Donations

89,984

66,249

Others

1,030,064

950,520

￦

2,850,107

￦

1,834,405

32.

EXPENSES BY NATURE:

Expenses by nature for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Chan

es in inventories

￦

(1,677,346)

￦

434,257

Raw materials and

merchandise use

80,774,363

67,579,441

Emplo

ee benefits

10,667,028

9,613,599

Depreciation

3,180,687

2,937,914

Amortization

1,866,935

1,617,823

Others

40,746,206

30,583,048

Total (*)

￦

135,557,873

￦

112,766,082

(*)

Sum of cost of sales, selling and administrative expenses and other expenses in the consolidated statements of income.

33.

EARNINGS PER COMMON STOCK AND PREFERRED STOCK:

Basic earnings per common stock and preferred stock are computed by dividing profit available to common stock and

preferred stock by the weighted-average number of common stock and preferred stock outstanding during the year.

The

Group does not compute diluted earnings per common stock for the years ended December 31, 2022 and 2021, since there

are no dilutive items during the years.

Basic earnings per common stock and preferred stock for the years ended December 31, 2022 and 2021 are computed as

follows.

For the

ear ended December 31, 2022

For the

ear ended December 31, 2021

Description

Profit

attributable to

Weighted-

average number

of shares

outstandin

(*1)

Basic

earnings

er share

Profit

attributable to

Weighted-

average number

of shares

outstandin

(*1)

Basic

earnings

er share

(In millions of Korean Won, excep

er share amounts)

Common stoc

￦

5,696,576

199,735,258

￦

28,521

￦

3,806,754

200,578,742

￦

18,979

Preferred stock (*2)

618,639

21,932,141

28,207

421,090

22,160,384

19,002

Preferred stoc

982,679

34,775,916

28,257

669,282

35,117,788

19,058

Preferred stoc

66,470

2,356,491

28,207

45,230

2,379,240

19,010

(*1) Weighted-average number of shares outstanding includes the effects of treasury stock transactions.

(*2) 1

preferred stock meets the definition of ‘ordinary shares’ as defined in K-IFRS 1033 ‘Earnings per Share’.

34.

INCOME TAX EXPENSE:

(1)

The components of income tax expense for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Current tax expense

￦

2,705,459

￦

1,816,699

Adjustments recognized in the current year in relation to

the prior

ears

66,052

(274,525)

Chan

es in deferred taxes relatin

Temporar

differences

(623,348)

1,718,022

Tax losses and tax credits

949,285

(683,646)

Items that are char

ed or credited directl

to equit

(186,176)

(104,461)

Effect of forei

n exchan

e differences and others

53,057

(205,604)

Income tax expense

￦

2,964,329

￦

2,266,485

(2)

The reconciliation from profit before income tax to income tax expense for the years ended December 31, 2022

and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Profi

efore income tax

￦

10,947,943

￦

7,959,562

Income tax expense calculated at the applicable

tax rates of 27.2% in 2022 and 21.4% in 2021

2,973,667

1,699,706

ustments:

on-taxable income

(91,601)

(100,314)

on-deductible expenses

399,296

261,172

Tax credits

(528,986)

(429,012)

Others

211,953

834,933

(9,338)

566,779

Income tax expense

￦

2,964,329

￦

2,266,485

Effective tax rate

27.1%

28.5%

(3)

The changes in deferred tax assets (liabilities) for the year ended December 31, 2022 are as follows.

Description

Beginning

of the

Chan

End

of the

(In millions of Korean Won)

Provisions

￦

2,824,209

￦

451,449

￦

3,275,658

Financial assets measured at FVPL

1,231

308

1,539

Financial assets measured at FVOCI

(121,184)

113,194

(7,990)

Investment of subsidiaries, associates and joint

ventures

(1,578,133)

(418,369)

(1,996,502)

Derivatives

(1,516)

(93,536)

(95,052)

PP&E

(5,861,743)

60,309

(5,801,434)

Accrued income

(15,840)

(2,927)

(18,767)

Gain (loss) on forei

n currenc

translation, ne

(136)

(197)

(333)

Others

(42,945)

513,117

470,172

(4,796,057)

623,348

(4,172,709)

Carryforward of tax losses and tax credits

3,331,562

(949,285)

2,382,277

￦

(1,464,495)

￦

(325,937)

￦

(1,790,432)

The changes in deferred tax assets (liabilities) for the year ended December 31, 2021 are as follows.

Description

Beginning

of the

Chan

End

of the

(In millions of Korean Won)

Provisions

￦

2,713,730

￦

110,479

￦

2,824,209

Financial assets measured at FVPL

1,795

(564)

1,231

Financial assets measured at FVOCI

(137,271)

16,087

(121,184)

Investment of subsidiaries, associates and joint

ventures

(1,516,729)

(61,404)

(1,578,133)

Derivatives

(45,697)

44,181

(1,516)

PP&E

(5,058,726)

(803,017)

(5,861,743)

Accrued income

61,186

(77,026)

(15,840)

Gain (loss) on foreign currency translation, net

431

(567)

(136)

Others

903,246

(946,191)

(42,945)

(3,078,035)

(1,718,022)

(4,796,057)

Carryforward of tax losses and tax credits

2,647,916

683,646

3,331,562

￦

(430,119)

￦

(1,034,376)

￦

(1,464,495)

(4)

Income taxes relating to items that are charged or credited directly to equity for the years ended December 31,

2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Gain on disposal of treasur

stocks

￦

(66,131)

￦

(9,451)

Loss (

ain) on financial assets measured at FVOCI, ne

97,671

(32,147)

Loss (

ain) on valuation of cash flow hed

e derivatives, ne

(78,505)

5,848

Remeasurements of defined benefit plans

(152,166)

(64,906)

Chan

es in retained earnin

s of equit

-accounted

investees, ne

12,955

(3,805)

￦

(186,176)

￦

(104,461)

(5)

The amount of temporary differences associated with investments in subsidiaries, joint ventures and associates, for

which deferred tax liabilities are not recognized, are

￦

8,948,716 million and

￦

5,644,375 million as of December

31, 2022 and 2021, respectively.

35.

RETIREMENT BENEFIT PLAN:

(1)

Expenses recognized in relation to defined contribution plans for the years ended December 31, 2022 and 2021 are as

follows.

Description

2022

2021

(In millions of Korean Won)

Paid-in cash

￦

14,377

￦

11,650

Reco

nized liabilit

4,754

3,320

￦

19,131

￦

14,970

(2)

The significant actuarial assumptions used by the Group as of December 31, 2022 and December 31, 2021 are as

follows.

Description

December 31, 2022

December 31, 2021

Discount rate (*)

5.29%

3.84%

Rate of expected future salar

increase

4.05%

4.51%

(*) The Group applied the market yields of high-quality corporate bonds (AA+) and others as the discount rate at

December 31, 2022, to discount the defined benefit obligation to the present value, and the same discount rate was

applied as the expected return rate when calculating interest income on plan assets.

Employee turnover and mortality assumptions used for actuarial valuation are based on the economic conditions and

statistical data of each country where entities within the Group are located.

(3)

The amounts recognized in the consolidated statements of financial position related to defined benefit plans

as of

December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Present value of defined benefit obli

ations

￦

6,033,698

￦

6,580,593

Fair value of plan assets

(6,809,339)

(6,721,149)

￦

(775,641)

￦

(140,556)

et defined benefit liabili

ies

61,861

79,165

et defined benefit assets

(837,502)

(219,721)

(4)

Changes in net defined benefit assets and liabilities for the year ended December 31, 2022 are as follows.

Description

Present value of defined

enefit obli

ations

Fair value of

lan assets

Net defined benefit

liabilities

(In millions of Korean Won)

innin

of the

￦

6,580,593

￦

(6,721,149)

￦

(140,556)

Current service cos

575,608

Interest expenses (income)

173,934

(185,313)

(11,379)

Past service cos

(33)

7,330,102

(6,906,462)

423,640

Remeasurements:

Return on plan assets

168,474

Actuarial gains and losses arising

from changes in demographic

assumptions

255,197

Actuarial gains and losses arising

from changes in financial

assumptions

(1,002,183)

Actuarial gains and losses arising

from experience adjustments and

others

35,038

(711,948)

168,474

(543,474)

Contributions

(584,701)

Benefits pai

(583,748)

483,747

(100,001)

Transfers in (out)

1,946

(1,454)

492

Effect of foreign exchange

differences and othe

(2,654)

31,057

28,403

End of the

￦

6,033,698

￦

(6,809,339)

￦

(775,641)

Changes in net defined benefit assets and liabilities for the year ended December 31, 2021 are as follows.

Description

Present value of defined

enefit obli

ations

Fair value of

lan assets

Net defined benefit

liabilities

(In millions of Korean Won)

innin

of the

￦

6,490,583

￦

(6,253,299)

￦

237,284

Current service cos

598,231

Interest expenses (income)

140,222

(139,588)

634

Past service cos

221

7,229,257

(6,392,887)

836,370

Remeasurements:

Return on plan assets

(1,247)

Actuarial gains and losses arising

from changes in demographic

assumptions

2,573

Actuarial gains and losses arising

from changes in financial

assumptions

(259,343)

Actuarial gains and losses arising

from experience adjustments and

others

17,719

(239,051)

(1,247)

(240,298)

Contributions

(689,687)

Benefits pai

(447,857)

367,927

(79,930)

Transfers in (out)

2,721

(1,605)

1,116

Effect of foreign exchange

differences and othe

35,523

(3,650)

31,873

End of the

￦

6,580,593

￦

(6,721,149)

￦

(140,556)

(5)

The sensitivity analysis based on reasonably possible changes of the significant

assumptions as of December 31,

2022 and December 31, 2021, while all the other assumptions are retained, are as follows.

Effect on the net defined benefit liabilities

December 31, 2022

December 31, 2021

Description

Increase b

Decrease b

Increase b

Decrease b

(In millions of Korean Won)

Discount rate

￦

(367,700)

￦

419,353

￦

(486,472)

￦

542,497

Rate of expected future salary increase

400,804

(360,074)

492,651

(457,048)

(6)

The fair value of the plan assets as of December 31, 2022 and December 31, 2021 is as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Insurance instruments

￦

6,806,690

￦

6,717,877

Others

2,649

3,272

￦

6,809,339

￦

6,721,149

(7)

The Group expects to pay contribution of approximately

￦

546,548 million to the plan in 2023 and the weighted

average duration of the defined benefit obligation as of December 31, 2022 is 7.8 years.

36.

CASH GENERATED FROM OPERATIONS:

(1)

Cash generated from operations for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Profit for the

￦

7,983,614

￦

5,693,077

ustments:

Retirement benefit costs

568,950

602,406

Depreciation

3,180,687

2,937,914

Amortization of intan

ible assets

1,866,935

1,617,823

Provision for warranties

4,007,458

2,678,950

Income tax expense

2,964,329

2,266,485

Loss on forei

n currenc

translation, ne

249,758

30,813

Loss on disposals of PP&E, ne

127,690

33,921

Interest income, ne

(103,131)

(44,071)

Gain on share of earnin

s of equit

-accounted investees, ne

(1,635,777)

(1,278,591)

Cost of sales from financial services, ne

7,439,938

6,229,723

Impairment loss on investments in associates

143,186

13,332

Others

1,445,915

688,884

20,255,938

15,777,589

Chan

es in operatin

assets and liabilities:

Decrease (increase) in trade notes and accounts receivable

(1,325,728)

280,750

Increase in other receivables

622,992

(161,098)

Decrease (increase) in other financial assets

1,423,023

237,835

Decrease (increase) in inventories

(2,721,100)

177,234

Increase in other assets

(83,879)

(381,923)

Increase in trade notes and accounts pa

able

1,146,082

555,739

Increase in other pa

ables

2,186,971

13,702

Increase in other liabilities

2,086,192

1,057,959

Decrease in other financial liabilities

(1,597)

(11,583)

Decrease in net defined benefit liabilities

(573,780)

(678,416)

ment of severance benefits

(100,001)

(79,930)

Decrease in provisions

(3,796,018)

(3,261,759)

Chan

es in financial services receivables

(8,457,539)

(9,551,305)

Investment in operatin

leases

(4,689,798)

(7,649,654)

Others

361,523

(835,327)

(13,922,657)

(20,287,776)

Cash

enerated from operations

￦

14,316,895

￦

1,182,890

(2)

Major non-cash transactions not stated on the consolidated statements of cash flows from investing and financing

activities for the years ended December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Reclassification of the current portion of long-term debt

and debentures

￦

24,891,478

￦

21,149,425

Reclassification of construction-in-

ress to PP&E

3,525,985

3,843,940

Reclassification of construction-in-

ress to intan

ible assets

186,210

123,107

(3)

Changes in liabilities arising from financial activities for the year ended

December 31, 2022 are as follows.

Changes from non-cash transactions

Description

Beginning

of the yea

Cash flows from

financing

activities

Reclassified to

current portion

Effect of

exchange rate

changes

Present value

discoun

Others(*)

End of

the yea

(In millions of Korean Won)

Short-term

borrowings

(including

current

ortion)

￦

33,666,738

￦

(22,985,947)

￦

24,891,478

￦

684,515

￦

56,738

￦

627,089

￦

36,940,611

Long-term

debts

10,667,731

6,925,739

(5,432,473)

115,999

7,656

497

12,285,149

Debentures

63,458,809

16,381,780

(19,459,005)

2,524,323

18,593

35,560

62,960,060

(*)

Others include transfers from or to other accounts and others.

Changes in liabilities arising from financial activities for the year ended

December 31, 2021 are as follows.

Changes from non-cash transactions

Description

Beginning

of the yea

Cash flows from

financing

activities

Reclassified to

current portion

Effect of

exchange rate

changes

Present

value

discoun

Others(*)

End of

the yea

(In millions of Korean Won)

Short-term

borrowings

(including

current

ortion)

￦

29,884,675

￦

(19,812,277)

￦

21,149,425

￦

1,649,562

￦

18,765

￦

776,588

￦

33,666,738

Long-term

debts

12,726,724

3,853,657

(6,285,807)

338,631

10,831

23,695

10,667,731

Debentures

48,795,361

26,862,597

(14,863,618)

2,536,702

23,103

104,664

63,458,809

(*)

Others include transfers from or to other accounts and others.

37.

RISK MANAGEMENT:

(1)

Capital risk management

The Group manages its capital to maintain an optimal capital structure for maximizing profit of its shareholder and

reducing the cost of capital. Debt to equity ratio calculated as total liabilities divided by total equity is used as an index

to manage the Group’s capital. The overall capital risk management policy is consistent with that of the prior period. Debt

to equity ratios as of December 31, 2022 and December 31, 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Total liabilities

￦

164,845,917

￦

151,330,626

Total equit

90,896,545

82,615,789

Deb

-to-equit

ratio

181.4%

183.2%

(2)

Financial risk management

The Group is exposed to various financial risks such as market risk (foreign exchange risk, interest rate risk and price

risk), credit risk and liquidity risk related to its financial instruments. The purpose of risk management of the Group is to

identify potential risks related to financial performance and reduce, eliminate and evade those risks to an acceptable level

of risks to the Group. Overall, the Group’s financial risk management policy is consistent with the prior period policy.

1) Market risk

The Group is mainly exposed to financial risks arising from changes in foreign exchange rates and interest rates.

Accordingly, the Group uses financial derivative contracts to hedge and to manage its interest rate risk and foreign

currency risk.

Foreign exchange risk management

The Group is exposed to various foreign exchange risks by making transactions in foreign currencies. The Group is

mainly exposed to foreign exchange risk in USD, EUR, JPY and others.

The Group manages foreign exchange risk by matching the inflow and the outflow of foreign currencies according to

each currency and maturity, and by adjusting the foreign currency settlement date based on its exchange rate forecast.

The Group uses foreign exchange derivatives, such as currency forward, currency swap, and currency option; as hedging

instruments. However, speculative foreign exchange trade on derivative financial instruments is prohibited.

Sensitivity analysis for a 5% change in exchange rate of the functional currency against each foreign currency on profit

before income tax as of December 31, 2022 is as follows.

Forei

n Exchan

e Rate Sensitivit

Forei

n Currenc

Increase b

Decrease b

(In millions of Korean Won)

USD

￦

111,585

￦

(111,585)

EUR

20,435

(20,435)

JPY

(3,585)

3,585

b) Interest rate risk management

The Group has borrowings with fixed or variable interest rates. Also, the Group is exposed to interest rate risk arising

from financial instruments with variable interest rates. To manage the interest rate risk, the Group maintains an appropriate

balance between borrowings with fixed and variable interest rates for short-term borrowings and has a policy to borrow

funds with fixed interest rates to avoid the future cash flow fluctuation risk for long-term debt if possible. The Group

manages its interest rate risk through regular assessments of the change in market conditions and the adjustments in nature

of its interest rates.

Sensitivity analysis for a 1% change in interest rates on profit before income tax as of December 31, 2022 is as follows.

Interest Rate Sensitivit

Accounts

Increase b

Decrease b

(In millions of Korean Won)

Cash and cash equivalents

￦

35,897

￦

(35,897)

Financial assets measured at FVPL

1,644

(1,644)

Short-term and long-term financial

instruments

15,584

(15,584)

Borrowin

s and debentures

(99,610)

99,610

The Company’s subsidiaries,

HYUNDAI CARD CO., LTD.

and

HYUNDAI CAPITAL SERVICES, INC.

, that are operating

financial business, are managing interest rate risk by utilizing value at risk (VaR). VaR is defined as a threshold value

which is a statistical estimate of the maximum potential loss based on normal distribution. As of December 31, 2022 and

December 31, 2021, the amounts of interest rate risk measured at VaR are

￦

135,241 million and

￦

182,864 million,

respectively.

Price risk

The Group is exposed to market price fluctuation risk arising from equity instruments. As of December 31, 2022, the

amounts of financial assets measured at FVPL and financial assets measured at FVOCI are

￦

57,556 million

and

￦

2,340,388 million, respectively.

Credit risk

The Group is exposed to credit risk when a counterparty defaults on its contractual obligation resulting in a financial loss

for the Group. The Group operates a policy to transact with counterparties who only meet a certain level of credit rating

which was evaluated based on the counterparty’s financial conditions, default history, and other factors.

The credit risk

in the liquid funds and derivative financial instruments is limited as the Group transacts only with financial institutions

with high credit-ratings assigned by international credit-rating agencies. Except for the guarantee of indebtedness

discussed in Note 39, the book value of financial assets in the consolidated financial statements represents the maximum

amounts of exposure to credit risk. In addition, the Company’s subsidiaries,

HYUNDAI CARD CO., LTD.

and

HYUNDAI

CAPITAL SERVICES, INC.

, that are operating financial business, assesses their credit stability according to their internal

credit ratings and manage credit risk concentrations by debtor. As of December 31, 2022, credit risk concentrations are

87% for households and 13% for companies.

Liquidity risk

The Group manages liquidity risk based on maturity profile of its funding. The Group analyses and reviews actual cash

outflow and its budget to match the maturity of its financial liabilities to that of its financial assets.

The Group retains an appropriate level of deposit to cope with uncertainty caused by the inherent nature of the industry

which is sensitive to economic fluctuation and to invest in R&D constantly.

In addition, the Group has agreements with financial institutions related to trade financing and overdraft to mitigate any

significant unexpected market deterioration. Also, the Group continues to strengthen its credit rates to secure a stable

financing capability.

The Group’s maturity analysis of its non-derivative liabilities according to their remaining contract period before

expiration as of December 31, 2022 is as follows.

Remainin

contract perio

Description

Not later than

one

Later than one year and

not later than five

ears

Later than

five

ears

Total

(In millions of Korean Won)

Non-interest-

earin

liabilities

￦

20,918,523

￦

57,047

￦

20,975,570

Interest-bearing

liabilities

40,215,791

72,730,956

7,184,077

120,130,824

Financial

uarantee

270,448

62,968

88,284

421,700

The maturity analysis is based on the non-discounted cash flows and the earliest maturity date at which payments, i.e.

both principal and interest, should be made.

(3)

Derivative instruments

The Group enters into derivative instrument contracts such as currency forwards, currency options, currency swaps and

interest swaps to hedge its exposure to changes in foreign exchange rate or interest rate.

As of December 31, 2022 and December 31, 2021, the Group recognized an accumulative net profit of

￦

183,776 million

and net profit of

￦

13,980 million, respectively, in accumulated other comprehensive profit or loss, for effective cash

flow hedging instruments.

The longest period in which the forecasted transactions are expected to occur is within 111 months as of December 31,

2022.

For the years ended December 31, 2022 and 2021, the Group recognized a net profit of

￦

391,801 million and net loss of

￦

675,508 million in profit or loss (before tax), respectively, which resulted from the ineffective portion of its cash flow

hedging instruments and changes in the valuation of its other non-hedging derivative instruments and others.

In addition, the Company’s subsidiaries,

HYUNDAI CARD CO., LTD.

and

HYUNDAI CAPITAL SERVICES, INC.

, that are

engaged in financial services business, use interest rate swaps and currency swaps to hedge the risks of future cash flows,

which related to borrowings, debentures and others, due to market interest rate fluctuations and exchange rate fluctuations.

As of December 31, 2022, the average hedge ratio is 100%.

38.

RELATED-PARTY AND OTHER TRANSACTIONS:

The transactions and balances of receivables and payables within the Group are wholly eliminated in the preparation of

consolidated financial statements of the Group.

(1)

For the year ended December 31, 2022, significant transactions arising from operations between

the Group

and

related parties or affiliates by the Monopoly Regulation and Fair Trade Act of the Republic of Korea (“the

Act”)

are as follows.

Description

Sales/proceeds

Purchases/expenses

Sales

Others

Purchases

Others

(In millions of Korean Won)

Entity with

significant

influence over

the Company

and its

subsidiaries

undai MOBIS Co., Ltd.

￦

617,886

￦

15,569

￦

12,246,389

￦

74,457

Mobis Alabama, LLC

175,677

152

1,952,641

6,392

Mobis Automotive Czech s.r.o.

745

2,441,059

24,371

Mobis India, Ltd.

15,783

3,237

1,310,317

3,340

Mobis Parts America, LLC

173,649

4,140

1,528,014

825

Mobis Module CIS, LLC.

376

88,339

2,791

Mobis Parts Europe N.V.

18,037

1,993

622,583

1,064

Others

68,863

1,480

1,499,679

9,582

Joint ventures

and associates

Kia Corporation

1,344,334

781,710

576,677

749,322

Kia Russia & CIS, LLC

236,563

Kia Slovakia s.r.o..

106,675

338

706,944

1,751

Kia Geor

ia, Inc.

850,880

1,017

BHMC

243,336

28,184

HMGC

27,747

1,773

44,864

52,023

undai WIA Corporation

119,339

913

1,039,973

10,837

Others

838,127

65,143

5,922,155

2,079,207

Other related parties

21,567

3,755

2,531

Affiliates b

the Ac

838,319

121,880

10,962,515

1,152,633

For the year ended December 31, 2021, significant transactions arising from operations between the Group and related

parties or affiliates by the Act are as follows.

Description

Sales/proceeds

Purchases/expenses

Sales

Others

Purchases

Others

(In millions of Korean Won)

Entity with

significant

influence over

the Company

and its

subsidiaries

undai MOBIS Co., Ltd.

￦

546,326

￦

141,828

￦

9,189,407

￦

80,346

Mobis Alabama, LLC

200,423

1,296,680

47,303

Mobis Automotive Czech s.r.o.

501

1,948,940

12,268

Mobis India, Ltd.

12,150

2,664

1,060,774

2,263

Mobis Parts America, LLC

111,115

3,564

1,067,076

1,140

Mobis Module CIS, LLC.

315

419,772

Mobis Parts Europe N.V.

16,986

1,450

473,989

746

Others

62,109

1,788

1,120,565

8,564

Joint ventures

and associates

Kia Corporation

1,167,895

726,215

732,297

786,682

Kia Russia & CIS, LLC

994,790

112

Kia Slovakia s.r.o..

97,731

281

671,653

Kia Geor

ia, Inc.

617,122

1,518

292

BHMC

321,700

115,309

18,080

HMGC

37,287

1,299

103,139

63,877

undai WIA Corporation

135,431

1,605

1,280,719

14,515

Others

728,094

64,383

4,505,972

1,816,502

Other related parties

16,780

14,627

3,927

Affiliates b

the Ac

769,822

118,065

8,566,617

922,130

(2)

As of December 31, 2022, significant balances related to the transactions between the Group and related

parties or

affiliates by the Act are as follows.

Description

Receivables (*1,2)

Payables

Trade notes

and accounts

receivable

Other

receivables

and others

Trade notes

and accounts

able

Other

payables

and others

(In millions of Korean Won)

Entity with

significant

influence over

the Company

and its

subsidiaries

undai MOBIS Co., Ltd.

￦

112,072

￦

186,427

￦

2,631,460

￦

453,605

Mobis Alabama, LLC

22,829

148,988

411

Mobis Automotive Czech s.r.o.

9,924

240,666

Mobis India, Ltd.

1,462

176,609

Mobis Parts America, LLC

19,635

113,577

Mobis Module CIS, LLC

804

Mobis Parts Europe N.V.

359

1,328

49,254

Others

21,772

949

115,791

6,847

Joint ventures

and associates

Kia Corporation

483,663

383,401

103,109

111,663

Kia Russia & CIS, LLC

Kia Slovakia s.r.o.

6,018

163

55,100

319

Kia Geor

ia, Inc.

59,925

33,682

30,404

Kia America, Inc.

10,568

19,943

BHMC

272,134

14,411

HMGC

7,738

23,734

5,133

23,306

undai WIA Corporation

33,157

7,449

171,098

28,850

Others

169,169

125,220

699,974

1,058,827

Other related parties

1,742

344

Affiliates b

the Ac

181,415

68,799

1,242,171

423,944

(*1) The Group has recognized the loss allowance for the related parties' receivables in the amount of

￦

958 million as of December 31,

2022 and the

impairment loss is recognized in the amount of

￦

749 million for the year ended December 31, 2022.

(*2) As of December 31, 2022, outstanding payment of

￦

23,592 million of corporate purchase card agreement provided by HYUNDAI

CARD CO., LTD. is included. For the year ended December 31, 2022, amount used and repayment of agreement are

￦

426,510 million

and

￦

425,013 million, respectively.

As of December 31, 2021, significant balances related to the transactions between the Group and related parties or

affiliates by the Act are as follows.

Description

Receivables (*1,2)

Payables

Trade notes

and accounts

receivable

Other

receivables

and others

Trade notes

and accounts

able

Other

payables

and others

(In millions of Korean Won)

Entity with

significant

influence over

the Company

and its

subsidiaries

undai MOBIS Co., Ltd.

￦

92,116

￦

301,436

￦

1,687,603

￦

466,862

Mobis Alabama, LLC

14,344

108,355

Mobis Automotive Czech s.r.o.

901

194,217

Mobis India, Ltd.

1,370

123,770

Mobis Parts America, LLC

31,309

101,750

Mobis Module CIS, LLC

50,666

Mobis Parts Europe N.V.

550

118

47,095

Others

11,339

491

101,671

6,947

Joint ventures

and associates

Kia Corporation

328,668

335,571

84,505

121,814

Kia Russia & CIS, LLC

134,733

Kia Slovakia s.r.o.

6,832

279

46,186

205

Kia Geor

ia, Inc.

91,109

64,378

11,120

96,639

Kia America, Inc.

149,910

BHMC

199,426

13,626

12,344

414

HMGC

6,019

21,752

4,479

37,996

undai WIA Corporation

31,147

920

185,022

28,048

Others

209,556

69,666

679,046

920,138

Other related parties

710

Affiliates b

the Ac

154,455

61,484

905,856

351,422

(*1) The Group has recognized the loss allowance for the related parties' receivables in the amount of

￦

209 million as of December 31,

2021 and the reversal of impairment loss is recognized in the amount of

￦

56 million for the year ended December 31, 2021.

(*2) As of December 31, 2021, outstanding payment of

￦

22,096 million of corporate purchase card agreement provided by HYUNDAI

CARD CO., LTD. is included. For the year ended December 31, 2021, amount used and repayment of agreement are

￦

383,299 million

and

￦

406,133 million, respectively.

(3)

Significant fund transactions and equity contribution transactions for the year ended December 31,

2022, between

the Group and related parties are as follows.

Loans

Borrowin

Equit

Description

Lendin

Collection

Borrowin

Repa

men

contribution

(In thousands of USD Dollar and Chinese Yuan, In millions of Korean won)

Joint ventures and associates

￥

15,000

612,000

600,000

￦

2,002,648

￦

520

￦

4,252

Significant fund transactions and equity contribution transactions for the year ended December 31, 2021, between

the Group and related parties

are as follows.

Loans

Borrowin

Equit

Description

Lendin

Collection

Borrowin

Repa

men

contribution

(In millions of Korean won)

Joint ventures and associates

￦

7,600

￦

313,720

For the years ended December 31, 2022 and 2021, the Group received dividends of

￦

503,634 million and

￦

209,957

million from related parties and affiliates by the Act, respectively and paid dividends of

￦

349,958 million and

￦

322,421 million to related parties, respectively. During 2022, the Group traded in other financial assets and others of

￦

1,710,000 million with HYUNDAI MOTOR SECURITIES Co., Ltd., an associate of the Group.

The Group has

other financial assets of

￦

315,000 million in the consolidated statement of financial position as of December 31, 2022.

For the year ended December 31, 2021, HYUNDAI MOTOR SECURITIES CO., Ltd., an associate of the Group,

acquired bonds issued by the consolidated entities,

HYUNDAI CAPITAL SERVICES, INC.

and

HYUNDAI CARD CO.,

LTD.

in amount of

￦

10,000 million and

￦

20,000 million respectively, and there are no acquired bonds for the year

ended December 31, 2022.

(4)

Compensation of registered and unregistered directors, who are considered to be the key management

personnel

for the years ended

December 31, 2022 and 2021 are as follows.

Description

2022

2021

(In millions of Korean Won)

Shor

-term emplo

ee salaries

￦

348,368

￦

296,733

Retirement benefit costs

53,146

48,906

Other lon

-term benefits

1,289

1,209

￦

402,803

￦

346,848

(5)

For the year ended December 31, 2022, the Group offer payment guarantee to related parties and affiliates by the

Act.

39.

COMMITMENTS AND CONTINGENCIES:

(1)

As of December 31, 2022, the debt guarantees provided by the Group, excluding the ones provided to the

Company’s subsidiaries are as follows.

Description

Domestic

Overseas (*)

(In millions of Korean Won)

To associates

￦

28,910

￦

211,491

To others

3,558

209,224

￦

32,468

￦

420,715

(*)

The guarantee amounts in foreign currencies are translated into Korean Won using the Base Rate announced by Seoul Money

Brokerage Services, Ltd. as of December 31, 2022.

(2)

As of December 31, 2022, the Group is involved in domestic and foreign lawsuits as a defendant. In addition, the

Group is involved in lawsuits for product liabilities and others. The Group obtains insurance for potential losses

which may result from product liabilities and other lawsuits. In addition, as of December 31, 2022, the Group is

under investigation by related authorities in relation to the theta 2 engine recall and others, and its results and impacts

are unpredictable. The Group is unable to estimate the outcome of the lawsuits and the amount and timing of outflows

of resources are uncertain. The Group does not expect the impact on the consolidated financial statements to be

significant.

(3)

As of December 31, 2022, a substantial portion of the Group’s PP&E is pledged as collateral for various loans and

leasehold deposits up to

￦

782,803 million. In addition, the Group pledged certain

bank

deposits,

checks

and

promissory notes, including 213,466 shares of Kia Corporation, as collateral to financial institutions and others.

Certain receivables held by the Company’s foreign subsidiaries, such as financial services receivables are pledged

as collateral for their borrowings.

(4)

As of December 31, 2022, the Group has overdrafts, general loans, and trade-financing agreements with numerous

financial institutions including Kookmin Bank, with a combined limit of up to USD 30,000 million, and

￦

5,985,200

million.

(5)

As of December 31, 2022,

HYUNDAI CAPITAL SERVICES, INC.

and

HYUNDAI CARD CO., LTD.

have entered into

agreements for certain borrowings including trigger clauses for the purpose of credit enhancement. If the credit rating

HYUNDAI CAPITAL SERVICES, INC.

and

HYUNDAI CARD CO., LTD.

falls below a certain level, this may result

in early repayment of the borrowings or termination of the contracts.

(6)

As of December 31, 2022, the Company has a shareholder agreement with investors of third parties regarding shares

HYUNDAI CARD CO., LTD.

and Hyundai Commercial Inc. This includes the call options that allow the Company

to buy shares from the investors and the put options that allow the investors to dispose of the shares to the Company.

(7)

In December 2019, the Company entered into an agreement to invest

￦

1,408,220 million in the construction of new

Global Business Centre (GBC). As of December 31, 2022, the Company has recognized relevant liability in the

amount of

￦

921,278 million in accordance with the agreement with the Seoul government to implement public

contributions relating to the new construction project.

(8)

Financial instruments with restricted use for the years ended

December 31, 2022 and 2021 are as follows.

Description

December 31, 2022

December 31, 2021

(In millions of Korean Won)

Short-term and long-term financial

instruments

￦

1,464,888

￦

1,694,904

Cash and cash equivalents

631,954

225,731

Other financial assets

￦

2,096,844

￦

1,920,637

40.

SEGMENT INFORMATION:

(1)

The Group operating segments include vehicle segment, finance segment and others segment. The vehicle segment

is engaged in the manufacturing and sale of motor vehicles. The finance segment operates vehicle financing, credit

card processing and other financing activities. Others segment includes the R&D, train manufacturing and other

activities.

(2)

Sales and operating profit by operating segments for the years ended December 31, 2022 and 2021 are as follows.

For the

ear ended December 31, 2022

(*1) Operating profit of the vehicle segment include internal transaction adjustments.

(*2) Net sales represent sales from external customers.

For the

ear ended December 31, 2021

Vehicle

(*1)

Finance

Others

Total

(In millions of Korean Won)

et sales

(*2)

￦

94,143,019

￦

16,782,412

￦

6,685,195

￦

117,610,626

Operatin

profit

4,155,765

2,195,377

327,807

6,678,949

Inte

-compan

sales

(52,033,375)

(318,479)

(1,352,273)

(53,704,127)

(*1) Operating profit of the vehicle segment include internal transaction adjustments.

(*2) Net sales represent sales from external customers.

(3)

Assets and liabilities by operating segments as of December 31, 2022 are as follows.

December 31, 2022

Vehicle

Finance

Others

Consolidation

ustments

Total

(In millions of Korean Won)

Total assets

￦

133,885,205

￦

135,124,336

￦

9,793,550

￦

(23,060,629)

￦

255,742,462

Total liabilities

58,838,578

117,649,362

5,910,506

(17,552,529)

164,845,917

Borrowin

s and debentures

9,983,190

107,328,133

2,225,394

(7,350,897)

112,185,820

Vehicle

(*1)

Finance

Others

Total

(In millions of Korean Won)

et sales

(*2)

￦

113,718,058

￦

20,037,912

￦

8,771,565

￦

142,527,535

Operatin

profit

7,393,480

1,844,571

581,718

9,819,769

Inte

-compan

sales

(67,688,701)

(268,245)

(1,666,746)

(69,623,692)

Assets and liabilities by operating segments as of December 31, 2021 are as follows.

December 31, 2021

Vehicle

Finance

Others

Consolidation

ustments

Total

(In millions of Korean Won)

Total assets

￦

121,826,011

￦

120,951,619

￦

8,836,191

￦

(17,667,406)

￦

233,946,415

Total liabilities

54,135,289

104,597,059

5,199,761

(12,601,483)

151,330,626

Borrowin

s and debentures

12,568,592

96,734,509

2,569,958

(4,079,781)

107,793,278

(4)

Sales by region based on where the Group’s entities are located for the years ended December 31, 2022 and 2021

are as follows.

For the

ear ended December 31, 2022

Korea

North

America

Asia

Euro

Others

Total

(In millions of Korean Won)

Net sales

￦

44,725,966

￦

55,941,024

￦

15,594,336

￦

22,117,832

￦

4,148,377

￦

142,527,535

For the year ended December 31, 2021

Korea

North

America

Asia

Euro

Others

Total

(In millions of Korean Won)

Net sales

￦

41,332,243

￦

40,750,484

￦

11,390,768

￦

21,508,735

￦

2,628,396

￦

117,610,626

(5) Non-current assets by region where the Group’s entities are located in as of December 31, 2022 and December 31,

2021 are as follows.

Description

December 31,

2022

December 31,

2021

(In millions of Korean Won)

Korea

￦

33,935,698

￦

33,323,986

orth America

3,211,607

2,967,662

Asia

2,835,528

2,781,728

Europe

2,012,856

2,254,395

Others

623,992

520,729

42,619,681

41,848,500

Consolidation ad

ustments

(219,664)

(301,775)

Total (*)

￦

42,400,017

￦

41,546,725

(*)

Total amount is the same as summation of PP&E, intangible assets and investment properties.

(6)

There is no single external customer who represents 10% or more of the Group’s revenue for the years ended

December 31, 2022 and 2021.

41.

CONSTRUCTION CONTRACTS:

(1)

Cost, income and loss and claimed construction from construction in progress as of December 31, 2022 and

December 31, 2021 are as follows.

Description

December 31,

2022

December 31,

2021

(In millions of Korean Won)

Accumulated cos

￦

14,866,771

￦

12,658,465

Accumulated income

336,083

146,975

Accumulated construction in process

15,202,854

12,805,440

Progress billing

15,006,020

12,286,456

Due from customers

1,413,886

1,421,108

Due to customers

1,217,052

902,124

Reserve (*)

77,915

79,161

(*)

Reserve is recognized as long-term trade notes and accounts receivable in the consolidated financial statements.

(2)

Effects on profit or loss of current and future periods, due from customers related to changes in accounting estimates

of total contract revenue and total contract costs of ongoing contracts of Hyundai Rotem, a subsidiary of the Company,

as of December 31, 2022 are as follows.

Description

December 31, 2022

(In millions of Korean Won)

Changes in accounting estimates of total contract revenue

￦

493,798

Changes in accounting estimates of total contract costs

513,064

Effects on profit or loss of current perio

(14,707)

Effects on profit or loss of future periods

(4,559)

Changes in due from customers

(7,202)

Provision for construction loss

38,417

Effects on profit or loss of current and future periods were calculated with estimated total contract costs and estimated

total contract revenue based on factors that are considered to be relevant from commencement of the contract to December

31, 2022. Total contract revenue and costs may change in future periods.

(3)

There is no contract as of December 31, 2022, in which contract revenue is recognized using the percentage of

completion method based on the input method, that accounted for more than 5% of the Group's revenue in the prior

period.

42.

BUSINESS COMBINATIONS:

The Group acquired 46.97% of shares in 42dot, Inc. during the year ended December 31, 2022.

The accounting for the business combination at the acquisition date is as follows.

Description

Amoun

(In millions of Korean Won)

Total considerations transferre

￦

180,380

on-controlling interests

(68,033)

Assets and liabilities acquired:

Current assets

41,468

on-curren

assets

145,159

Current liabilities

5,180

on-current liabilities

384,648

Fair value of identifiable net assets

(203,201)

Goodwill

315,548

The amounts of sales and net loss of the acquiree since the acquisition date included in the consolidated statement of

income for the year ended December 31, 2022 are

￦

1,226 million and

￦

15,855 million, respectively.

43.

SUBSEQUENT EVENT:

The Group completed stock retirement of its treasury shares on February 3, 2023 as follows.

Description

Total number of shares

December 31, 2022

(In millions of Korean Won)

Common stoc

2,136,681

￦

273,893

Preferred stoc

632,707

41,518

2022 Sustainability Report

Road to

Sustainability

Contents

Interactive PDF

This report has been published as an interactive PDF, allowing readers to move quickly and easily to pages in the report,

and including shortcuts to the related web pages.

Progress through Vision

The 2022 Hyundai Motor Company ESG Magazine illustrates Hyundai’s “Progress for Humanity”. For the irreplaceable

Earth environment, for the humanity of today, and for a sustainable future for which futures generations will be grateful,

the progress continues.

ESG Magazine

Introduction

1.1

CEO Message

1.2

Company Overview and

Major Achievements

1.3

ESG Management

1.3.1

Hyundai Motor Group’s ESG Direction

1.3.2

ESG Governance

1.3.3

ESG Performance in 2021

Environmental

2.1

Environmental Management

2.1.1

Environmental Management System

2.2

Response to Climate Change

2.2.1

Climate Change Strategies

2.2.2

Carbon Neutrality

2.2.3

Reducing Product Carbon Footprint

2.2.4

Carbon Reduction at Worksites

2.2.5

Life-cycle Carbon Reduction

2.3

Circular Economy

2.3.1

Creating a Recycling Ecosystem

2.3.2

Resources Usage in Business Sites

2.4

Strengthening the Management of

Harmful Substances

2.4.1

Management of Harmful Substances

ESG Factbook

5.1

Global Network

5.2

Business Performance

5.3

Facts & Figures

5.4

ESG Certifications

5.5

GRI Index

5.6

TCFD Index

5.7

SASB Index

5.8

WEF IBC Stakeholder Capitalism

Metrics

5.9

Stakeholder Engagement

5.10

Materiality Analysis

5.11

Independent Assurance Statement

5.12

Assurance Statement

5.13

About This Report

103

Governance

4.1

Board-centered Management

System

4.1.1

Composition of the BOD

4.1.2

Operation of the BOD

4.1.3

BOD Subcommittees

4.1.4

Protecting Shareholder Rights

4.2

Business Ethics & Compliance

4.2.1

Ethical Management

4.2.2

Compliance Management

4.2.3

Fair Trade

4.3

Risk Management

4.3.1

Risk Management

Social

3.1

Employees

3.1.1

Strategic HR Management

3.1.2

Great Workplace Culture

3.1.3

Industrial Health and Safety

3.1.4

Human Rights Management

3.2

Suppliers

3.2.1

Win-win Growth

3.2.2

Supply Chain ESG

3.3

Customers

3.3.1

Product Quality and Safety

3.3.2

Customer Experience Innovation

3.4

Social Contribution

3.4.1

CSV Initiative

3.4.2

CSV Activities

CEO Message

“Progress for Humanity”

We connect possibilities to our daily lives through our ceaseless innovations and commitment.

2021 was a difficult year for everyone, including Hyundai Motor

Company. The world’s economic recovery was tempered by the

resurgence of the COVID-19 pandemic, the worldwide supply

shortage of semiconductors and the rising price of raw materials and

logistics outlays.

Even amid such a challenging environment, Hyundai Motor

Company managed to progress steadily while delivering tangible

results. This was possible with our steadfast efforts to secure a

competitive edge that created economic value; with our focus on

quality management that increased our customer value; and with our

corporate citizenship that promoted various social values.

First and foremost, we minimized production discrepancies through

flexible production and sales operations. Furthermore, we achieved

global sales of 3.9 million units and an operating profit margin of

5.7 percent through improved profitability and cost efficiency. Last

year was also momentous in terms of Hyundai Motor Company’s

transition to electrification. We launched our first-ever dedicated EV

platform, the E-GMP (Electric-Global Modular Platform),

thereby

securing competitiveness in electrification. Based on the E-GMP,

we launched the all-electric compact crossover IONIQ 5 and the all-

electric subcompact luxury crossover GV60, which helped boost our

EV sales to 141,000 units in 2021, a 44 percent year-on-year increase.

Alongside these advances, we set a goal of reaching an annual sales

volume of 1.87 million EVs by 2030. In order to achieve this goal, we

will secure a qualitatively differentiated product competitiveness

and strengthen our lineups; establish a stable battery procurement

process and develop next-generation high-performance batteries;

and create a software strategy that will enable us to swiftly

incorporate various new technologies.

For the purpose of further solidifying the trust of our customers, we

have steadily sharpened our focus on improving the quality of our

products, solutions and services, which significantly elevated the

industry recognition of Hyundai Motor Company.

We will communicate more transparently.

We will strengthen our ESG data management system, which forms

the most fundamental aspect of any ESG management, and further

raise the quality of our information disclosure. By establishing more

accurate and efficient ESG data management processes, we will

more rigorously comply with various ESG information disclosure

guidelines both at home and abroad; enhance transparency of our

operations; and invigorate communication with diverse stakeholders.

We will work on internalizing ESG management.

We will raise our employees’ awareness of the importance of

ESG management and align our diverse ESG-related items with

the performance objectives of our businesses. By doing so, we

will proactively discover areas that can be improved upon and

implement appropriate related actions.

As indicated above, Hyundai Motor Company will not waver

in our quest to progress towards a sustainable future.

Like the proverbial phrase, “If you want to travel fast, travel alone, but if you

want to travel afar, then go on a journey with companions,” Hyundai will

always move forward in tandem with our customers and partners on our

shared journey towards a sustainable world.

On this meaningful exploration of our potentials and possibilities, I would

like to cordially ask for your continued interest and support, for the benefit

of our shared humanity and boundless progress.

Thank you.

Sincerely,

As a leading example, the U.S. News & World Report included five

Hyundai models across its 11 vehicle categories at the “2022 Best

Cars for the Money Awards.” Also, the IONIQ 5 was named the “World

Car of the Year” at the 2022 World Car Awards as well as the “2022

German Car of The Year.”

On ESG (Environmental, Social and Governance) management, we

identified existing shortcomings and undertook various activities to

rectify them, with the goal of better fulfilling our corporate citizenship

and responsibilities.

In the area of environment, we declared our goal to achieve carbon

neutrality by 2045, and joined the global renewable energy initiative

RE100. In the area of society, we strengthened human rights

management; improved the safety and health of our employees;

and bolstered ESG-oriented management of our supply chains and

expanded support for the supply chains. In governance, we made

various substantive efforts to enhance our corporate governance.

We expanded the role and authority of the former Corporate

Governance and Communication Committee, replacing it with the

Sustainability Management Committee; to strengthen the expertise

and diversity of the committee directors, we created a guideline for

appointing directors.

On the back of these efforts, Hyundai Motor Company was proudly

listed on the Dow Jones Sustainability World Index by S&P Global,

an honorable recognition of our efforts to fulfill our external social

responsibilities.

We are now entering an era of “stakeholder capitalism,” in which

all stakeholders, including shareholders, employees, customers,

suppliers and local communities, pursue sustainable growth. To

better respond to the paradigm change, we will further strengthen

our ESG capabilities by applying the following objectives.

JaeHoon Chang

President and CEO, Hyundai Motor Company

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Dear valued customers, partners and friends,

It’s a true pleasure to share our Sustainability Report for this year with you.

Company Overview and Major Achievements

Hyundai Motor Company has been providing customers with the best products and services possible ever since its establishment in 1967. In 2021, we were included in the DJSI World Index and are achieving an excellent

performance in other external sustainability management evaluations as well. Going forward, we will enhance sustainability management, thereby positioning ourselves as “smart mobility solution provider”.

* As of the end of 2021; Based on K-IFRS consolidated financial statements

* As of the end of 2021

General Information

Global Production and Sales in 2021

(Unit: Vehicles)

Sustainability Management Performance in 2021

Credit Ratings

Baa1

Moody’s

BBB+

S&P

AA+

NICE Investors Service

PRODUCTION

SALES

Domestic

1,620,231

Overseas

2,249,544

TOTAL ASSETS

SALES REVENUE

2021 Best-selling Models

(Unit: Vehicles)

505,967

391,899

277,536

190,833

168,878

Tucson

Elantra (AVANTE)

Santa Fe

Accent

Sonata

3,869,775

TOTAL

Domestic

726,838

Overseas

3,163,888

3,890,726

TOTAL

Classification

Performance

Institution

Dow Jones

Sustainability

Indices (DJSI)

•

Included in DJSI World Index

•

Included in DJSI Korea Index

since 2019

Carbon

Disclosure

Project (CDP)

•

Climate Change B Score

•

Water A- Score

Chinese

Academy of

Social Sciences’

CSR Assessment

(CASS-CSR)

• Ranked first in automotive

company category for

the sixth consecutive year

in China’s Corporate Social

Responsibility Development

Index Evaluation

iF Design Award

• Received 2021 iF Design

Award for 2020 Hyundai

Motor Sustainability Report in

Communications category

233,946.4

billion

KRW

117,610.6

billion

KRW

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

ESG Management

Hyundai Motor Group’s ESG Direction

In March 2022, Hyundai Motor Group revealed “The Right Move for the Right Future”, which embodies the Group’s

ESG management commitment and mid- to long-term direction.

The Group also made known its commitment – a sustainable future is an obligation we should pursue for the next

generation and a basic right that everyone on Earth should be able to enjoy, and we will lead the right move through

the right action for a desirable future that everyone dreams of.

In addition, the Group disclosed three major mid- to long-term directions – Move for Our Planet, ‘Move for Our

People, ‘Move for Our Community – and 15 key management areas to put this commitment into action.

In line with the Group’s directions, Hyundai will continue the right movement to create a sustainable future for the

Earth’s environment and all stakeholders.

The Right Move

for the Right Future

Move

Hyundai Motor Group has been helping people to “move” and

creating the world’s “movement” since its founding. “Move” is

therefore a heritage of the Group and it also services as a pivot that

connects the past, present, and future into one.

Right

Hyundai Motor Group thinks and acts in a “right” way in the pursuit

of progress for sustainable environment and humanity. “Right”

therefore symbolizes the Group’s sustainable philosophy.

Move for

Our Planet

Global Environment

The Right Move

for Our Planet

Internal Stakeholders

The Right Way

for Our Growth

External Stakeholders

The Right Change

for Our Society

•

Carbon Neutrality & Energy Transition

•

Circularity

•

Clean Tech Products & Services

•

Operational Eco-efficiency

•

Natural Capital Conservation

•

Diversity & Inclusion

•

Human Right

•

Corporate Culture Innovation

•

Talent Growth Experiences

•

Occupational Health & Safety

•

Social Impact

•

Customer Experience Innovation

•

Product Quality & Safety

•

Sustainable Supply Chain

•

Job Creation for the Future

Move for

Our Community

Move for

Our People

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

ESG Governance

Hyundai is strengthening management activities to preemptively identify and remove risk factors related to ESG, and

explores new business opportunities and strives to secure a new competitive edge by strategically using various ESG factors.

In particular, based on ESG governance that we newly established in 2020, discussions on major pending issues take

place on a semi-annual basis at the Sustainability Management Committee under the BOD, which is the highest

decision-making body, and the ESG Committee. In addition, we encourage each organization to autonomously carry

out ESG improvement activities, such as by establishing a performance goal for each working-level division and

reflecting the performance in KPIs, thereby striving to internalize corporate-wide ESG management.

Amid growing importance of responding to climate change and preventing accidents both in Korea and abroad,

we created the Carbon Neutrality Execution Team and Serious Accident Prevention Team, and established a more

professional and systematic management/response system.

Secretary: Planning & Finance Division

(Sustainability Management Team)

Hyundai Motor

Group ESG Council

• BOD operation

• Ethical management

Governance (G)

BOD (Sustainability Management Committee)

ESG Council (Working-level divisions)

ESG Committee

• Human rights/HR development/

HR management

• Supply chain ESG

• Quality management/Customers

• Information protection/Innovation

• Social contributions

• Health & Safety

Social (S)

• Climate change

• Operations environment

• Product environment

• Low-carbon products

Environmental (E)

1) 2)

Created organizations in charge (Carbon Neutrality Execution Team, Serious Accident Prevention Team, etc.)

• Strengthens the ESG management system, such as establishing

major ESG policies and discussing improvement plans

• Examines/supervises plans and execution in relation to major issues,

including safety, health, and ethics

• Reports and deliberates/decides on major pending issues related to

ESG on a semi-annual basis

* Major agenda in 2021: Carbon neutrality strategies, social contribution activity details,

examination of employee practice of Code of Ethics, matters related to compliance

program implementation and execution plan, compliance support activity details,

progress with health & safety plans, product/service trading with affiliates, etc.

• A small meeting group within the Hyundai Business Strategy Meeting.

Top management in each area review/discuss ESG-related matters.

• Establish/advance the system

- Establish a reporting system, set up ESG management indexes,

and build a data platform, etc.

• Internalize ESG management

- Provide support for employee ESG training and KPI reflection, etc.

• Induce/implement improvement activities

- Handle collaboration/mediation to identify matters that require

improvement and implement improvement activities, etc.

• Disclose information/communicate

- Sustainability Report publication, ESG evaluation responses,

stakeholder communication, etc.

• Discuss the improvement direction of each division, implement

improvement activities, and share improvement performance

BOD (Sustainability Management Committee)

ESG Committee

Secretary (ESG-dedicated division)

- Planning & Finance Division (Sustainability Management Team)

ESG Council (Working-level divisions)

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

ESG Performance in 2021

ENVIRONMENTAL

• Declared and received the approval for the joining of

RE100 initiative

- Developed a roadmap to replace electrify used at

business sites with renewable energy by 2045

• Declared 2045 net zero

- Set strategies for vehicle electrification, hydrogen

business synergy, carbon neutrality at business sites,

encouraging auto-part supply chains to achieve carbon

neutrality, and social carbon reduction

• Focused on eco-friendly new business based on

second life batteries

Propelled energy storage system (ESS) based on

second life batteries and EV batteries remanufacturing

businesses for aftersales support, and established a

foundation for rare metal recycling system

•

Recorded annual eco-friendly vehicle sales of 422,000

units in 2021

- Recorded 150,000 units of annual global sales of EVs

and FCEVs in 2021

SOCIAL

• Strengthened workplace safety

- Appointed a Chief Safety Officer (CSO)

• Strengthened supply chain ESG management

- Conducted a written assessment of 400 tier-1 and

core tier-2 suppliers and an onsite due diligence of

10 high-risk suppliers

• Expanded the scope of employee human rights

risk management

- Conducted a human rights impact assessment on

employees at overseas business sites in Europe,

Americas, India, and China

• Provided ESG-related in-house training

- Provided 7,980 hours of on/offline trainings a year in

areas of human rights, safety, environment, and quality

- Provided online education on ESG mindset to

22,000 staff in general/research/legal positions

GOVERNANCE

• Operated the Sustainability Management Committee

under the BOD

- Strengthened the ESG system, such as establishing

major policies related to ESG and discussing

improvements

• Enhanced BOD diversity

- Appointed a director with a foreign nationality

(global business field) and a female director

(field of guaranteeing stability of intelligent

transportation systems)

• Strengthened shareholder communication

- Provided an online real-time broadcasting service for

shareholders who couldn’t attend in person

- Held a presentation on areas of interest of shareholders

(General shareholder’s meeting in March 2021 –

Automobile market outlook)

• Provided compliance training

- Provided compliance training 11 times to employees

in Korea (21,567 persons attended) and 9 times to

overseas employees (80 persons attended)

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Environmental

Hyundai is committed to innovation for people and the

planet in the hope and belief that the basic value of human

mobility will be realized in a way that does not burden

the earth, while striving to minimize the environmental

impact of Hyundai’s value chain. In particular, we will

take the lead in achieving carbon neutrality that is

healthy, inclusive, and eco-friendly, thereby reaching

beyond mobility innovation to build a circular economy

ecosystem and thus creating a sustainable future for all.

2.1

Environmental Management

2.2

Response to Climate Change

2.3

Circular Economy

2.4

Strengthening the Management of Harmful Substances

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Environmental Management System

Hyundai has established environmental management policies and principles, in order to minimize the negative environmental

impacts of its corporate activities, and constantly updates them to meet the rapidly changing business environment and

the diverse environmental management needs of stakeholders. In addition, we have set a governance system required

to implement environmental management and are striving to identify and manage major environmental issues through

close and regular communication with stakeholders. Major activities and decision-making issues related to improving our

environmental performance are regularly discussed at the ESG Committee, in which the top management participates, and at

the Sustainability Management Committee, a BOD subcommittee.

Environmental Management

Environmental Management Policy

In June 2022, Hyundai revised its environmental policy in its continuous

efforts to improve environmental performance through eco-friendly

management, and to minimize negative environmental impact throughout

the entire value chain. The employees of Hyundai’s domestic headquarters

and business sites, overseas subsidiaries, subsidiaries, etc. are subject to this

environmental policy. In addition, we recommend this environmental policy

to stakeholders such as suppliers and business partners including joint

ventures, outsourcing partners, and service providers.

Environmental Management Principles

Upon implementing its environmental management policy, Hyundai complies

with the following principles – 1) complying with environmental laws and

regulations; 2) declaring environmental management implementation

policies; 3) establishing an environmental management system and adopting

internal management standards; 4) monitoring environmental performance;

5) identifying risks and developing tasks; and 6) operating processes

designed to improve environmental performance. Our environmental

management-related organizations periodically reflect any revisions of

the laws and regulations, changes in social issues, and the peculiarities of

corporate environment so as to keep implementation measures up-to-date.

Implementation of Environmental Management System

Hyundai assesses the impacts of its value chain on the environment and

associated risks through its environmental management system, and

manages environmental management performance on a systematic

basis, thereby minimizing negative environmental impacts of its value

chain including products and business sites. Regarding products, the

company’s R&D Center has taken the lead in promoting the reduction of

carbon and harmful tailpipe emissions by new cars, the development of

material recycling technologies, the minimization of the content of harmful

substances in products, and the development of electrified vehicles.

In particular, to reduce carbon and harmful tailpipe emissions from new

models, Hyundai is applying the “eco-design”, whereby it manages fuel

efficiency improvement and harmful tailpipe reduction as major goals in the

new model development process. We also apply the life cycle assessment

(LCA) based on ISO 14040 & 14044, having established different LCA

processes for internal combustion engine vehicles (ICEVs), EVS and FCEVs

since they have different value chains. These efforts have been enabling us

to improve the environmental-friendliness of our new models.

Basic Principles of the Environmental Management Policy

Classification

Basic principles

Classifica

ㅁ

tion

Basic principles

1. Raw materials

Efficient use of raw materials

5. Waste

Waste treatment tracking and management

Reuse of production waste in the production cycle

Waste recycling

Traceability of raw material production sites

Waste upcycling

2. Energy

Promotion of energy reduction

6. End-of-life

products

Disclosure of end-of-life product recovery information

Introduction of renewable energy

Recovery of end-of-life products

Operation of energy management systems

Recycling of end-of-life products

3. Water

Water recycling

7. Environmental

pollutants

Reduction of air pollutants

Water storage

Reduction of water pollutants

Traceability of water sources

Reduction of harmful substances

4. Greenhouse

Gas

Reduction of GHG emissions at business sites

Reduction of value chain GHG emissions

Reduction of GHG emissions due to products and services

Status of ISO 14001 (EMS) Certification

Site

Certification term

Remarks

Domestic sites

2020-2023

Integrated certification from 2014

Hyundai Motor Manufacturing Alabama (HMMA)

2021-2024

Beijing Hyundai Motor Company (BHMC)

2021-2024

Hyundai Motor India (HMI)

2020-2023

Hyundai Motor Manufacturing Russia (HMMR)

2019-2022

Hyundai Motor Brasil (HMB)

2021-2024

Hyundai Motor Manufacturing Czech (HMMC)

2021-2024

Hyundai Assan Otomotive Sanayi (HAOS)

2021-2024

Hyundai Motor Manufacturing Indonesia (HMMI)

Plan to be certified in 2022

Began operations in January 2022

Hyundai Truck & Bus China (HTBC)

2020-2023

ESG Magazine

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4. Governance

5. ESG Factbook

1. Introduction

Hyundai has formed dedicated environmental teams for each of its

production plants, and they have established an environmental management

system (EMS) that meets the ISO 14001 requirements, obtained the ISO

14001 certification, and successfully undergone a renewal audit every three

years. Hyundai Motor Manufacturing Indonesia, which began operations in

January 2022, is now in the process of acquiring the ISO 14001 certification.

Apart from the ISO audits, Hyundai’s business sites are striving to improve

their environmental management systems on a continuous basis through

regular internal inspections or external audit/verification by external

environmental experts such as TÜV SÜD.

In addition, we include the GHG reduction performances of domestic and

overseas plants in key performance indicators (KPIs), and are also operating

a company-wide Greenhouse Gas Council that oversees reductions in the

company’s GHG emissions at all its domestic sites. As an enterprise subject

to the requirements of the Korean government’s GHG and Energy Target

Management Scheme, we set the GHG reduction targets of our domestic

business sites based on the annual GHG quota allocated by the Korean

government and act on them vigorously.

Hyundai Motor Company Environmental Management Policy

Management of Environmental Performance

Environmental Management Governance

Roles of the Management and BOD

Regarding the product environment, the head of the R&D Center is

responsible for efforts to reduce harmful tailpipe emissions including CO2,

use recycled materials, and develop electrified models when developing

new cars as part of constant attempts to improve the environmental

performance of our products. The Carbon Neutrality Execution Team,

established under the direct control of the CEO, takes the lead in achieving

carbon neutrality to reduce or neutralize carbon emissions in our entire

value chain, including supply chain, as well as to reduce carbon emissions

from new models. In 2021, we appointed a Chief Safety Officer (CSO), who is

responsible for worksite environment, health and safety. Hyundai manages

environmental management risks through the ESG Committee, in which the

company’s key decision makers participate to promote and manage overall

performance improvement activities. In relation to our business operations,

mid- to long-term environmental management strategies and investment

plans for environmental management are reported and reviewed by the

BOD or the Sustainability Management Committee.

Roles of the Dedicated Environmental Organization

The main roles of the dedicated organization include all aspects related to

the implementation of environmental management system, preparations

for licenses and permits to install and operate environmental facilities,

the protection and restoration of environmental capital, the management

& reduction of pollutant emissions generated in the course of business

operations, the identification and mitigation of environmental risks, the

coordination of environmental protection measures, the registration and

resolution of environmental grievances, and external public relations.

Evaluation of Environmental Performance

As for products, Hyundai conducts annual performance management by

using such factors as average fleet fuel efficiency or CO

emissions by region

as well as sales proportion of EVs as KPIs. As for business sites, we manage

each plant’s GHG emission reduction as a KPI.

Planning and Making Environmental Investments

On the 2022 CEO Investor Day held in March 2022, Hyundai announced

its 2030 mid-to long-term electrification investment plan, accordingly

we will invest a total of KRW 19.4 trillion by 2030 to develop electrification

technology and build the relevant infrastructure. In 2021, to implement our

environmental management initiatives, we established an investment plan

worth KRW 848.9 billion, of which KRW 722.5 billion has been executed.

Environmental Issue Grievance Handling System

Hyundai operates a grievance filing process that allows its employees

and the members of other organizations (individuals) to report their

environmental-related grievances arising in the course of its business

operations. We thoroughly review the received grievances and set response

plans accordingly. The ESG Committee takes the lead in developing

countermeasures in the event that a grievance may lead to a violation of

laws and regulations or have a significant impact on the local community or

stakeholders, ultimately resulting in a risk to Hyundai’s corporate reputation.

Key Reporting Channel

Environmental Education

Hyundai provides its employees and other stakeholder with

environmental education designed to raise or improve their awareness of

the necessity of environmental management. This education course also

focuses on encouraging employees to develop an eco-friendly mindset

in the course of carrying out their work. In 2021, 47,637 employees

completed 651 hours of environmental education.

Environmental Management Goals and Performance

Armed with a commitment to protecting the global environment while

achieving sustainable progress for the future of mankind, Hyundai aims

to achieve carbon neutrality by 2045 across all phases from raw material

production to vehicle production and operations. To this end, we have set

a nu

mber of

carbon-neutral goals and worked to achieve them, as shown

in the table below.

Carbon Neutral Goals and Performance

Classification

Goal

Performance

Vehicle

electrification

Plan to sell 840,000 units by 2026, 1.87 million units by 2030

•

Sold 141,101 units in 2021, a year-on-year increase of more than 40%

(more than Hyundai’s 2021 sales target)

Achieve 100% electrification of Genesis by 2030

Achieve 100% electrification of vehicles sold in Europe by 2035

Achieve 100% electrification of vehicles sold in main markets by 2040

Hydrogen

business synergy

Expand hydrogen mobility

•

Collaborating with H2Pro to develop high-efficiency hydrogen production technology

•

Collaborating with NextHydrogen to develop a green hydrogen water electrolysis system

• Sold 9,620 units of FCEV, a year-on-year increase of 41.9%

• Gained 53.5% share of the global FCEV market

Produce and supply green hydrogen

Carbon neutrality

in our factories

Achieve RE100 by 2045

•

Renewable energy accounted for 12.8% of total electricity consumption at HMMC in 2021

•

Renewable energy accounted for 35.5% of total electricity consumption at HMI in 2021

Encouraging our

supply chain to

achieve carbon

neutrality

Reducing carbon emissions by 10% or more by 2030 and by 65% or

more by 2040 to achieve carbon neutrality by 2045

•

Conducted investigation of GHG emissions by tier-1 suppliers, and reviewed major

companies’ reduction plans

Consultation & Communication with Stakeholders on

Environmental Issues

Hyundai conducts an annual stakeholder survey to identify its

sustainability issues including the environment. We discuss our

sustainability performance and improvements through continuous

consultation and communication with investment institutions such as APG

and Hermes, and also with ESG rating providers such as Sustainalytics.

Furthermore, on the basis of consultation and communication with

industry associations (Korea Automobile Manufacturers Association,

European Automobile Manufacturers Association (ACEA), etc.),

environmental groups and government organizations (Healthy Seas,

Korea Forest Service, etc.), we present opinions and conduct eco-friendly

activities in areas related to our business.

1. Government Agencies

Hyundai shares its environmental management

performance with government agencies and proactively responds

to changes in the direction of their policies. Overseas, the company

systematically monitors and complies with each country’s environmental

laws and regulations.

2. Shareholders and Investors

Hyundai will achieve environmental

performance that meets the requirements of its shareholders and investors,

thereby building long-lasting, trusting relationships and expanding

investments aimed at improving its corporate value.

3. Supply Chain

Hyundai shares its know-how and experience in

environmental management across entire supply chain, while operating

communication channels to enable continuous consultation with its suppliers

aimed at creating environmental values throughout value chain.

4. Customers

Hyundai provides environmental information on its products

and services while reflecting opinions gathered through customer

contact

channels in the process of developing eco-friendly products and services.

5. Local Communities

To mitigate the environmental impacts of its

business operations, Hyundai collects opinions from local organizations and

public-private consultative bodies, while also striving to identify and resolve

grievances raised by local communities.

6. Employees

Hyundai shares its environmental management principles

and policies with its employees and raises their awareness of environmental

management through environmental education. The company also reflects its

employees’ proposals to improve environmental performance.

• E-mail: ESG@hyundai.com

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5. ESG Factbook

1. Introduction

Climate Change Strategies

Hyundai has established a governance system and climate risk management process to manage its climate change risks

systemically. We have set major climate change strategies through the climate change governance to analyze the potential

impact of climate change on our business and respond to macroscopic changes in the business environment caused by

changes in laws and regulations. We identify various climate risk and opportunity factors, and preemptively responds to

changing market demands through the development of eco-friendly vehicles and various mobility solution technologies.

Response to Climate Change

Climate Change Management System

Climate Change Governance

At Hyundai, the ESG Committee, composed of the company’s key decision

makers, manages matters deemed necessary to respond to climate change,

such as reviewing climate change risks, discussing countermeasures,

and evaluating the performance of climate change response initiatives. In

order to respond to climate change more actively, in 2021 we launched an

organization dedicated to promoting carbon neutrality and establishing

strategies in such areas as products, business sites, and supply chains in

collaboration with the related departments.

Climate Risk/Opportunity Management Process

Hyundai identifies, assesses, and manages risk and opportunity factors

to respond to climate change issues at the company level. The climate

change issues identified by each region/organization are submitted to

the head office’s Planning & Finance Division, which then figures out risk

and opportunity factors for each issue, assesses the strategic and financial

impacts of each factor on the company, and determines company-

wide response strategies. Material issues are reported to the BOD or top

management, and specific action plans are drawn up according to the

decisions made. The established climate change response plans and policies

are implemented by each region/organization, while the headquarters

continuously monitors their progress and makes any necessary improvements.

Climate Change Governance

Identification, Assessment, and Management Process of Climate Risk/Opportunity

Identification of

company-wide issues

related to climate

change (Planning &

Finance Division)

Identification of

issues related to

climate change by

region/organization

Climate change

scenarios

(Transition/Physical)

Identification of

risk/opportunity

factors and

assessment of

impacts

Priority check and

establishment of

response strategies

* Agenda selection for

reports to top management

Development of

action plans

Implementation by

region/organization

Monitoring and

diagnostics

Agenda review for the Hyundai

Business Strategy Meeting

(ESG Committee)

* Agenda selection for the BOD report

Review of agenda by the BOD

(Sustainability Management

Committee)

Responsible organizations

by region/business site

Purchasing Division

R&D Division

Product Division

Hyundai Business Strategy Meeting (ESG Committee, division heads or equivalents)

Planning & Finance Division (Carbon Neutrality Execution Team)

CEO

BOD (Sustainability Management Committee)

Methodology for Deriving Climate Risk/Opportunity Factors

Renewable Power Generation Costs (IRENA), Future of Solar Photovoltaic (IRENA), Annual Energy Outlook (EIA), World Energy Outlook (IEA), Energy Outlook (BP)

Goals submitted by each UN member country under the Paris Agreement in such areas as reduction, adaptation, finance, technology, capacity building, and transparency

One of four scenarios based on the GHG concentration announced in the 5th Assessment Report (ARS) of the International Panel on Climate Change (IPCC) to keep global

warming to within 2

℃

above pre-industrial levels

Scenario announced in the IPCC Special Report on the Impacts of Global Warming of 1.5°C to achieve net zero by 2050 so as to keep global warming to within 1.5

℃

above

pre-industrial levels

• Transition

Usingforecast reports from the IRENA,

EIA, IEA, and BP

and nationally

determined contributions (NDC

considering IEA B2DS and NZE 2050

• Physical

RCP 8.5 (baseline scenario),

RCP 2.6

(below 2

℃

scenario),

RCP 1.9

(1.5

℃

scenario)

• Business sites

All global operations

(including new ones, expected facility

life-cycle considered)

• Upstream activities

Purchased goods and services,

employee commuting, business travel,

etc.

• Downstream activities

Transportation, use (customers),

end-of-life treatment and recycling, etc.

Climate scenarios in use

Scenario analysis

Application timelines

Application scope

Transition

Physical

Quantitative

Qualitative

Short term

(0-3 years)

Long term (10-25 years)

Medium term

(3-10 years)

Business sites

Upstream

Downstream

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5. ESG Factbook

1. Introduction

Cases of Climate Change Risk Management

Regulatory Risk

In order to respond to climate change, Hyundai manages the laws and

regulations of various countries and regions where it operates as regulatory

risk. We faithfully comply with laws and regulations, preemptively respond to

expected regulations according to climate change scenarios, and minimize

the impact and damage.

Response to the Emission Trading System at Business Sites

Subject to the allocation of emission rights in accordance with the “Act on

the Allocation and Trading of Greenhouse Gas Emission Permits”, Hyundai

participates in the Korea Emissions Trading Scheme (K-ETS). Accordingly, if

we emit more GHGs than allocated by the law, we must purchase rights for

the shortfall or, in the event of failure to do so, pay a fine equivalent to three

times the average price of emission permits. The company’s quota for GHG

emissions in 2021 was about 1.45 million tCO

-eq.

In order to avoid financial losses due to excess carbon emissions, Hyundai

has set a more stringent reduction target than allowed by the government

while continuing to invest in GHG emissions reduction and energy

conservation programs.

Furthermore, when purchasing emission permits, we strive to minimize the

purchase cost by selecting the most optimized option based on an analysis

of transaction prices and volumes.

Transition Risk

Hyundai is making various efforts to analyze the trends in the rapidly

changing vehicle market and satisfy consumer preferences. Hyundai has

taken the lead in expanding hybrid/plug-in hybrid EVs (HEVs/PHEVs), EVs,

and fuel cell EVs (FCEVs) and occupying their markets early on, as well as

bolstering its related technology development capabilities.

Vehicle Electrification

Electrification regulations are being strengthened around the world. For

instance, the EU Commission is getting ready to introduce a carbon border

tax to reduce net GHG emissions by at least 55% compared to 1990 by 2030,

while proposing legislation to ban the sale of new ICEVs in the EU starting in

2035. Meanwhile, France has banned the sale of ICEVs starting from 2030,

and Norway has announced that it will phase out new vehicles with internal

combustion engines from 2025.

Hyundai has established a mid- to long-term roadmap for the transition

from ICEVs to EVs and has begun accelerating the relevant technology

development and EV launching. It will set up an electrified lineup for all its

commercial vehicles, including buses and heavy trucks, with high carbon

emissions by 2028 while completing electrification in Korea by 2035 and

gradually promoting 100% electrification in other regions as well. Hyundai is

preparing to expand its FCEV lineup from one to three starting in 2023, and

ultimately plans to achieve the goal of 100% electrification of all its vehicles

sold in the European market in 2035 and in other major markets by 2040.

Changing Consumer Preferences

According to the International Energy Agency (IEA), approximately 6.6

million EVs were sold in 2021, more than three times the number in 2019 (2.2

million units), indicating an intensifying trend towards eco-friendly vehicle

consumption by consumers. In line with increasing EV sales, demand for EV

batteries is growing, with an estimated rise of as much as 4,028 GWh by 2030.

Hyundai has signed a joint investment agreement with LG Energy Solution

to build a battery cell factory as part of its efforts to secure batteries of the

highest quality. We are also developing technology for the solid-state battery,

a next-generation battery, to improve the stability, mileage, and charging

time of EVs.

Physical Risks

Due to climate change, the frequency and intensity of extreme weather

events are increasing. Hyundai identifies business sites that are exposed to

short-term physical risks such as typhoons, floods, and heat waves, as well

as long-term physical risks such as changes in precipitation and sea levels, in

order to take preemptive countermeasures to physical risks.

Preparations for Extreme Weather Events

Hyundai is faced with a great physical risk as it runs a manufacturing plant in

Alabama in the southeastern part of the U.S. which is vulnerable to tornado

damages in the summer. Compared to 2010, GHG emissions are expected

to increase significantly by 2030, leading to more severe abnormal climate

events such as hurricanes and tornadoes that may hit the company’s

business in the US hard. To cope with such a situation, we have developed

emergency response manuals, purchased disaster insurance, and improved

the stability of facilities.

Preparations for Declining Average Precipitation

A decrease in average precipitation due to climate change can have a

significant impact on business operations, such as insufficient water supply

and an increase in the cost of water use. As such, Hyundai assessed the risk

of depletion of water resources at its major domestic and overseas business

sites and found that that five of them were rated as high risk, for which it is

considering building “a zero wastewater discharge system” in stages. The

Asan Plant has built wastewater reuse facilities to secure sufficient water and

reduce the amount of wastewater generation, and now reprocesses and re-

supplies all its wastewater as industrial water.

Vehicle CO

Emissions Regulations and Tax Reforms

As part of each government’s efforts to reduce GHG emissions in the

transport sector in accordance with the Paris Agreement, regulations on

emissions by new vehicles are being strengthened along with those

on corporate average fuel economy. In 2021, the European Commission

significantly increased the target of CO

emission reduction for 2030 from

37.5% to 55% compared to the 2021 level, while announcing the goal of

lowering it to 0g/km by 2035. This means that from 2035 the sale of new

vehicles with internal combustion engines will be banned in the EU market.

Apart from these regulations, major Western European countries

such as

France and Germany have long imposed an eco-friendly vehicle tax that

differentially imposes automobile taxes based on vehicles’ CO

emissions.

The Korean government has also significantly lowered the average level of

emissions for automobiles from 97g/km in 2020 to 70g/km in 2030,

while preparing to introduce an eco-friendly tax that imposes a car tax based

on CO

emissions, as is already the case in some European countries, in

order to further reduce the country’s GHG emissions in the transport sector.

If Hyundai fails to meet its CO

emissions target, it may incur significant

additional costs in proportion to its sales volume, which will lead to higher

manufacturing costs and product prices.

Hyundai is focusing on improving the fuel efficiency of the internal

combustion engine vehicles (ICEVs) of its Genesis brand and mid-to-large

SUV vehicles to respond to major countries’ tightening of the regulations on

emissions and corporate average fuel economy and changes in market

demand caused by the expansion of the automobile tax based on CO

emissions. To reduce the carbon emissions of all Hyundai products, we are

striving to improve the fuel efficiency of existing ICEVs in the short term and

develop and distribute eco-friendly vehicles in the long term.

ESG Magazine

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3. Social

4. Governance

5. ESG Factbook

1. Introduction

Key Climate Risks/Opportunities and Responses

Type

Issues

Risks

Opportunities

Response Directions

Financial Impacts

Rules and

Regulations

Current

• Emissions Trading Scheme

• Vehicle CO

emissions regulations

• Increased operating costs due to purchasing allowances/

credits to achieve regulatory or legal compliance

• Revenue generation through sale of spare allowances/credits

• Increase use of renewable energy

• Increase proportion of EV/FCEVs in vehicle portfolio

• Improve fuel efficiency of internal combustion engine vehicles

Mid

Emerging

• Prohibition of ICEV sales

• Regulatory target expanded due to the strengthening

of CBAM

of EU

• Decline in sales due to ban on sales of internal combustion

engine vehicles in developed markets like the EU and the U.S.

• Rise in costs and shifts to customers due to tax increases

• Sales increases due to enhanced EV/FCEV performance

and price competitiveness

• Cost savings in responses to regulations through energy

conversions and reductions in CO

emissions

• Establish differentiated EV expansion strategy for each region

• Increase use of renewable energy

High

Technologies

• Acceleration in competition for technology development

for eco-friendly vehicles

• Decrease in market share if not achieving superior

performances (EV mileage, FCEV fuel cell efficiency, etc.)

compared to competitors

• Preemptive response to FCEV market based on hydrogen

fuel cell technology competitiveness

• Increase investments in R&D

• Promote partnerships with companies with leading

technologies

• Implement Eco-design

High

Markets

• Increased sales of EVs and FCEVs in line with the expansion

of EV markets

• Increase in procurement costs of raw materials (lithium,

cobalt, nickel) due to limited supply following rising demand

for EV batteries

• Decrease in sales if not achieving sufficient FCEV profitability

• Achieving large potential EV/the second life EV battery

customers, including car rental/car sharing/ESS

companies

• New industrial fuel cell (ship/AAM

) business expansion

• Increased sales of EV/FCEV models

• Establish a vehicle electrification plan

• Build mass production system using dedicated EV platform

• Launch EV brand and build a dedicated lineup

• Scale up FCEV/fuel cells

High

Reputations

• Increase in demand from investors and other stakeholders

to respond to climate change

• Falls in stock prices, withdrawal of investors, and customer

churn at perceived lack of will to respond to climate change

• Rising stock prices, increasing investments, and enhancing

brand image due to climate change response activities and

reduction performances

• Aim for transparent information disclosure

• Set and implement carbon neutrality targets

• Utilize green financing and investments

Mid-high

Physical

Acute

• Increase in abnormal weather conditions, such as

typhoons/floods/heavy snowfalls

• Plant downtimes due to damage to facilities

• Production disruptions due to discontinuance of

raw materials and parts supplies

• Increased market share due to stable product supply when

compared to competitors

• Develop emergency response manual (business sites,

supply chain)

• Reinforce stability of facilities

• Buy insurance against disasters

• Develop real-time inventory management system for raw

materials and parts

• Assess suppliers’ supply stability

High

Chronic

• Changes in average temperatures and precipitation

• Lack of available resources (water/energy, etc.)

• Disruption of drinking water in areas with high water

resource risks (such as India)

• Destruction of ecosystems

• Reduced operating costs due to improved resources efficiency

• Attracting potential customers by supporting local

communities and helping them adapt to climate change

• Earning offset credits through carbon absorption

• Use water and energy more efficiently

• Develop better resource recycling and reuse technologies

• Assist in increasing supply of drinking water for the vulnerable

in developing countries

• Promote forest conservation

High

Carbon Border Adjustment Mechanism

Energy Storage System

Advanced Air Mobility

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1. Introduction

Carbon Neutral Strategy

Carbon Neutral Direction

Hyundai hopes that its vision of Progress for Humanity will be realized

in ways that the value of human mobility does not burden the planet.

In order to do the right thing for mankind and pass on a sustainable

global environment to future generations, in September 2021 we

announced our plan to achieve carbon neutrality by 2045, primarily

through electrification and establishment of the hydrogen society,

smart cities and circular economy ecosystems. Hyundai’s carbon

neutrality plan includes not only the reduction of GHG emissions

across our entire value chain, including the purchase and procurement

of raw materials and subsidiary materials, design, production, and sales

of vehicles, but also activities to reduce or offset GHG emissions from

the incidental activities necessary for business operations outside its

value chain. To this end, we manage Scope 1 and Scope 2 emissions

generated by the business sites that we owns operate and manage, while

also strengthening the management of Scope 3 emissions from indirect

activities such as upstream partners and downstream distribution

networks. Based on Scope 1, Scope 2, and Scope 3 emission data,

Hyundai will promote effective GHG reduction activities and investment

based on scientific estimation, analysis, and verification processes.

Reducing Scope 1 Emissions

Scope 1 emissions refer to GHG emitted by the company’s direct energy

use within the boundaries of business sites owned, operated and managed

by the company. Hyundai uses LNG as its main fuel to produce the heat

necessary for vehicle production and to heat its business sites, with GHG

emissions from LNG combustion accounting for a significant portion of

Scope 1 emissions.

Reducing Scope 3 Emissions

Scope 3 emissions refer to other indirect GHG emitted during the process of

providing goods and services for the company from outside the company's

boundaries and during the use of products and services supplied by the

company. Of Hyundai’s Scope 3 emissions, those emitted during the use of

sold vehicles account for the largest share (about 80%). We will therefore

not only improve the fuel efficiency of ICEVs but also shift our business

portfolio to electrification, including EVs and FCEVs, in the long t

erm as a

way to reduce emissions generated by vehicle usage. In addition, we

have set up and implemented a basic emission reduction plan for supply

chain including suppliers. We plan to reduce emissions originating from

employees’ business trips and commuting by gradually electrifying our

business vehicles. Hyundai is also reducing emissions at the disposal

stage by expanding the recycling and reuse of materials and parts from

end-of-life vehicles.

Scope 1 and Scope 2 Emissions

(Unit: tCO

-eq, tCO

-eq/Vehicle)

Classification

2019

2020

2021

Scope 1

807,498

716,237

723,966

Scope 2

1,897,885

1,680,079

1,660,238

Scope 1 + Scope 2

2,705,383

2,396,316

2,384,204

Emission intensity (GHGs emissions per vehicle produced)

0.603

0.642

0.616

Scope 3 Emissions

(Unit: tCO

-eq)

Categories

2019

2020

2021

Upstream

emissions

Supply chain (purchase of raw materials and parts)

20,024,630

17,014,155

18,359,619

Capital goods (purchase of furnishings and equipment)

265

139

Other energy-related activities (excluding Scope 1 and 2)

97,253

93,518

149,556

Waste generated in operation

2,053

1,760

1,911

Business travel

24,836

5,222

7,069

Employee commuting (commuting buses)

15,093

14,314

5,911

Downstream

emissions

Transportation and distribution (by sea and land)

954,579

655,831

838,575

Use of sold vehicles (Tank to Wheel)

3) 4)

97,941,942

81,598,073

80,887,513

End-of-life treatment of sold vehicles

(recovery, disassembly, disposal)

4) 5)

922,294

780,338

810,794

Leased assets (headquarters and leased office buildings)

4,126

3,325

804

Investments (6 affiliates)

394,946

369,926

728,902

Scope 3

120,382,017

100,536,484

101,790,793

Used a location-based method to calculate Scope 2 emissions

Based on the country where the Headquarters is located

Excluding emissions before vehicles are fueled/charged (Well-to-Tank)

Figures of previous years have been changed because the number of vehicles is now based on sales units instead of production units, and they now some completely knocked

down (CKD) units as well.

Figures of previous years have been changed as we have updated the emission factor database and applied a speciﬁc incineration emission factor to each type of material.

Carbon Neutrality

Hyundai’s vision of “Progress for Humanity” includes not only technological development for the convenience of mobility,

but also advancement for a sustainable future. Hyundai has instituted “Integrated Solutions to Climate Change” to achieve

carbon neutrality by 2045, and is striving to build a sustainable operating system for future generations by expanding its

electrification capabilities and making a successful transition to renewable energy with clean mobility, the next-generation

platform, and green energy as its core values. We will make every effort possible to achieve carbon neutrality by 2045,

including reducing our actual carbon dioxide emissions to zero through advanced responses to climate change based on

eco-friendly technologies.

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We are striving to reduce fuel consumption, such as LNG, across our global

business sites by improving the efficiency of production processes, facilities

and equipment in addition to our efforts to recover and recycle energy. In

the long term, we are planning to replace fossil fuels such as LNG with eco-

friendly energy such as green hydrogen.

Reducing Scope 2 Emissions

Scope 2 emissions refer to GHG emitted by energy purchased from outside

the boundaries of the business sites owned, operated, and managed by

the company. Scope 2 emissions from electric energy used by Hyundai’s

business sites account for about two-thirds of all Scope 1 and Scope 2

emissions. In order to convert electricity into renewable energy, we are

exploring various approaches such as the construction of renewable

energy facilities, the signing of a Power Purchase Agreement (PPA), and the

purchase of renewable energy certificates (RECs). Hyundai Motor India has

converted about 35.5% of its total electricity consumption to renewable

energy through such efforts as installing solar panels and purchasing wind

energy. We plan to expand the introduction of renewable energy in stages,

starting with production sites in regions with favorable conditions for

renewable energy generation, excellent power generation infrastructure,

or relatively low institutional constraints.

Carbon Neutrality Targets

Hyundai has announced its target to achieve carbon neutrality (Net-Zero) by

2045 in the hope that future generations will be able to breathe comfortably

and enjoy a beautiful natural environment and a sustainable global society.

Hyundai’s carbon neutrality target goes far beyond simply reducing

GHG emissions at its business sites, and aims to completely eliminate or

offset GHGs generated at all stages of its value chain, including purchase,

procurement, production, sales, use and disposal. With regard to vehicle

emissions, we aim to achieve 100% electrification in the European market

by 2035, and in other major markets by 2040. In the emerging markets, we

plan to accelerate electrification by considering consumer needs, market

conditions and infrastructure construction status. In order to reduce

GHG emissions in the process of vehicle production, we will strive for the

establishment of a cooperative system between affiliates; direct production

of renewable energy through solar panels, etc.; power purchase agreements

and renewable energy certificates (PPAs/RECs) for renewable energy; and

purchase of green premium electricity, thereby achieving RE100 (Renewable

Energy 100%) by 2045.

Hyundai will also encourage its supply chain of raw materials and parts to

achieve carbon neutrality, aimed at reducing their emissions by more than

10% by 2035, more than 65% by 2040, and carbon neutrality by 2045.

Methodology for Setting Carbon Neutrality Targets

To ascertain the current status of its GHG emissions and set carbon neutrality targets, Hyundai measures and verifies its company-wide Scope 1 and Scope 2

emissions in accordance with the GHG Protocol Corporate Standard. In addition, we measure and verify our Scope 3 emissions based on upstream-downstream

cooperation. By conducting a comprehensive review of our Scope 1-3 emissions data, the climate change forecast reports of the IRENA, EIA, IEA, and BP, as well

as the below 2

℃

scenario and the 1.5

℃

scenario, we have set a carbon reduction path – including targets for 2030, 2035, and 2040 – aimed at achieving carbon

neutrality by 2045. In the carbon neutrality and interim target setting process, we referred to the science-based target (SBT) establishment methodology to

review domestic and overseas policy and regulatory trends, changes in industrial technology development, and their relevance to our business strategies.

Five Key Areas to Achieve Carbon Neutrality

Vehicle electrification

To promote carbon zero beyond carbon reduction, Hyundai aims to achieve the shift to 100% electrification in its major markets

by 2040, after the 100% electrification in the European market by 2035. We will establish EV lineups of all our commercial vehicles including buses and large

trucks by 2028, and will gradually promote 100% electrification to other regions, starting with the Korean market in 2035. In 2023, Hyundai will begin to expand

its FCEV lineup from one to three, and we are also planning to launch a facelift for NEXO models and the STARIA-class FCEV model in the second half of 2023,

followed by the introduction of a large FCEV SUV model in 2025.

Reducing our carbon emissions at work

Hyundai strives to reduce carbon emissions generated by its automobile manufacturing processes by switching

to renewable energy, improving the energy efficiency of production processes through the application of high-efficiency motors and inverters, and using

hydrogen energy with the goal of achieving carbon neutrality at its workplaces by 2045. In particular, we have received approval of The Climate Group joining

the efforts to achieve RE100, aimed to transition to 100 percent renewable energy by 2045. Hyundai Motor India has converted about 35.5% of its total electric

energy use to renewable energy through various efforts, including the adoption of photovoltaic power generation systems and the purchase of wind power,

while Hyundai Motor Manufacturing Indonesia has installed 3.2 MW solar panels at its production plant. As for the Ulsan and Asan plants in Korea, they now

produce electricity using solar panels with a combined capacity of about 19 MW.

Support for net zero in the supply chain

Hyundai helps its suppliers not only to improve quality and make technological advances, but also to achieve

carbon neutrality. We monitor suppliers’ carbon emissions and provide them with a carbon-neutral implementation guide designed to enable them to reduce

their carbon emissions substantially. In association with our support for the suppliers’ construction of smart factories, Hyundai will continue to improve

company-wide ICT-based energy efficiency. In particular, we will join forces with the suppliers of raw materials with a high proportion of carbon emissions in a

bid to promote a joint response in conjunction with automotive design technologies, such as recycling materials and expanding the use of new materials.

Social activities for reducing carbon emissions

Hyundai monitors the market continuously and promotes technology development to commercialize

CCUS technology, which captures and processes carbon generated in the process of burning fossil fuels such as LNG. We are also committed to reducing social

carbon emissions through resource circulation, such as recycling and reusing materials from waste resources recovered from end-of-life car parts and waste

plastics collected from local communities. In addition, we are planning to offset residual carbon emissions by executing external carbon reduction projects.

Hydrogen business synergy effects

In alignment with the implementation of RE100, Hyundai aims to expand the use and conversion of green hydrogen

produced without carbon emissions to secure renewable energy. Green hydrogen will be used as a substitute for LNG in the hydrogen power generation facilities

and processes of our business sites. We will ensure that green hydrogen plays a pivotal role in the transition to electrification by installing a hydrogen fuel cell

system based on green hydrogen in all mobility groups, such as passenger cars and commercial vehicles, public transportation, trams, ships, and AAM. Going

forward, we will make every effort to ensure that hydrogen energy is widely used in all areas of human life and industry, beyond the means of mobility, by 2040.

2045 Net-Zero Roadmap

Net-Zero

2030

2035

2040

2045

Business sites

(Plants / Buildings)

Removal / offset

Supply chain

emissions

from cars

emissions

100 Electrification of Genesis,

Expanding the use of renewable energy

100 Electrification in European market,

All Commercial vehicle electrification

in Korea

100 Electrification in main market,

Expansion of hydrogen technologies

and their application

2019

CARBON

NEUTRALITY

Tank-to-wheel (TTW) that refers to the use of fuel in the vehicle and emissions during driving

Suppliers’ carbon emission that we aim to reduce and achieve net zero through collaboration with partners

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1. Introduction

We will manage the rest of our carbon emissions through investments

in carbon capture and utilization & storage (CCUS) technologies, offset

activities to recycle second life batteries into energy storage devices, and

REDD+ (Reducing Emissions from Deforestation and Forest Degradation

Plus Conservation). To achieve true carbon neutrality by 2045, Hyundai

will expand the production and conversion of green hydrogen based on

renewable energy, promote electrification based on the hydrogen fuel cell

system, and maximize the synergy between hydrogen business and carbon

neutrality through hydrogen power generation and processes.

Carbon Neutrality by Area

The five key areas on which Hyundai is focused on achieving carbon

neutrality are vehicle electrification, reducing our carbon emissions at work,

support for net zero in the supply chain, social activities for reducing carbon

emissions, and hydrogen business synergy effects. For a detailed explanation

of the direction and goals related to each area of carbon neutrality, please

refer to the Hyundai Motor Company website.

Hyundai Motor Company’s Carbon Neutrality Vision

Creating Hydrogen Ecosystem

Utilization of Green Hydrogen

Green hydrogen is hydrogen produced through the electrolysis of water,

hence it is often referred to as “the ultimate eco-friendly hydrogen” because

no CO

emissions are generated during its production process, whereas

hydrogen and oxygen are produced by using electric energy obtained

through renewable energy such as solar or wind power. Hyundai is striving

to significantly lower the production cost of FCEVs and hydrogen by utilizing

green hydrogen technology. We will promote the development of hydrogen

production by expanding the application of hydrogen fuel cell systems

to various industries, while building close cooperative relationships with

businesses and partners in the field of green hydrogen production.

Expanding Hydrogen Mobility

In September 2021, Hyundai Motor Group announced its vision for the

hydrogen society, “2040 Hydrogen for Everyone, Everything, Everywhere”,

and introduced various means of hydrogen mobility such as an unmanned

transportation system called a trailer drone, a disaster relief vehicle, and a

high performance hydrogen vehicle. We also presented a step-by-step plan

to achieve the goal of installing hydrogen fuel cells in all our commercial

vehicle lineups by 2028 for the first time in the global automotive industry.

In accordance with this plan, Hyundai is getting ready to expand hydrogen

mobility with particular focus on commercial vehicles.

Hyundai has been striving to achieve economies of scale in fuel cells

through FCEVs in the passenger car sector. In 2021, we sold about 9,600

NEXO FCEVs worldwide, consolidating our No. 1 position in the global FCEV

market. The creation of such large-scale demand in the passenger car

market will provide a basis for providing fuel cell-based hydrogen mobility at

a reasonable price.

Building Hydrogen Charging Infrastructure

Hyundai is collaborating with Saudi Aramco to expand its domestic hydrogen

charging infrastructure and increase the supply of FCEVs in Saudi Arabia,

while securing global competitiveness in robust hydrogen tanks and vehicle

weight reduction. Saudi Aramco aspires to develop hydrogen production

technology using its petroleum resources, and in order to expand it into a

global business, it is working with us for the development of an LPG reformer

by applying Hyundai’s reformer technology. Following the execution of a

joint development agreement in June 2022, the two companies are planning

to conduct a pilot project in 2023 using an LPG refueling station.

We are also making investments and building partnerships in various

fields, including acquiring a stake in “H2 Mobility”, a German hydrogen

infrastructure company, while working closely with both the private and

public sectors to build the hydrogen infrastructure.

Cooperation for Green Hydrogen Competitiveness Acquisition

According to the International Energy Agency (IEA), grey hydrogen extracted

from fossil fuels like natural gas and other by-product gases accounts for

about 96% of all hydrogen sources, with carbon being emitted during its

production. As such, converting it to green hydrogen based on renewable

energy is the most urgent task.

To secure the core technology required to produce green hydrogen, Hyundai

is exploring various types of water electrolysis technology including alkaline

capable of large capacity with low-cost production, polymer electrolyte

membrane (PEM) capable of responding to rapid renewable energy volatility,

and next-generation solid oxide electrolysis cell (SOEC) with excellent

efficiency. To secure competitive hydrogen production costs of the alkaline

type, Hyundai is working with Next Hydrogen and H2Pro.

Not only water electrolysis, but also green ammonia-based hydrogen

production is attracting attention in the market as a way to secure the

competitiveness of green hydrogen. As regards cracking technology,

which produces hydrogen by decomposing ammonia, Hyundai is joining

hands with CSIRO/FMG of Australia to develop a technology that uses

metal membranes. In this regard, an ammonia cracking system could be

used upon importing hydrogen from Australia, etc., ultimately laying the

foundation for the supply and use of carbon-neutral hydrogen.

To promote fuel cell power generation that can combine green hydrogen

infrastructure and fuel cell technology, we are conducting a pilot project

for MW-class power generation in cooperation with a number of domestic

power companies.

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1. Introduction

Reducing Product Carbon Footprint

To take part in the drive for carbon neutrality, which has been made the focus of all future global economic growth and

development, Hyundai is working to achieve carbon neutrality by 2045 through the introduction of an “eco-friendly mobility

ecosystem”. To reduce carbon production in its vehicles, the company is shifting its focus from vehicles equipped with an

internal combustion engine to EVs. To this end, Hyundai is leading the evolution of transportation by expanding its electrification

lineup based on EV technology and infrastructure, such as the E-GMP (Electric-Global Modular Platform), a platform dedicated

to EVs, and strengthening the competitiveness of its hydrogen fuel cell system for eventual application to all its mobility groups

including passenger cars, commercial vehicles, public transportation, trams, etc. We will newly position ourselves as a leading

company that realizes carbon neutrality ahead of others by expanding the electricity and hydrogen charging infrastructure,

thereby contributing to the transition of the global energy system to carbon neutrality.

Roadmap for Vehicle Electrification

Vehicle Electrification Strategy

With 2021 as the starting point for the transition to carbon neutrality,

Hyundai has declared it goal to achieve carbon neutrality by 2045,

centered around the transition from ICEVs to EVs. Hyundai has

established a roadmap to achieve carbon neutrality by 2045 through

100% electrification of its Genesis models by 2030, 100% electrification

for European markets by 2035, and 100% electrification in other major

markets by 2040. Three main innovation themes will play a key role in

achiev

ing the goals of the roadmap, namely innovation in production

capacity, strengthening of H/W product competitiveness, and enhancement

of software expertise and technology development. At the company’s 2022

CEO Investor Day, Hyundai presented investors with a

blueprint for the

automotive industry of the future.

Major Achievements and Plans for Electrification

In 2021, Hyundai sold 3.89 million automobiles worldwide and recorded

a consolidated operating profit of 5.7%. In particular, we sold 140K EVs

in 2021, a year-on-year increase of 44% in the proportion of EVs against

total vehicle sales. To lead the EV market, Hyundai continues to make

bold investments and develop new technologies. It plans to complete

the Integrated Modular Architecture (IMA) development system, which

standardizes and modularizes core electrification components, and apply

it to a platform for passenger EVs (eM) and a PBV-dedicated EV platform

(eS) by 2025. In addition, we will invest KRW 12 trillion in software by 2030

to strengthen our competitiveness in software, such as autonomous

driving of EVs and vehicle connectivity.

Expanding the EV Market Share

Hyundai has set its EV sales target to 840,000 units by 2026 (17% of total

vehicle sales) and 1.87 million units by 2030 (36% of total vehicle sales). More

specifically, by 2030, we plan to sell 530,000 units in the US (58% of total

sales), 480,000 units in the European market (69% of total sales), 290,000

units in the Korean market (58% of total sales), and 570,000 units in other

markets. Once the 2030 sales target is achieved, Hyundai’s global EV market

share is expected to rise from 3% in 2021 to 7% in 2030, with the market

shares in the US and Europe rising to 11% and 6%, respectively.

Vehicle Electrification Roadmap

2030

100% electrification of

Genesis models

2035

100% electrification for

the European market

2040

100% electrification for

the major markets

2045

Accelerate electrification for

the emerging markets

(carbon neutrality achieved)

Vehicle Electrification Strategy

Top player in global EV market

EV sales of 1.87 million units by 2030 (Hyundai + Genesis),

HMG global EV M/S 12%, EV sales of 840K units by 2026

From Vehicle to Experience

Establish a roadmap for 3 key factors to achieve EV sales target

Expand local

production in major

markets including

localized sourcing of

batteries

(Develop next gen.

battery technology and

stabilize sourcing)

Capacity

Apply next

generation Modular

Architecture

(Enhance

competitiveness in

vehicle system)

Product

Secure S/W

competitiveness

and expand

investment

→ Achieve S/W

transformation

Software

Road to Electrification

Hyundai Motor will be 100% carbon-neutral by 2045

Genesis brand100% electrification by 2030, 100% electrification by 2035 in EU market,

100% electrification by 2040 in major markets

2022 CEO Investor Day

2030 EV Sales Target

Korea

USA

Europe

Others

2021

40K

20K

10K

70K

140K units

(4% of total vehicle sales)

840K units

(17% of total vehicle sales)

120K

220K

230K

270K

2026

1.87M units

(36% of total vehicle sales)

570K

530K

290K

480K

2030

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1. Introduction

To expand its global EV sales and market share, Hyundai plans to launch a

total of 17 EV lineups including 11 Hyundai brands and 6 Genesis brands by

2030. We will release the IONIQ 6 in 2022 and the IONIQ 7 in 2024, while

launching EV lineups for six types of SUVs, three passenger vehicles, one

small commercial vehicle, and another new vehicle by 2030. All new models

of the Genesis brand will be launched as EVs starting from 2025, while being

equipped with EV lineups for four types of SUVs and two types of passenger

vehicles by 2030.

Securing EV Technology Competitiveness and

Expanding the Charging Infrastructure

Compared to the existing internal combustion engine platform, Hyundai’s

EV-only platform E-GMP offers a number of differentiated advantages such

as flexibility in vehicle development, a design and structure optimized for

EVs, a standardized large-capacity battery system, a longer cruising range,

future-oriented design, and innovative space. The EMP is therefore regarded

as the leader of future mobility in various areas such as fast/rapid charging,

autonomous driving, and connectivity.

Expanded Use of Hydrogen Fuel Cells and

Establishment of Hydrogen Infrastructure

Hyundai has been building many milestones such as world’s first mass

production of FCEVs, sales of 20,000 NEXOs with performance comparable

to ICEVs, and export of the Xcient, hydrogen-powered electric truck, to

Europe. We are now working to expand the hydrogen fuel cell technology

for vehicles to various fields so that hydrogen energy can be used by people

and industry across the world, beyond a mere means of transportation.

With HTWO, our hydrogen fuel cell system brand, we are accelerating the

establishment of the hydrogen ecosystem by selling the system and building

cooperative relationships.

E-pit charging station

IONITY charging station

Signing of MOU with Shell

Hydrogen fuel cell system

Hydrogen trains

H Moving Station

E-pit – an Ultra-fast EV Charging Station

E-pit, the fastest charging station for EVs in Korea, is capable of charging the IONIQ 5 within 18 minutes (from 10% to 80% of battery capacity). Hyundai has

also launched an ultra-fast charging service based on big data to provide customers with an innovative charging service experience. The service includes

the Charging Route Recommendation System, which guides customers to charging stations, the Digital Queue Service, which informs customers of the

expected charging time and order, and the Plug-and-Charge Technology, which offers customers a one-stop service from charging to payment. Going forwards

we will continue to ensure that EV users can enjoy the best charging service possible through continuous technological innovations and service improvements.

IONITY – EV Charging Infrastructure in Europe

To secure an EV charging infrastructure in the European market, Hyundai has made a strategic investment in IONITY, a European fast charging network for

EVs. As of 2021, it has more installed than 1,500 high-power (350 kW) ultra-fast chargers in Europe, with a plan to expand the number to 7,500 by 2025. As

Hyundai operates a combination of fast and slow charging infrastructures and various convenience facilities, its charging infrastructure is expected to be

used in diverse ways. Having established collaborative relationships with IONITY, Hyundai is expected to enjoy synergistic effects including increased sales

of the IONIQ 5 and the Genesis GV60, both of which have been well-received in the European market.

MOU with Shell to Expand Charging Infrastructure in the US

Hyundai has signed an MOU with Shell, a global energy company, for comprehensive cooperation in hydrogen, digital technologies, low carbon energy

solutions, and EV charging. Hyundai will leverage Shell’s approximately 45,000 gas stations in some 80 countries to expand our EV infrastructure. We are

also exploring ways to enhance charging convenience for Shell Recharge Solutions, Shell’s EV charging service, and the Genesis brand. Meanwhile, Hyundai

has set a goal of using 100% of renewable energy by 2045, and as part of the effort, we plan to adopt Shell’s renewable energy solutions.

E-pit Website (Korean)

Expanding Hydrogen Fuel Cell System Business

Since its mass-production of the world’s first FCEVs in 2013, Hyundai has led the passenger and commercial FCEV market based on the technology it

has accumulated. Furthermore, it has expanded the horizon of hydrogen applications by sharing its hydrogen fuel cell systems proven in the automotive

industry with other industries. We began to export fuel cells to GRZ Technologies, a Swiss hydrogen storage technology company, in 2020 while widely publicizing

the scalability and potential of hydrogen fuel cells through various pilot projects in non-automotive sectors such as hydrogen trams, forklifts, and power generation.

Collaborating for Hydrogen Technology

Hyundai is collaborating with various domestic and foreign organizations to develop hydrogen technology. Overseas, we have joined forces with Hazer

Group in Australia to develop technology for reducing CO

emissions generated in the process of hydrogen production, as well as introducing and

investing in liquid organic hydrogen carrier technology from Hydrogenious of Germany. In Korea, Hyundai participates in the H2 Business Summit to

accelerate cooperation in Korea’s hydrogen industry, and is building cooperative relations with local governments and public institutions. Going forward,

we will expand technological cooperation with various organizations while providing innovative hydrogen services to customers based on outstanding

technological competitiveness.

H Moving Station – a Mobile Hydrogen Charging Station

Under its hydrogen vision of “Hydrogen for Everyone, Everything, Everywhere,” Hyundai provides a mobile hydrogen charging service that allows

consumers to access hydrogen mobility easily by making the service available in areas where the hydrogen charging infrastructure has yet to be

established or where demand for charging is rapidly increasing. Hyundai’s mobile hydrogen charging station, “H Moving Station”, can store 80 kg

hydrogen per unit and charge up to 25 FCEVs per day with a charging pressure of 350 bar. Going forward, we will further strengthen hydrogen infrastructure

to make the H Moving Station service available to other types of hydrogen mobility, including heavy equipment and drones powered by hydrogen.

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1. Introduction

In addition to leading the EV platform technology, it is increasing customer

convenience by expanding and building EV charging stations, and is

continuously expanding or building ultra-fast EV charging stations such as

the E-pit domestically, while strengthening cooperation overseas to expand

its charging infrastructure in European and American markets.

Hyundai’s competitiveness in hydrogen fuel cell system technologies is

recognized by global industry and government agencies, as Hyundai is

consolidating its position as a global first mover. To speed up the transition

to a hydrogen society where hydrogen serves as the key energy source,

Hyundai is striving to build the hydrogen infrastructure and reinforce cross-

industry collaboration.

Responding to Regulations on Average Fleet

Emissions & Fuel Economy in Major Markets

Regulations on vehicle carbon emissions are being strengthened in major

markets such as the EU and the US. The EU has introduced a regulation

to reduce 55% of its CO

emissions of passenger cars compared to the

2021 level by 2030, while the US has introduced regulations requiring fuel

economy up to 40 miles per gallon by 2026.

Accordingly, in order to preemptively respond to regulations of major

markets, Hyundai is striving to achieve zero CO

emissions by improving the

fuel efficiency of ICEVs and by increasing the proportion of EVs. In addition

to main markets, we are paying special attention to the regulation of CO

emissions in emerging markets such as Brazil and India.

Regulations in the EU

The EU, the largest EV market in recent years, has enforced a strong

carbon reduction policy. The EU will reduce CO

emissions limit by

55% by 2030 compared to the 2021 level. Continuous tightening of the

regulations is also planned, including prohibition of the sale of new cars

with gasoline and diesel engines starting in 2035. CO

emission metrics

was also be changed to the Worldwide Harmonised Light Vehicle

Test Procedure (WLTP), an international standard which measures

emissions on real roads. In order to respond to such changes, significant

improvements in fuel economy are needed to be made.

Regulations in the US

The US aims to improve vehicle fuel efficiency by 40% and reduce carbon

emissions by 30% by 2026. To this end, it has announced that only cars that

satisfy a fuel efficiency rate of 40 miles per gallon will be sold starting with

models released in 2026. Currently, the fuel economy of vehicles sold in

the US is 24 miles per gallon on average. To meet the new fuel efficiency

regulation, automobile manufacturers are required to improve their fuel

efficiency by 8% in 2023 and 2024, respectively, and by 10% in 2026.

Regulations in China

China is implementing a “New Energy Vehicle Credit Scheme” whereby auto

makers are obligated to supply EVs. The scheme requires manufacturers

to accumulate credit by producing gasoline vehicles with lower emissions

than the national standards or by producing battery EVs, PHEVs, and FCEVs.

In addition, China has set the goal of increasing the share of new energy

vehicles (NEVs) as a proportion of total vehicle sales to 20% in 2025, 40% in

2030, and 50% in 2035, with the proportion of battery EVs (BEVs) exceeding

95% of NEVs by 2035.

Average Fuel Economy in the US

(Unit: mpg)

2018

2019

2020

2021

27.2

38.9

27.1

38.5

29.4

40.0

30.9

42.8

Passenger vehicle

Light truck

The average fuel economy performance in the US and China reflects the average fuel

economy performance of each car maker announced by the relevant government

agencies (NHTSA, Ministry of Industry and Information of China) each year.

2021 performance is not able to be compared with the performance of prior

years for the EU Commission changed the CO

emission standard from NEDC

to WLTP; and the regulatory value was also from 95g/km(2020) based on NEDC

to 112.5g/km(2021) based on WLTP according to the change of methodology.

The average CO

emissions of EU reflectthe average CO

emission performance

calculated/disclosed by the European Commission on the basis of vehicles

registered annually by the Commission; and the 2021 figure is an estimate

calculated by Hyundai based on its sales performance.

Average CO

Emissions in the EU

(Unit: g/km)

124.3

123.5

94.7

109.7

2018

2019

2020

2021

WLTP

NEDC

Average Fuel Economy in China

(Unit: L/100km)

2018

2019

2020

2021

5.61

6.00

6.28

6.15

2021 performance is not able to be compared with the performance of prior

years for the Chinese government changed the fuel economy certification

standard from NEDC to WLTP.

NEDC

WLTP

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1. Introduction

Regulations in Korea

Since announcing Carbon Neutrality 2050, Korea has established carbon

regulations and policies comparable to those of advanced countries.

As the automobile CO

-related system of 2012 has been strengthened,

auto makers are required to reduce their vehicle emissions from 97 g/

km in 2020 to 89 g/km in 2025 and 70 g/km in 2030. Manufacturers

that breach the emission limit will receive a fine of KRW 50,000 per 1g.

Korea also aims to expand the supply of eco-friendly vehicles to 2.85

million units by 2025, while integrating 1,000 parts companies into the

country’s car industry of the future by 2030.

Expanding EV Lineups

To meet the goal of achieving carbon neutrality by 2045, Hyundai is

constantly expanding its lineup of eco-friendly vehicles. We are striving to

become a top player in the EV sector by introducing HEVs and PHEVs, as

well as EVs and FCEVs that do not emit any GHG emissions at all. In 2021, we

sold 422K EVs, accounting for 10.8% of our global vehicle sales. In particular,

we are leading global EV and FCEV markets, posting a 44% increase in sales

in 2021.

We plan to continue strengthening our EV lineup in 2022 by launching the

IONIQ 6 and GV70 EV. By 2030, we will be equipped with an EV lineup of 17

models, including 11 Hyundai models (3 passenger vehicles, 6 SUV models,

1 light commercial vehicle, 1 other type of vehicle) and 6 Genesis models (2

passenger vehicles, 4 SUV models). In this way we will secure our position

as a global EV powerhouse with the goal of selling 1.87 million EVs and

achieving a 7% EV vehicle market share by 2030.

HEV and PHEV

Hybrids (HEV) are highly eco-friendly vehicles with lower pollutant emissions

and higher fuel efficiency than vehicles powered by internal combustion

engines. Hyundai’s SONATA hybrid model, for example, boasts a carbon

emissions output of only 79 g/km (based on the Korean model), which is

39% less than its gasoline-powered model (131 g/km). We sell hybrid versions

of all our models, except for large SUVs and subcompacts. To reduce the

carbon emissions of SUVs, which emit more carbon than sedans, Hyundai

launched the KONA HEV model in 2019, followed by the TUCSON and SANTA

FE HEV models in 2020. In addition, we are expanding the PHEV lineup by

launching the IONIQ PHEV in 2016, Sonata PHEV in 2017, and the TUCSON

and SANTA FE PHEVs in 2021.

An EV is an eco-friendly vehicle that does not emit GHG. Starting with the

launch of the IONIQ in 2016, Hyundai gains traction in developing EVs. In

2018, we launched the KONA EV, the first SUV EV ever released by a popular

brand, followed by the IONIQ 5, the first EV based on the E-GMP in 2021,

emerging as a leader in the global EV market. Meanwhile, the launch of EVs

from the Genesis brand, such as the G80 EV and GV60, is also in full scale. By

2030, we will expand EVs, with a particular focus on SUVs, while the Genesis

brand will achieve 100% electrification, taking a big step closer to the goal of

becoming carbon-neutral.

FCEV

Like EVs, FCEVs do not emit any pollutants including GHG, generating

only energy and water. As they can also remove ultrafine dust from the

atmosphere during operation, they are attracting attention as an eco-friendly

form of mobility for the future. Hyundai launched the TUCSON ix, the world’s

first FCEV in 2013, and the NEXO FCEV equipped with a next-generation fuel

cell system in 2018. The NEXO, which features a three-stage air purification

system, boasts performance comparable to that of an ICEV. It can travel 609

km on a single charge. In addition, we have been expanding our FCEV lineup

by launching the ELEC CITY FCEV, a hydrogen electric bus in 2020, and the

Xcient Fuel Cell, a hydrogen-powered electric truck, in 2022.

Other Eco-friendly Vehicles

Hyundai has also launched regional eco-friendly models that run on

bioethanol and compressed natural gas (CNG). In South America, we

launched the HB20, a hybrid fuel vehicle, to meet the demand for

bioethanol, while in India we introduced the Aura CNG model to respond to

the country’s growing demand for CNG. In 2021 alone, Hyundai sold 179,193

biofuel vehicles and 1,489 CNG vehicles.

Sales of Other Eco-friendly Vehicles

(Unit: Vehicles)

2019

2020

2021

Biofuel model

201,874

152,977

179,193

CNG model

3,005

1,352

1,489

Global Sales of Eco-friendly Vehicles

(Unit: 1,000 units)

2030

Goal to have 17 EV model lineups and sell 1.87 million EVs

2019

110

2020

136

2021

141

234

192

259

422

HEV

PHEV

FCEV

EV – IONIQ

EV – GV60

FCEV – NEXO

HEV/PHEV – TUCSON

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1. Introduction

Improving Fuel Economy

In addition to launching new models with improved fuel efficiency,

Hyundai makes continued efforts to improve the efficiency of its next-

generation powertrain (P/T) to respond to the increasingly stringent

regional regulations on fuel economy and carbon emissions, while also

reducing carbon emissions significantly. The fuel efficiency of Hyundai’s

third generation P/T has been improved by 10% on average compared

to the second generation, and we are continue developing lineups that

incorporate the technology. Although we are aiming for a 100% transition

to EV moving forward, at the same time, we are making concerted R&D

efforts to improve the P/T fuel economy of ICEVs, which still account for a

high proportion of sales, and to improve the fuel economy of the internal

combustion engines by reducing their weight and installing solar roofs,

while maximizing the fuel economy of each vehicle.

Technologies to Enhance Vehicle Fuel Economy

While making continuous efforts to improve the fuel economy of its

new ICEVs aimed at reducing product carbon emissions, Hyundai is

increasing R&D efforts to improve the overall fuel economy of per vehicle,

such as by reducing vehicle weight and air resistance. As a result, the

third-generation Genesis G80, released in 2020, boasts improved fuel

economy of more than 20% compared to the second-generation version,

which was achieved by engine downsizing and aerodynamic and driving

resistance improvements. The fourth-generation Genesis G90, launched

in 2021, boasts lower carbon emissions, down from 196 g to 184 g, on the

back of various technologies to improve fuel economy, despite increased

specifications and enhanced displacement of the main engine compared

to models of the previous generation. The latest model’s fuel economy

has been improved by 5.7% through engine efficiency advancement with

an ultra low loss diode (ULLD), friction load improvement with an air-

conditioner compressor, and transmission efficiency enhancement with

a torque converter with centrifugal pendulum absorber (CPA). Moreover,

we improved fuel efficiency by developing an integrated thermal

management system that controls the optimum engine temperature

under specific driving conditions, while reducing carbon emissions from

vehicles by reducing vehicle weight by 40 kg.

Solar Roof

Various forms of renewable energy that do not pollute the environment

or pose a risk of depletion are growing in importance as an alternative

to fossil fuels and nuclear energy. Solar (photovoltaic) power generation

is one of the most common types of renewable energy and is easily

available to the public.

Hyundai has applied solar power generation technology to reduce their

carbon emissions. Starting with the eighth-generation SONATA Hybrid,

allowing it to be driven about 1,300 km a year without producing any

carbon emissions, solar roof has been applied to EVs such as the IONIQ

5 and the G80. In particular, the IONIQ 5 can obtain sufficient electricity

to drive 1,500 km per year via its solar roof. Hyundai is striving to raise

the density levels of solar cells and boost their performance to make the

technology more viable. We will continue make efforts to further reduce

vehicle carbon emissions by using more renewable energy.

Improve Fuel Economy on the Road (Off-cycle Test)

Hyundai conducts fuel economy tests in accordance with the legal

standards in order to obtain certifications in Korea as well as in our major

export markets including North America, Europe, China, and India. However,

a gap occurs with each certification value in terms of actual road driving

conditions due to various external factors such as weather and road

congestion, as well as internal factors including gear shifting, vehicle weight,

and air conditioning conditions. Hyundai therefore conducts off-cycle tests

related to fuel economy (CO

emissions) with various driving profiles applied,

as well as correlation analysis with the official results.

Hyundai always provides reliable fuel economy data in collaboration with

third-party organizations. In the US, we present reliable fuel economy data

through comparison with third-party data from EPA, J.D. Power and CR

(Consumer Reports) among others. In Europe, which has the strongest

regulations on carbon emissions, we are striving to bolster the credibility of

fuel economy tests by comparing them with data from agencies such as

Green NCAP, Auto Bild, and Spritmonitor.

We receive regular (weekly or monthly) inspections of fuel efficiency and

emission measurement facilities by external authorized organizations

(KOLOAS, KATECH, etc.), and aim to further raise the reliability of results by

conducting fuel economy tests with various national research institutes.

The department in charge of on/off cycle comparison reports the results of

comparative analysis to the executive in charge of powertrain R&D at least

once a year.

IONIQ 5 with a solar roof

G80 EV with a solar roof

G90 engine with improved fuel economy, durability, and acceleration

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1. Introduction

Carbon Reduction at Business Sites

Hyundai fully supports the direction and goals of the Paris Agreement on Climate Change, recognizes the roles and

responsibilities in reducing global GHG emissions as a business, and carries out various activities to contribute to achieving

the goals. While continuing energy reduction activities, such as the introduction of high-efficiency facilities and process

improvements at all business sites, we aim to realize eco-friendly manufacturing based on the transition to renewable

energy sources including solar energy. We will collaborate with the Group affiliates to achieve the goal of 100% renewable

energy at all our business sites across the globe by 2045, ahead of the 2050 deadline recommended by the RE100 (The

Climate Group).

Direction of Carbon Reduction at Business Sites

Energy Efficiency in Production Processes

Hyundai makes various efforts to increase energy efficiency in production

processes and realize carbon neutrality by 2045. To this end, we are

increasing the use of renewable energy and introducing high-efficiency

motors and inverters in addition to utilization of hydrogen energy. We will

replace the fossil fuels and electric energy used in manufacturing process

with renewable energy while improving efficiency in painting process, which

uses LNG as main fuel, by introducing high-efficiency equipment, recycling

waste heat, and improving production processes.

Sites with the Energy Management System Certificate (ISO 50001)

Site

Certificate validation date

Beijing Hyundai Motor Company

(BHMC)

Jan. 26, 2025 (Renhe/Yangzhen Plants)

Dec. 12, 2024 (Changzhou Plant)

Hyundai Motor India (HMI)

Oct. 04, 2024

Hyundai Assan Otomotiv Sanayi

(HAOS, Turkey)

Jul. 16, 2024

Carbon Capture Utilization & Storage

To achieve carbon neutrality, we should stop using fossil energy in

automobile manufacturing processes. However, it will take years to

complete transition to next-generation deoxygenation energy, carbon

capture utilization & storage (CCUS), a new technology that captures and

processes CO

emitted by fossil energy combustion, is gathering traction as

a potential carbon-neutral tool during the transition period.

Hyundai has been developing CCUS technology to capture carbon

emitted by LNG in manufacturing processes, given that a large amount

of the fuel is used despite its relatively low carbon emissions among

fossil fuels. To prepare for the commercialization of the CCUS technology

for not only automobile business but other types of business as well,

the Namyang R&D Center is conducting empirical research on CCUS

in addition to monitoring the market continuously and pursuing the

relevant technology development.

RE100 Roadmap

In July 2021, Hyundai Motor Company, along with other Group affiliates

including Kia, Hyundai MOBIS and Hyundai WIA, declared the joining of the

RE100, which advocates a 100% transition to renewable energy. Having been

admitted into the global initiative in April 2022, Hyundai now aims to achieve

100% renewable energy transition by 2045, ahead of the RE100’s target year,

2050.

Hyundai will gradually increase the use of renewable energy by 2045, taking

into account t the renewable energy supply and demand environment as

well as the government policies and regulations by country, such as the

Czech Republic, where there is greater availability of renewable energy

sources, India and the US. We will also apply optimal solutions for each plant,

such as installing solar panels on the roofs of production plants, purchasing

renewable energy certificates, and signing a power purchase agreement

(PPA) with an external renewable energy generator.

RE100 Implementation Plan

Hyundai Motor Manufacturing Czech (HMMC) converted 100% of electricity

consumed at its plant into renewable energy through the Guarantee of

Origin (GO) scheme in 2022. Hyundai Motor India (HMI) installed a 10 MW

solar panel on the roof of its plant in 2021 while pursuing 100% renewable

energy by 2025 through photovoltaic power generation and PPAs. Starting

with the US market in 2025, most of Hyundai’s overseas business sites in

Brazil, Indonesia, Turkey and other countries are set to achieve their RE100

targets by 2030.

In Korea, Hyundai is supplying electricity to the external grid by installing

solar panels on the roofs of its production plants under joint investment

and rooftop lease agreements with a large public power company. We will

standardize the installation of solar panels in new buildings and plants while

pursuing a phased expansion of renewable energy through PPAs. We are also

carrying out a pilot project to connect with photovoltaic power generation

by installing an energy storage device (ESS) that recycles waste batteries.

Hyundai will boost the carbon emission reduction activities of its business

sites by developing technology that optimizes energy use in digital

technology-based production processes utilizing AI and big data, while

taking the lead in achieving RE100 by 2045.

Jul. 2021

Declared the joining of

RE100

Apr. 2022

Received the approval

to join RE100

2030

Aim to achieve 50%

electricity transition to

renewable energy

2040

Aim to achieve 90%

electricity transition to

renewable energy

2045

Aim to achieve 100%

electricity transition to

renewable energy

RE100 Roadmap

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1. Introduction

Carbon Reduction Activities at Business Sites

Carbon Reduction Activities in Korea

Ulsan Plant

Following the completion of a 9 MW photovoltaic power generation facility

in the parking lot of its driving test site in 2020, the Ulsan Plant will start

construction of a 15 MW second-stage photovoltaic power generation

facility in the Seongnae parking lot for finished vehicles in 2022. To reduce

its GHG emissions, the plant reduces power consumption by replacing

high-efficiency pumps, configuring motor power saving circuits in engine

factories, and applying inverters, while reducing gas consumption by

extending the electro-deposition oven preheating zone, etc.

Asan Plant

The Asan Plant is concentrating on reducing energy consumption during

equipment waiting times. In the finished vehicle part, it applies an inverter to

the driving part of the hamming press facility during the car body process,

conserving energy during not only waiting times but also brief standby

times for the change of vehicle models. In the engine process, the plant has

reduced energy use by building a power-saving circuit into all the processing

equipment, while also contributing to reducing carbon emissions by setting

and implementing aging facility replacement plan.

Carbon Reduction Activities in Overseas Subsidiaries

Beijing Hyundai Motor Company (BHMC)

BHMC has improved the operations of its production facilities to reduce

down-time while continuing to reduce standby power in its production

facilities. It has reduced GHG emissions by optimizing facility operations,

including suspending the supply of steam to the paint shop when the

external temperature rises, except in winter.

Hyundai Motor Brasil (HMB)

HMB regularly checks for energy loss factors while making various

improvement efforts such as the introduction of an optimized compressed

air supply system. It strives to reduce GHG emissions by continuously

promoting energy conservation through the introduction of high-efficiency

facilities and the replacement with LED lights.

Hyundai Motor Manufacturing Czech (HMMC)

HMMC has improved its energy efficiency by installing the EcoSmart VEC

system based on a gas monitoring system at its paint shop. It has conserved

energy by controlling the supply of compressed air and replacing the lighting

with LED lights. In 2022, HMMC converted 100% of electricity consumed at

its plant into renewable energy through GO.

Hyundai Motor Manufacturing Alabama (HMMA)

HMMA minimizes energy waste by using automatic cooling/heating

monitoring systems that maintain the appropriate temperature, and has

reduced GHG emissions by increasing energy efficiency through the

installation of high-efficiency common utility facilities.

Hyundai Assan Otomotiv Sanayi (HAOS)

To conserve energy, HAOS in Turkey has made improvements to various

processes including the reduction of compressed air consumption and

the minimization of welding processes, while introducing the latest

equipment such as high-efficiency inverters. In particular, it has minimized

the unnecessary consumption of power in the paint shop at weekends and

when the plant is not in operation.

Hyundai Motor India (HMI)

HMI operates its plant with electricity from renewable energy sources

supplied through PPAs, thereby meeting about 35.5% of its total electricity

consumption. Other than purchasing renewable energy from outside, HMI

installed a 10 MW photovoltaic power generation facility in addition to

existing 0.69 MW photovoltaic power generation facility in 2021.

Hyundai Motor Manufacturing Russia (HMMR)

HMMR is replacing the lighting at its business sites with high-efficiency

LED lights. By the end of 2021, it had replaced 100% of office lighting and

about 50% of its plant lighting, with the rest to be replaced by 2025. HMMR

has reduced GHG emissions by saving energy during holiday shutdowns by

upgrading its compressed air supply system.

Hyundai Motor Manufacturing Indonesia (HMMI)

Since April 2021, HMMI has been running a 3.2 MW photovoltaic power

generation facility for its manufacturing plant following a pilot operation. It is

now in the process of registering carbon credits with the CDM

Secretariat

of Indonesia.

Clean Development Mechanism: One of the reduction mechanisms stipulated in the

Kyoto Protocol to allow emission-reduction projects in developing countries to earn

certified emission reduction credits

Jeonju Plant

The Jeonju Plant has introduced high-efficiency equipment to reduce

GHG emissions, and has replaced its production system with an eco-

friendly system. It has applied an inverter to the supply/exhaust system to

block unnecessary energy use, and is replacing old refrigerators with high-

efficiency ones. The plant has also reduced LNG consumption by introducing

the waterfall washing method, which lowers the water temperature, to the

truck paint shop.

R&D Centers and Other Business Sites (incl. Delivery Centers & Branches)

Hyundai’s R&D centers reuse recovered waste heat and steam for boilers,

and reduce GHG emissions by using waste heat generated during waste

treatment. We are currently operating a 562 kW photovoltaic power

generation facility and plan to install an additional 3 MW facility after

consultation on the location. Hyundai’s R&D centers as well as delivery

centers and service centers have improved their energy efficiency by

replacing aging facilities, while our own sales branches have reduced their

GHG emissions by turning off lights during lunchtime. The headquarters has

reduced electricity use by 135 kWh per month by installing LED lights on the

world clock and the world map installed in the lobby on the 1st floor of the

West Building.

A photovoltaic power generation facility in the parking lot

of the Ulsan Plant’s driving test site

A photovoltaic power generation facility in HMI

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1. Introduction

Life Cycle Carbon Reduction

Governments around the world are tightening carbon emission regulations in line with the accelerating global efforts to

respond to climate change. Automobiles are considered the main culprit of air pollution and thus the automotive industry

is being asked to conduct life cycle assessments (LCAs) as part of the governments’ environmental regulations. After

establishing an assessment process, Hyundai conducted LCAs on the Kona EV in 2020 and four other vehicle models in 2021.

We will analyze environmental impacts of each sector in order to continuously identify areas of improvement and make

them better to minimize environmental impacts.

Life Cycle Assessment

Hyundai conducts LCAs to assess the environmental impact of each

vehicle's life cycle, from the acquisition of raw materials and manufacturing

to use, end-of-life treatment, and recycling. We conduct LCAs in accordance

with the international standards (ISO 14040 & 14044) for vehicles produced

in domestic plants for the Korean and European markets. In 2021, we

conducted Full-LCAs for each of the core products of EV, HEV and ICE, and

Simplified-LCAs for the core product of FCEV. As the result, we completed

LCAs for 14.4% of total vehicles sold.

LCA Methodology

When conducting LCAs, Hyundai follows the Environmental Product

Declaration of Ministry of Environment (Korea) and applies the CML (Centrum

vookr Milieukunde Leiden) methodology to appraise its performance in the

following six categories – global warming potential (GWP), abiotic depletion

potential (ADP), acidification potential (AP), eutrophication potential (EP),

ozone depletion potential (ODP), and photochemical oxide creation potential

(POCP). In addition to these six impact categories, we conduct LCAs on

human toxicity and water depletion for the European market.

Expanding Implementation of LCAs

Based on the EV LCA process established in 2020, Hyundai was certified

in 2021 by TÜV Rheinland of Germany that its LCA of the IONIQ 5, an EV

subject to the E-GMP appraisal, was properly performed according to the

ISO standards. In 2021, we expanded the assessment targets and established

the LCA process for ICEVs and HEVs, based on which we completed the

LCAs of the TUSCON gasoline and hybrid models. In 2022, we will develop

an LCA process aligned with those of suppliers as a way to advance the

assuagement system.

LCA Results

The LCA results show that of all the assessed models, TUCSON Gasoline

emits the largest amount of GHGs in its entire life cycle and use stage, while

EVs produce a relatively low level of emissions during use. Furthermore, it

has been confirmed that the largest amount of emissions is produced in the

operation stage of all assessed models, followed by the pre-manufacturing

stage and the manufacturing stage. The result also shows that EVs produce

more GHG than others in the pre-manufacturing stage, attributable to the

battery system.

LCA Results

Model

IONIQ 5

TUCSON Hybrid

TUCSON Gasoline

Life Cycle GHG

emissions

(gCO

-eq/km)

169.6

241.6

311.1

Utilization of LCA Results

Hyundai is using its LCA results as the basic data to identify the current status

of progress in achieving carbon neutrality targets. We also use the data as a

preemptive measure regarding the LCA legislation currently being promoted

in the EU. Based on the results, we conduct comprehensive analyses of the

environmental impacts of each stage and determines the efforts required to

improve the environmental performance of products. We are also striving to

develop new models with a minimal environmental impact by reflecting the

LCA results in new car development process, and have elaborated plans to

use them in the development of alternative raw materials and parts as well

as eco-friendly recycled materials.

Impacts Covered by LCAs

Ecological

consequences

Resource and

water use

Abiotic

Depletion

Human

health

Human

Toxicity

Photochemical

Ozone Formation

Water

Depletion

Eutrophication

Global

Warming

Acidification

Ozone

Depletion

Phase 1 (2020)

Inaugural LCA

Phase 2 (2021)

Expansion by PT type /

International certification of methodology

Expansion to hydrogen & commercial /

System advancement

ICE/HEV

FCEV

KONA EV

IONIQ 5

TUCSON Gasoline / TUCSON Hybrid

NEXO

Fuel cell truck / Fuel cell bus

IONIQ 6

All Genesis models

Phase 3 (2022)

* Plan to conduct LCAs of all new models starting in 2022

Including GHG emissions in the process of producing and distributing energy used

for vehicle use (Well-to-Tank)

KONA EV

IONIQ 5

G90

Global Warming Potential by Life Cycle

Pre-manufacturing

Transportation

Manufacturing

Distribution

Use

End-of-life Treatment and Recycling

IONIQ 5

TUCSON Hybrid

TUCSON Gasoline

86.25%

11.32%

1.89%

27.78%

1.55%

70.44%

90.41%

7.68%

1.47%

(Unit: gCO

-eq/km)

169.6

241.6

311.1

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1. Introduction

Roadmap for Supply Chain Carbon Neutrality

2022 Plan to Promote Carbon Reduction in the Supply Chain

Training for and raising awareness of suppliers

• CEOs: Host the Partnership Day for suppliers and introduce Hyundai’s carbon neutrality strategies

• Employees: Offer online ESG basic/intensive training courses (Global Partnership Center)

Operation of the Supplier Carbon Neutrality Council

• Convene the Supplier Carbon Neutrality Council on a regular quarterly basis

• Gather opinions on Hyundai’s carbon neutrality strategies and exchange opinions on major issues

Providing suppliers with the

carbon neutral guide for suppliers

• Present suppliers with an implementation guide to promote carbon neutrality

•

Include the establishment of an in-house management system, reduction of GHG emissions at business sites/

supply chain/logistics, and disclosure of emission information, etc.

Survey of suppliers’ GHG emissions

and energy consumption

• Survey GHG emissions and energy consumption by raw material suppliers, etc.

• Develop survey forms and broaden the suppliers subject to the survey

Review of suppliers’ reduction targets

and development of support programs

• Specify suppliers’ GHG emission reduction plans (criteria and targets).

• Develop supplier support programs (in connection with smart factory construction, etc.)

Carbon Neutrality in the Supply Chain and Logistics/

Carbon Neutrality in the Supply Chain

Hyundai is encouraging our supply chain’s 2045 carbon neutrality which

includes tier-1 auto-part suppliers. Estimated GHG emissions of our supply

chain are 18.36 million CO

-eq, which is about 18% of total GHG emissions

generated throughout the life cycle of Hyundai’s products. In the short term,

we plan to establish a supply chain carbon emissions monitoring system to

induce suppliers’ carbon neutrality, and in the long term, we plan to reduce

carbon emissions in the supply chain through applying low-carbon materials

and eco-design.

Action Plan to Reduce Carbon Emissions in the Supply Chain

In 2021, Hyundai established a basic action plan to support its suppliers’

efforts to reduce their carbon emissions based on the results of a survey of

their carbon emissions and reduction plans.

Carbon Reduction at the Logistics/Transportation Stage

Hyundai uses eco-friendly means of logistics and transportation including

the procurement of parts and raw materials, the storage of inventory and

work-in-process, and the sales and transportation of finished vehicles.

Hyundai GLOVIS, which is in charge of Hyundai’s major logistics and

transportation on consignment, has contributed to reducing the volume of

carbon emissions generated in Hyundai’s logistics/transportation processes

by improving the fuel economy of its freight vehicles and promoting a modal

shift toward more energy-efficient means of transportation. We intend to

promote a step-by-step modal shift to eco-friendly, low-carbon modes of

logistics/transportation, with a plan to switch 100% of company-owned

vehicles by 2030.

Creating Eco-friendly Logistics/Transportation Ecosystem

In order to reduce carbon emissions in the logistics/transportation service

ecosystem, Hyundai is developing an eco-friendly and autonomous

unmanned logistics/transportation business based on new technologies

such as EVs, FCEVs, urban air mobility, and robotics. In the first mile stage,

where cargo moves from a plant to a warehouse, we will use fuel cell trailers

suitable for long-distance driving, while using electric trucks for the middle

mile and last mile stages, from a warehouse to each base, leveraging our EV

strengths. In addition, we are expanding cooperation with the government

and industry to supply them with fuel cell trucks as a way to expand

electrification in the logistics/transportation sector.

Major Activities to Improve Energy Efficiency in Logistics/Transportation

Activities

Main content

Reduction of environmental pollution in ships

Voluntarily reduce pollutants such as nitrogen oxides, sulfur oxides, diesel dust, and carbon dioxide (CO

)

in vehicle carriers

Eco driving of cargo trucks

Improve the fuel economy of cargo trucks by recording/analyzing instantaneous speed, brake signals,

acceleration, and mileage

Transition to eco-friendly transportation

Transition to coastal shipping with lower carbon emissions than land transport

MOUs to Supply Fuel Cell Trucks in Korea

To achieve the government’s goal of procuring 10,000 fuel cell trucks by 2030, the Ministry of

Environment (Korea) provides subsidies for the purchase of fuel cell trucks; the Ministry of Land

(Korea), Infrastructure and Transport offers fuel subsidies to reduce the operational burden of

fuel cell trucks; and the Ministry of Trade, Industry and Energy (Korea) provides development and

demonstration support to improve the performance of the trucks, while logistics companies such

as Hyundai GLOVIS are preparing for full conversion to fuel cell trucks. Under the circumstances, we

plan to mass produce and distribute fuel cell trucks in earnest starting in the second half of 2022.

Other Types of Cooperation for the Supply of Fuel Cell Trucks

Partner

Content

Pyeongtaek City

Supply a total of 850 fuel cell trucks and buses to Pyeongtaek by 2030

POSCO

Begin supplying fuel cell trucks in 2025 and promote phased conversion

for 1,500 trucks at the steelworks

Hyundai Steel

Use fuel cell trucks to transport mobility parts for short/medium distances

Cooperation on energy transition

by major suppliers

Encourage carbon reduction in

the supply chain of key raw materials

Carbon neutrality achieved by

the supply chain

2019 (Base Year)

2030

2040

Apply low-carbon

raw materials

2045 (Target Year)

Carbon neutrality

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1. Introduction

Transportation

In 2022, we offered them training to improve awareness of carbon reduction

and enhance working-level capabilities, while publishing and distributing an

implementation guide that they must follow to promote carbon neutrality. In

the second half of 2022, we plan to specify the carbon reduction criteria and

targets that will apply to suppliers and operate various support programs

to contribute to their carbon reduction efforts through the construction or

expansion of smart factories.

In particular, the results of the 2021 supplier carbon emission survey show

that tires, aluminum wheels and battery manufacturing industries have

a high intensity of carbon emissions, and the top 92 suppliers (more than

5,000 tonnes of carbon emissions based on our purchases) account for

approximately 75% of total supply chain emissions. We will induce them to

pursue carbon reduction while helping them to establish their own carbon

neutrality management system.

Establish supplier carbon

neutrality management system

Creating a Recycling Ecosystem

Based on awareness of extended producer responsibility (EPR) regarding the recovery and recycling of end-of-life vehicles,

Hyundai is committed to improving the recyclability of end-of-life vehicles and reducing environmental impact from end-of-life

vehicles. We comply with the end-of-life vehicle recovery and disposal regulations in countries where we sell our vehicles, while

also increasing collection, disposal and recycling rate of end-of-life vehicle, in cooperation with auto dismantling companies. To

this end, we have been strengthening design which taking recycling into consideration at the vehicle development stage, and

are shifting from a linear (production-consumption-disposal) to a circular (production-consumption-regeneration) business

system by evaluating and applying materials and parts from the perspective of recyclability.

Recycled Materials and Recycling Technologies

Designs for Recycling

Having recognized that expanding the use of recycled materials in an eco-

friendly way will play an important role in achieving carbon neutrality, the

company designs its new vehicles by taking into account the need to reduce

carbon and pollutant emissions and promote the circular use of materials

during the development stage. On the back of such design practices,

Hyundai vehicles are 85% recyclable, and the recyclability rate rises to 95% if

the recovery of thermal energy from waste disposal is included. In particular,

ferrous and non-ferrous materials, which account for approximately 70% of

our vehicle parts and materials, are mostly reused and recycled during the

scrap phase. Going forward, we will reinforce eco-friendly factors, including

natural and biomaterials as well as recycled materials, in the new car design

process and continuously enhance the environmental performance of non-

metals such as plastic, glass and rubber.

Increasing the Use of Recycled Materials/Natural Materials

and Biomaterials

Hyundai is leading the circular economy by focusing more on plastic

recycling. We are striving to improve the recycling rate of waste resources

generated by the existing end-of-life vehicle network, and we also operate

the Resource Circulation Council, launched in 2021 aimed

at seamless

implantation of related tasks. Recycled plastics recovered from scrap car parts

are no longer limited to wheel guards, undercover parts, battery trays and

fan shrouds, as work has now begun to expand recycling to include lamps,

exterior parts, and closure parts. In addition, we make continuous

efforts to

find ways to recycle waste resources as a means to securing a stable supply

chain for recycled plastics, while reviewing plastic recycling in various fields

such as marine and agricultural pollutants.

Circular Economy

“Re:Style” Upcycling Project

Hyundai constantly explores new uses for parts and materials with a low recycling rate, such as leather seats, glass, and airbags generated during the scrapping

process. Hyundai’s Re:Style project aims to spread upcycling through a unique collaboration between the worlds of fashion and automobiles. Through the

project, we introduced jumpsuits made of scrap leather seats, bags made of discarded car carpets and jewelry made with scrap glass, the proceeds of which

are donated to the British Fashion Council to promote eco-friendly fashion products. We will continue exploring ways to create new values for waste generated

in the process of scrapping cars, while taking the lead in promoting sustainability in all industries including automobiles and fashion.

Marine Ecosystem Restoration and Upcycling Project

In partnership with Healthy Seas, a marine conservation organization, Hyundai promotes marine pollution-related education while working to prevent

marine pollution and restore the marine ecosystem. We began our first action on Greek beaches, while planning to expand our efforts to other European

countries including Norway, Germany, Britain, the Netherlands, Spain, Italy and France. Central to the restoration of marine ecosystems is the collection

of abandoned fishing nets by a team of volunteer divers. The collected fishing nets are processed into ECONYL®, a biodegradable material made of nylon

recovered from upcycled nets and cloths, and we are considering applying ECONYL® as a material for Hyundai vehicles.

“Re:Style” Upcycling Project

Marine Ecosystem Restoration and Upcycling Project

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1. Introduction

The recently launched Genesis brand models, such as GV60, Electrified

GV70, and Electrified G80, use recycled and biomaterials as their interior

materials. Hyundai has processed yarn from recycled PET bottles into knitted

and suede fabrics and applied them to the head linings, pillar trims, sun

visors, package trays, and luggage trims of its GV60, Electrified GV70, and

Electrified G80 models.

In addition, we have processed bio-yarn mixed with wool and PET into

fabric and applied it to the seat covering of Electrified GV70, and applied

eco-friendly PU artificial leather containing bio-polyol derived from corn/

sugar cane to seat coverings and door trims of GV60. Going forward, we will

develop yarn from waste fishing nets into BCF fabrics for carpets and apply

them to the floor carpet of the 2023 Genesis G90.

We are also establishing a strategic cooperative relationship for the recycling

of plastics with leading companies in the chemical industry at home and

abroad, and hold technical meetings on a regular basis. Through such

processes, Hyundai specifies and clarifies technology roadmap for pursuing

a more efficient application of recyclates.

Hyundai continues to develop eco-friendly materials using various natural

resources and parts based on them. Leading example includes the

development of a TPO sheet for internal parts with a bio content of 20%

using non-food resources. It is a sheet suitable for automobile interior parts

created through a process of extracting, converting, and polymerizing

ethanol from sugar cane discarded during the production of sugar. We

also have developed eco-friendly PU artificial leather by manufacturing,

processing, and applying bio-polyol extracted from corn starch, as well

as an eco-friendly artificial leather that reduces carbon dioxide emissions

by 47% compared to petroleum-derived PU artificial leather. We continue

developing a bio-composite material using coffee grounds in order to

convey the images of premium Hyundai brands and their eco-friendliness

to consumers. In particular, bio-composite materials using Starbucks’ coffee

grounds have been expanded their scope to include parts development

stage. We are also developing eco-friendly parts by producing real wood

sheets from recycled wood, whiskey/oak barrels and newspapers, while

developing technologies to improve product marketability through the

application of upgraded interior parts.

Recovering and Recycling End-of-Life Vehicles

Establishing the End-of-Life Vehicle Resource Circulation System

In 2011, Hyundai signed an agreement with the Korean Ministry of

Environment to implement a pilot project to advance the recycling system

for end-of-life vehicles by justifying the adoption of EPR in the automobile

sector after introducing it to packaging materials and electronic products. As

part of this project, we provide vehicle dismantling manuals and necessary

training to scrap car companies, subsidize the recycling of materials that

are difficult to recycle, and support the eco-friendly disposal of waste

refrigerants contributing to climate and ecosystem change, as well as

continuously improving resource reuse and recycling rates at the end-of-life

vehicle stage in collaboration with scrap car recycling companies. In 2021,

such collaboration enabled us to recover about 195,000 tons of resources

at the end-of-life stage, with the recycling rate of end-of-life cars reaching

82.6% without including heat recovery and 92% when included. By the way,

Hyundai does not have a financial benefit from the end-of-life vehicles’ take

back programs.

Resources Recovered from End-of-Life Vehicles

(Unit: Tons)

2018

2019

2020

2021

Volume of annual recovery

262,775

261,971

209,754

195,370

Hyundai’s Principles for End-of-Life Vehicle Dismantling and Recycling

Virtuous Circulation System for Batteries

Recycling Second Life Batteries

Eco-friendly Business Based on Second-Life Batteries

Based on the battery life cycle, Hyundai is establishing an eco-friendly

battery circulation system that pursues sustainability through the recycling

and reuse of second life batteries. The battery life cycle consists of an eco-

friendly loop encompassing manufacturing to use, reuse of batteries after

use, extraction of materials from finally discarded batteries, and application

of the extracted materials to battery manufacturing. We launched a TFT in

2022 to establish a group-wide cooperative system throughout the battery

life cycle, while exploring green business models and promoting advanced

technology development.

Establishing the Second Life Battery Recovery System

In partnership with Hyundai GLOVIS, we are building up a global network

and transportation control system to collect and transport used batteries

discharged from various places including junkyards and dealers around the

world. Hyundai GLOVIS developed and acquired a patent for a dedicated

platform container that can transport hard-to-handle used batteries safely

and effectively, and is equipped with logistics processes and systems that meet

the complex and diverse regulations of various countries. We will use Hyundai

GLOVIS’ logistics know-how and network to complete the link between

recovery and front-to-back business throughout the battery life cycle.

ESS Business Based on Second-Life Batteries

Hyundai has been conducting pilot projects to reuse second-life EV batteries

for energy storage system (ESS). In December 2020, we became the first

company in Korea to obtain approval to give a special regulatory sandbox

demonstration of an energy storage device for reusing second life batteries.

Having built a 2 MWh ESS and a 300 kWh ESS, respectively, at our Ulsan

plant and the Gongju plant of OCI, our demonstration partner, we launched

solar power-linked commercial operations in January 2021. The Ulsan plant’s

pilot project showcases our eco-friendly renewable energy power plant

model, which combines a solar power plant on a temporary parking lot for

produced vehicles with an ESS that reuses second life batteries. In April

2022, in cooperation with the Korea Water Resources Corporation, we built

a new 400 kWh ESS in Busan Eco Delta Smart City, which will be used in

the P2P-based power transaction pilot project. Going forward, Hyundai’s

various ESS pilot projects based on second-life batteries will be transferred

to Hyundai GLOVIS, which is planning to convert into a full-fledged second-

life battery reuse business equipped with a unified pipeline ranging from a

recovery system to a reuse business.

Remanufacturing Business for After-Sales Service

The high-quality second-life batteries generated by our battery lifecycle

are linked to Hyundai MOBIS’ remanufacturing business according to

classification criteria of Hyundai MOBIS. Hyundai MOBIS has established a

collection system and a remanufacturing base that use the domestic and

global after-sales parts supply chains to remanufacture purchased/collected

second-life batteries into batteries for old vehicles, and provides an after-

sales service, thereby prolonging the service life of batteries.

Establishing a System to Extract and Recycle Valuable Metals from

Second-Life Batteries

Second-life batteries that cannot be remanufactured or recycled via

Hyundai’s battery circulation system are disassembled and sent to a recycling

business that extracts from them valuable metals such as lithium, cobalt, and

nickel. Hyundai is concentrating on securing technology that can recycle a

large amount of second-life batteries in preparation for an era in which a far

larger quantity of second-life batteries will be produced. In addition, we will

complete the circulation system of batteries by taking the initiative in linking

secured raw materials with battery manufacturing processes.

Eco-friendly End-of-Life Car Service

In response to customers’ desire for eco-friendly ways of scrapping vehicles,

Hyundai provides a one-stop service that assists its customers through the

vehicle recovery, dismantling, and recycling processes. When a customer

applies for the service at Hyundai’s website, we pick up the scrapping vehicle

at the time and place desired by the customer, after which the vehicle is sent

to an eco-friendly junkyard for eco-friendly dismantling and recycling.

Carry out the dismantling

process indoor

Store recovered parts and

materials indoor

Prevention of soil and water pollution

Recover liquid waste and A/C

refrigerant by type

Recycle recovered parts and

materials

Resource circulation, prevention of global warming

ESS

Industrial

applications

Reuse

Battery recovery

(car replacement/

scrapping)

Battery

remanufacturing

(vehicle

after-sales service)

Sales during

after-sales

service

Battery

diagnosis

Recycling

extracting raw

materials

Used battery

Life cycle extension and reuse

Malfunctioning battery

Repair to recover performance

Battery

manufacturing

(new production)

Resource

circulation

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1. Introduction

Resources Usage in Business Sites

Corporations are largely responsible for the depletion of the world’s resources, and so is Hyundai as well. Due to climate

change and reckless business activities, resource shortages including water are getting worse day by day while environmental

issues such as air and water pollution are also causing great harm to the earth and all living things. In addition to these direct

environmental risks, companies face a variety of crises. The three R’s in resource – reduce, reuse and recycle – have become

more importance than ever in the face of raw material risks cause by war and inflation and increasingly stringent environmental

regulation to strengthen the circular economy. In response, Hyundai makes continuous efforts to use resources more efficiently

and responsibly through the three R’s.

Raw Materials Efficiency

Global inflation and rising uncertainty have led to rising raw material prices,

a factor that directly affects operating profits. Hyundai is therefore striving

to minimize the risks associated with raw materials by improving its raw

materials efficiency. We place particular emphasis on the efficiency of steel

that is easy to sort and recover in order to recycle it repeatedly. In 2021,

the Asan Plant cut down its iron consumption by 160 tons by reducing the

size of the blanks in the new Grandeur and 8th-generation Sonata models.

Meanwhile, HMMR is striving to recycle not only steel but also various

other materials to improve its raw materials efficiency. In 2021, HMMR not

only recycled 28,044 tons of scrap iron, but also 11,021 tons of cartons and

3,837 tons of plastics, while HMB saved 138 tons of scrap iron and 27 tons

of other materials during the year mainly attributable to efforts made at its

pressing plant.

Water Reuse

As the global water shortage caused by climate change intensifies, a number

of risks associated with water resources have already emerged. The World

Resource Institute has warned that seventeen countries, including India and

Iran, where about one quarter of the world’s population lives, are at risk of

running out of water resources.

Zero Waste

In the automobile production process, not only iron and aluminum but also

various other kinds of waste materials are generated. Hyundai recycles most

of the metals it uses, such as iron and aluminum, and also recycles waste

paint, waste thinner, packaging materials and sludge as much as possible.

In 2021, we recycled 91.5% of all waste materials generated at our business

sites, while treating difficult-to-recycle waste in an environmentally-friendly

way. We are also increasing the amount of recycling by promoting the

recycling of waste that was previously incinerated or landfilled.

In 2021, the Asan Plant recycled coated waste furniture generated from the

renovation of its offices and dining halls rather than incinerating them, while

the Jeonju Plant is working to recycle waste foundry sand rather than landfill

it. In China, the Beijing Plant has reduced its final waste production by 180

tons by changing the method of drying paint chips generated by its paint

shop. HMB has raised its waste recycling rate by implementing the Zero

Landfill Campaign since 2018. To achieve the goal, it has also continuously

monitored its use of chemicals to reduce the amount of sludge while

recycling paint shop packages and construction waste.

Reducing Pollutants

In order to respond to air and water pollution preemptively, Hyundai is

applying stricter in-house management standards than the legal standards

of the countries in which its business sites are located. We are expanding the

use of water-soluble paints to reduce the amount of air pollutants, especially

volatile organic compounds (VOCs), while reducing air pollutant emissions

by strengthening the monitoring of environmental prevention facilities, such

as regenerative thermal oxidizers (RTOs) for oven exhaust gas treatment,

improving dust collection efficiency, and replacing aging exhaust facilities.

Meanwhile, for the effective management of water resources, an issue to

which Hyundai’s local communities pay keen attention, we are striving

to improve water quality environment and ecosystem by setting water

pollutant management and reduction goals for each business site.

Although it is difficult for the Ulsan Plant to check the amount of wastewater

it transports in real time due to its vast size (approx. 6 million square meters),

it is seeking to minimize its water pollution by operating a monitoring system

based on the flow meters installed on its wastewater pipeline, which is 89

kilometers long.

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1. Introduction

In response, Hyundai aims to identify water risks that may affect its business

operations, increase water reuse, and improve its water resource efficiency.

We have not yet suffered any water shortage, nevertheless HMB has built

four groundwater pumping stations to prepare for water shortages. The

Asan Plant in Korea, HAOS in Turkey, and HMI are taking the leading role in

increasing water reuse rate.

HMI and the Asan Plant have established a zero liquid discharge system to

reuse 100% of the water they use, and the former actively responds to the risk

of water shortage due to the severe water scarcity in Chennai where HMI’s

plant is located. HMI, which began building reservoirs within its premises in

2019, can now store a total of 335,000 tons of water at six reservoirs as of the

first half of 2021. It has also linked all the drainage canals within its premises

to collect as much water as possible when it rains. Having installed a super-

large pump capable of pumping 4,000 tons per hour in the low-lying area

of Plant 1, HMI has increased the maximum precipitation that it can collect

from about 500 tons to 1,000-1,500 tons per millimeter of rainfall. HAOS

recycles 42% of its water.

In addition, HMB and HMMR reuse pure water and washing water in their

painting factories, while HMMC has increased its water reuse through

continuous campaigns and inspections.

The Jeonju Plant has minimized its air pollutant emissions by investing

KRW 1.5 billion in air quality control facilities in 2021. It installed an activated

carbon dust collector to remove air pollutants generated during the

painting repair process, while improving air pollutant removal efficiency by

replacing the filling inside the scrubber in the injection/melting line at the

materials plant.

Input and Output at Business Sites

2019

2020

2021

Resource Inputs

Energy consumption (MWh)

7,680,491

6,791,668

6,169,739

Energy consumption per vehicle

produced (MWh/vehicle)

1.71

1.82

1.59

Water consumption (Tons)

11,770,200

10,307,878

9,275,209

Water consumption per vehicle

produced (Tons/vehicle)

2.63

2.75

2.44

Raw materials (steel and aluminum)

consumption (Tons)

1,070,595

1,031,112

1,138,929

Raw materials (steel and aluminum)

consumption per vehicle produced

(Tons/vehicle)

0.242

0.276

0.293

Outputs

Waste discharge (Tons)

633,300

498,318

538,772

Waste discharge per vehicle produced

(Tons/vehicle)

0.143

0.133

0.138

GHG emissions (Scope 1/2, tCO

2,705,383

2,396,316

2,384,204

GHG emissions per vehicle produced

(Scope 1/2, tCO

e/vehicle)

0.603

0.642

0.616

Air pollutant emissions (Tons)

1,404

936

1,211

Air pollutant emissions per vehicle

produced (kg/vehicle)

0.317

0.251

0.311

Water pollutant emissions (kg)

435,473

289,487

296,321

Water pollutant emissions per vehicle

produced (kg/vehicle)

0.098

0.078

0.076

VOC

emissions (Tons)

10,944

11,047

10,756

VOC emissions per vehicle produced

(kg/vehicle)

2.47

2.65

2.76

VOC: Volatile Organic Compounds

Management of Harmful Substances

Hyundai is committed to minimizing and strictly managing all harmful substances used in its products or generated by its

worksites. To this end, we classify harmful substances not only in our products but also in production plants and take the

appropriate measures according to the domestic laws and international standards. In December 2002, we established our

own management standards for harmful substances (four major heavy metals), and since then we have been responding

preemptively to the rules and regulations on harmful substances such as the Occupational Health and Safety Act and the

Chemicals Control Act of Korea and the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) of the EU

to protect the health and safety of all our stakeholders, including customers and employees, and to minimize adverse effects on

the local ecosystem.

Management Process of Harmful Substances

Hyundai classifies and manages harmful substances in three stages –

prohibition of use, limited use, strengthened management – according to

international standards and initiatives. Substances classified as “prohibition

of use” are banned from use as high-risk regulated substances for which

substitutes must be found, while substances falling into the category of

“limited use” can only be used for purposes specified in the exception article,

and those falling into the category of “strengthened management” can only

be used under constant monitoring and systematic management.

Although we strive to minimize harmful substances under internal standards,

it is difficult to completely block harmful substances from products because

automobiles consist of many thousands of parts. We therefore require

the same management standards for harmful substances to be observed

throughout our supply chain in order to ensure that the products that

are delivered to us do not contain any regulated substances. Since 2004,

Hyundai has applied the International Material Data System (IMDS), jointly

operated by global automobile manufacturers, to systematically manage

information on harmful substances in the materials and parts manufacturing

stages, among others. We also apply the Material Analysis Management

System (MAMS), developed in-house, to conduct risk assessments based on

information on parts collected from the development/design stage of a new

vehicle, thereby blocking the use of high-risk substances from the outset.

Moreover, in order to respond to newly regulated substances, we investigate

the inclusion of regulated substances during the new car development stage

based on the substance information registered with the IMDS. Hyundai also

preemptively checks information on substances that are liable to change

during the mass production processes through parts and material analysis

and inspections during regular supplier site inspections.

Status of Harmful Substances Management

Hyundai strives to prevent the risk of accidents by preemptively reviewing

newly announced harmful substances and finding and applying alternative

substances. Upon handling hazardous chemicals, we maintain a safe

working

environment by utilizing the integrated monitoring system of environmental

facilities to check for leakages of hazardous chemicals in real time.

Since 2003, we have been sharing information on domestic and international

harmful substance regulations and response requirements with our

suppliers, as well as strengthening suppliers’ management of harmful

substances, whenever necessary, by helping them to set up their own

systems of response to harmful substance regulations, in addition to running

annual IMDS user trainings to improve the consistency of IMDS data.

Response to Harmful Substances Regulations and Initiatives

Hyundai supports international regulations, standards, and initiatives

concerning harmful substances and manages harmful substances based on

them. We preemptively develop and use alternatives to harmful substances

whose prohibition is anticipated at home and abroad, while striving to ban the

use of high-risk substances ahead of the European ELV (End-of-Life Vehicles)

and REACH regulations, the leading regulations governing harmful substances.

Persistent organic pollutants (PFOAs) that are resistant to environmental

degradation accumulate in the body of animals and plants through the

food chain, causing disturbances in the immune system and damage to

the central nervous system, thereby adversely affecting the ecosystem and

human health. As the related regulations have recently been considered in

full swing, Hyundai has established the preemptive countermeasures. As for

perfluorinated compounds (PFAS), which will be banned in Europe, we will

take preemptive actions and replace them by the second half of 2025.

Management Standards for Four Major Heavy Metals

Starting in the European market in July 2003, Hyundai has gradually

banned the use of the four major heavy metals – lead, cadmium, hexavalent

chromium, mercury – which may accumulate in the human body and

cause heavy metal poisoning. In addition, we prohibit the use of high-risk

substances such as brominated flame retardants. Hyundai manages such

harmful substances in accordance with the harmful substance management

standards established in December 2002.

Strengthening the Management of Harmful Substances

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1. Introduction

Social

Hyundai values and respects all its stakeholders and,

most notably, spares no effort in supporting its employees

and suppliers, who play a pivotal role in achieving sustainable

growth, so that they can unlock their full potential.

In the meantime, we pursue constant innovation with

the aim of providing differentiated value to our customers,

our raison d’être, while scaling positive impact for

local communities on the basis of win-win partnerships.

3.1

Employees

3.2

Suppliers

3.3

Customers

3.4

Social Contribution

Winner of the “Brilliant Kids Motor Show” which depicts the future mobility imagined by children

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1. Introduction

Strategic HR Management

Hyundai’s HR management is focused on responding preemptively to major ongoing changes in the market environment, such

as the transition to electrification and competition over autonomous driving, and thus promotes HR management activities

enhancing the new growth engines in cutting-edge areas such as PBV, AAM, and robotics. While operating a recruitment system

that can secure talents with the skills and capabilities necessary for its “mobility innovation” and “great transformation into

new growth engines,” Hyundai quantitatively analyzes information obtained from its evaluations of employees’ performance,

competency identification, organizational engagement, and social relationships in order to establish a mid- to long-term

HR management plan based on the comprehensive analysis of data. At the same time, we provide our employees with new

opportunities for personal growth by operating a learning support system that empowers them to develop their unique

competencies and career paths on their own initiative.

Employees

Talent Recruitment and Retention

Direction of Talent Recruitment and Retention

Hyundai is fulfilling its social responsibility of creating jobs even amid

a business environment in which uncertainty is increasing due to the

global spread of COVID-19, disruptions in the supply of major parts, and

the paradigm shift of the automobile industry towards future mobility.

In 2021, we hired some 2,000 general and research positions, about

twice as many as in 2019 prior to the global pandemic. Most notably, in

the midst of youth unemployment that is emerging as a serious social

problem in Korea, Hyundai is contributing to the creation of jobs for

youth by hiring young people (aged 19-34) for about 88% of all its new

general and research posts. Furthermore, we are striving to improve the

quality of recruitment by reorganizing recruitment process, expanding

quantitative recruitment initiatives, launching a new internal IT system

and website, enhancing the skills of our HR personnel, and developing

a new recruit training program tailored to the recruitment environment

and preferences of young people.

Job Rotation System

While securing external talents at the right time, Hyundai promotes job

rotation so that existing employees can demonstrate their capabilities in

the right place. Based on the needs of its departments and the aspirations

of its employees, Hyundai implements job rotation for such purposes as

promoting a positive workplace culture, improving employees’ productivity,

and developing corporate capabilities and technologies. We facilitate the job

rotation system as a way to reduce cost and time required to hire and train

new employees, while also providing existing personnel with opportunities

to develop their managerial skills by experiencing various tasks.

Year-round Recruitment System

Hyundai became the first company in Korea to abolish the long-standing

annual recruitment system, to hire people as and when necessary. For the

past two years, it has had a positive impact on the country’s recruitment

market. First, the company no longer has to recruit people based on its

rigid recruitment standards. By hiring people as needed, Hyundai has

been able to be more flexible to changes in its business. Second, the new

policy is drawing attention as a way to respond preemptively to changes

in the current labor market led by Millennials and Generation Z. The young

generations, who tend to place more importance on their own career and

personal life, account for a significant portion of the company’s employees.

Unlike the former annual recruitment system, whereby the company hired

people from the employer’s perspective at a fixed time of the year, the new

recruitment system allows people to apply for the right jobs at any time, and

is consequently expected to meet the demands of the future labor market.

Employee Referral Process

HR Department

Recruitment ads

Hiring process

Employing finalists

Potential hires

Application registration

Recommending

employees

PR for potential hires

Writing recommendations

Incentives awarded

Non-face-to-face Recruitment Process

Since the onset of the COVID-19 pandemic, Hyundai has been invigorating

the mobile and online recruitment process. The company has built the

infrastructure and procedures required to conduct the entire recruitment

process online, including the review of job application documents and the

conduct of job interviews. Contrary to initial concerns about the mobile and

online recruitment process, the new system has reduced applicants’ costs

and saved the company’s time by enabling efficient and timely recruitment

of talented applicants. Going forward, we will expand the non-face-to-

face recruitment process, except in cases where face-to-face interaction is

essential due to the nature of the tasks involved.

Employee Referral System

Hyundai operates an employee referral system in order to secure

outstanding talents in the area of strategic technologies including R&D,

electrification, AAM, robotics, and software. This system enables the

company to verify the job expertise of recommended, experienced

candidates, while allowing the latter to settle in and adapt to the organization

easily thanks to their relationship with the employees who recommend

them. In order to invigorate the system, the company is widening the

recommending employees’ access to its recruitment process to the extent

that fairness is not compromised, while offering them incentives related to

the recruitment of the persons recommended by them.

Hyundai’s Talent Recruitment Strategies

•

Establish a pipeline to discover excellent talents in the field of future

strategic technology and timely recruit them

•

Operate a regular recruitment system centered on the types of job expertise

required on-site and promote continuous improvement of the system

•

Run various internship programs such as H-Experience in order to

discover excellent talents at home and abroad

•

Implement a recommendation system to recruit experienced

personnel through employees’ social relationships

•

Expand the mobile and online recruitment process to increase

the efficiency of recruitment-related tasks and costs

Non-face-to-face recruitment

Employee referral system

Recruitment website

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1. Introduction

“H-Experience” to Nurture Talents

As a representative Korean company, Hyundai is faithfully fulfilling its social

responsibility of nurturing young talents by expanding its internship program,

which provides young people with opportunities to gain experience in

various jobs. We run the H-Experience internship program for college

students as a part of our efforts to provide them with job opportunities and

secure outstanding talents in advance. In 2021, we expanded the program

by 250% compared to the previous year, and accordingly the number of

jobseekers whom we have hired through the internship program has also

increased. In addition, in 2021, we continued to run the Global H-Experience

internship program, which we launched in 2020 in a drive to discover global

talents among students at home and abroad and build networks with them.

During the year, Hyundai launched the ASEAN H-Experience internship

program for young people from ASEAN countries, which are growing as a

strategic region for the company, in an effort to further expand the diversity

of its internship program. As such, the program has successfully extended

internship opportunities to young people from the ASEAN region who are

preparing for employment opportunities in Korea. We are also making

continuous efforts to nurture future talents through various channels,

including industry-academia cooperation with major partner schools, in

addition to running the internship programs.

2022 Hyundai Mechatronics Traineeship

Hyundai hires interns to perform data-based, high-level diagnostics and

maintenance work as well as checking functions at its head office and

service centers nationwide. Through the Service High-Tech Internship

Program, it offers full-time contracts to interns who perform well. The

internship program will enable the company to nurture talents who can

handle not only regular automobile maintenance but also high-level

maintenance tasks such as data-based analytics and accident prevention.

Systematic Recruitment System and Process

Since shifting to the year-round recruitment system in 2019, Hyundai has

promoted a full-scale reorganization of its recruitment process in a bid to

respond to large-scale hiring needs. In addition, starting from 2022, we will

completely reorganize our recruitment website and recruitment system

in line with ongoing changes in the recruitment environment in order to

operate a data-based, consistent recruitment process, while seeking to

provide a more intuitive and convenient recruitment experience to internal

and external customers.

As we changed to field-led year-round recruitment, relevant departments

have increased their participation in the recruitment process. Accordingly,

we have set a Recruit Support Center in place at each of large-scale

business sites to improve the quality of recruitment process by enhancing

professionalism in the hiring process. Meanwhile, to ensure fairness in

recruitment process, Hyundai has begun operating a selection process

in which various decision makers from the business and HR departments

participate, whereby the multifaceted strengths of talents are identified

through a complex evaluation process designed to verify their excellence

and suitability.

In addition, we conduct regular internal audits to continuously improve

recruitment process and enhance transparency, while constantly

raising employees’ awareness about the importance of fair recruitment.

Going forward, we will develop a recruitment inspection checklist for a

sophisticated system designed to self-check fairness in our recruitment

process, while continuing to secure transparency by extending the period

and expanding the scope of internal audits.

Strategic Workforce Planning

2022 Hyundai Mechatronics Traineeship

2021 Global H-Experience

Measuring Employee Performance

Hyundai monitors and checks its employees to determine whether

they are carrying out their work according to key performance

indicators (KPIs) established in advance and whether they are

achieving their individual performance goals. The company considers

it a criterion for outstanding talents to receive positive feedback on

their performance from superiors and colleagues, and to exceed their

individual performance goals over an extended period of time.

Identifying Skill Gaps

Hyundai sets essential competency requirements for each position

and

determines to what extent each of its individual employees must meet

those requirements. For employees in leadership positions, the company

categorizes them into five types, namely, “strategic”, “nurturing”,

“responsible”, “pushing”, and “collaborative”, and measures their abilities

in their respective category so as to identify outstanding leaders.

Employee Retention

Hyundai conducts an annual organizational culture assessment of its

employees to determine whether there is any improvement that needs

to be made in its HR and welfare systems to prevent the departure of

outstanding talents. When it is anticipated that an employee intends

to leave the organization, the company identifies the reason for the

person’s departure and promptly takes measures.

Network Analysis

Hyundai derives solutions to collaboration problems by analyzing

relationships between departments. It quantitatively analyzes the frequency

and duration of collaboration to identify inter-departmental relationships

and manages any isolated or marginalized department accordingly. To

this end, we operate and manage a database that specifically records

problems that occur during inter-departmental collaboration.

Competitive Intelligence

Hyundai identifies the anticipated competitive situation due to its

entry into new business areas, and, based on the results, defines the

capabilities and technologies required to overcome any difficulties.

When implementing irregular recruitment, employee referral, or intern-

to-full-time conversion, the company places priority on selecting

candidates equipped with its pre-defined competencies and skills.

Recruiting & Hiring

Hyundai identifies outstanding talents by analyzing the profiles of

talents who have shown interest in the company’s recruitment,

participated in the hiring process, or been referred by its employees.

Further, the company operates a differentiated and diversified

recruitment process to secure global talents, including holding briefing

sessions for overseas master's and doctoral students.

Hyundai Talent Analysis

Opportunity

Use

• Use the results of the

talent analysis in the

core competency

analysis of the

company’s manpower,

recruitment process,

portfolio of HR planning,

recruitment strategy,

etc.

Outcome

• Increase collaboration

between departments

through

organizational

network analysis

• Conduct organizational

culture assessment and

make improvements

to analyze potential

reasons for leaving

the organization

and establish

countermeasures, etc.

• Introduce various

methods of talent

analysis to secure

excellent human

resources and

analyze their relative

competitiveness

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Cultivating Customer-centric Leaders

At Hyundai, leaders always put the interests of customers first when making

decisions. They are also committed to building a desirable ecosystem where

humans and nature can coexist in a bid to create a better future for the

upcoming generations who will be our potential customers. To empower our

leaders to fulfill their roles and responsibilities, we help them to internalize all

the capabilities required to not only excel in their respective fields but also

to respond quickly to the rapidly changing business environment company-

wide. Hyundai strives to lay the foundation for changes in its leaders’

behaviors to result in changes in their organizations and members as well.

Job and Leadership Training in 2021

(Unit: Hours)

Classification

Job

Leadership

Total

Training hours

26,804

2,271

29,075

No. of courses

(Learning Lounge)

3,670

(19 categories)

931

(3 categories)

4,601

Total operating hours for each course (Not total hours based on number of participants)

Number of courses offered on “Leaning Lounge”, available for all employees

Constant Feedback from/to Team Leaders

New Growth System

“What learning solution will be

the best for me?”

“How to share my work skills?”

Continuous learning and knowledge sharing

Learning curation

• Internal/external

program

• Learning maps

Knowledge sharing

activities

•

In-house instructors

•

Creating and sharing

contents

“Growth activities are accumulated

as data and reflected

in performance evaluation!”

Using growth results

Growth data

• Learning

experiences

• Knowledge-sharing

experiences

Use by HR

Department

• Evaluation/

promotion/career

development

Setting a growth plan

“What’s the career path to

become an expert?”

“What capacity-building should I need?”

Growth guide → Career planning

Capacity assessment →

Capacity improvement plan

[Members] Feedback on progress and outcome per task

[Leaders] Reviews/feedback opinions (Recommended at least once a month)

View-T

Establish

goals / Set up

tasks to be

performed

Evaluation

• Make comprehensive judgement about not only work performance but also members’ efforts and work progress

• Check support necessities through timely feedback during work progress, and acknowledge and encourage

team members to do their best

Leaders

• Register and convey everything about work planning, work progress, support requests, restrictions, and results

Team members

•

Share and give feedbacks on work performance whenever needed throughout the year between leader and team members

• Outcomes of sharing and feedback are used for personnel evaluation

How to use it?

• Leaders and team members

Targets

Performance Evaluation System

For the efficient management of employees’ performance, Hyundai

conducts MBO performance evaluations using individual objective

standards as well as the multi-faceted evaluation and the ranking evaluation.

The MBO performance evaluation concerns general and research staff.

However, as those who are excluded from the appraisal also prepare

personal goals, and feedback is given on their performance, all employees of

Hyundai are ultimately subject to the MBO-based performance evaluation.

Multidimensional Performance Appraisal

(Comparative Evaluation Included)

Hyundai conducts the multi-faceted evaluation in two stages – the

Leadership Surround View and Peer Surround View. In 2021, we conducted a

multi-faceted evaluation of 95.5% of our employees (executives and general

and research staff), and in 2022 we have 100% of our employees conduct

comparative analysis of peers in the same position, thus helping them

ensure objective self-evaluation.

24/7 Feedback (View-T)

On the “HR Lounge (HR support system) – View-T” page, leaders and team

members can freely share performance- and growth-related contents

and exchange feedback 24/7. Team members can appeal the results of the

evaluation of their work performance at any time, while leaders can provide

feedback on their members’ performance at any time without having to face

them. They are also free to communicate whenever the need arises for the

purpose of sharing information and ideas or providing feedback.

Performance-based Compensation

Fair Evaluation and Compensation System

To inspire its employees to always do their best, Hyundai operates an equal

and fair compensation system regardless of their gender or nationality. It has

established a compensation system in which fair compensation is granted

through various kinds of employee evaluation, such as the multi-faceted,

MBO, relative, and regular evaluation, while improving its personnel system

to ensure that its employees’ performance improvements can be reflected in

their personal compensation.

Compensation System Aligned with Performance

Hyundai strives to ensure that all of its employees receive fair compensation

based on their performance. In particular, we have introduced an absolute

evaluation system that compensates for the shortcomings of the existing

relative evaluation method, and then reorganized our compensation system

so that variable pay items can be fairly determined according to individual

work performance. In addition, we inspire our employees to work harder by

sharing any excess profits from business performance with them each year.

Employee Stock Ownership Plan

Hyundai implements the employee stock ownership plan (ESOP) for all its

employees to improve their social and economic status, facilitate close labor-

management cooperation, and increase corporate productivity. Following

the granting of 665,870 shares in 2020, the company offered 441,671 shares

to its employees in 2021. By 2021 we had granted a total of 1,929,983 shares,

equivalent to 0.9% of total shares, to our employees through the ESOP.

Directions of Talent Development

Creating a Culture of Growth

Hyundai has been creating a self-directed learning culture and environment

in which its employees and diverse organizations can develop their

capabilities and contribute to improving the company’s performance

and long-term values. The company motivates its employees to actively

participate in self-improvement activities by connecting their performance

in this regard to its HR processes based on their individual self-growth data,

while engaging in close communication with its employees and leaders

through various communication channels so as to spread the culture of

personal growth company-wide. Also launched is the “Strategic Learning

Lab” whereby we strengthen company-wide connectivity and support the

formation and maintenance of networks among employees.

Improving Infrastructure for Growth

To empower its employees with a culture of self-directed learning, Hyundai

has established a growth platform and an all-year-round, all-employees

targeted learning system (education platform) “Learning Lounge”, and

continues to improve them. We provide our employees with customized

curation through new contents that our employees can access all year round

according to their individual learning needs. Going forward, we will introduce

a next-generation learning platform, where our employees can share not

only learning content but also their learning experiences and knowledge, in

order to further promote our employees’ self-directed learning.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Securing Professional Competencies

R&D E-Conference (R&D Technology Forum x Group Conference)

Since 1993, Hyundai has held the annual academic conference with the

goal of “securing future competitiveness” by switching to a platform

centered on the “virtuous cycle of knowledge” (production → accumulation

→ reproduction), which enables its researchers’ research outcomes to be

internalized by transforming their thesis into knowledge-sharing content.

Since 2008, participation in this system has been expanded to all Hyundai

Group companies including Hyundai research institutes based overseas.

From October to November 2021, Hyundai held a technology forum and an

academic conference concurrently under the name of “R&D Technology

Forum x Group Conference”. Through the event, we were able to present an

integrated perspective on the current status of our research activities at the

departmental level and the future direction of R&D on major technologies

in the industry. Unlike the previous operation centered on research and

general staff, the 2021 event was co-hosted by the Research Lab and

Academic Conference Division, thereby enabling the personnel of the

Hyundai Motor Group to not only present their thesis, but also to attend the

conference and share their insights into their respective technologies with

other participants. During the Conference, some 299 papers in 19 areas were

presented and shared with 3,057 participants through real-time on-site and

video presentations. Additionally, 99 papers published in video format were

uploaded to the “Learning Lounge”, an employee education platform, for five

weeks and shared with 3,365 employees.

We are planning to expand and reorganize the academic conference to focus

on core technologies based on our R&D strategy, starting in 2020, and will

also set the -offline hybrid operation process which was successful in 2021.

Car Master Training Program

In order to enhance its essential competencies as a global automobile

manufacturer, Hyundai implements a car master training program. Currently,

99.7% of its employees are participating in this sales-related training program

based around video contents. The training consists in enhancing employees’

professionalism (electrification, luxury cars), cultivating their basic product

knowledge (training on new vehicles, etc.), and strengthening customer care

(CS, CRM). Trainees have the opportunity to acquire specialized knowledge

related to vehicles and to further enhance their customer service skills. As a

result, Hyundai received higher evaluation scores in the 2021 KCSI (Korean

Customer Satisfaction Index, recognized for its long history and public trust),

and was selected as the No. 1 company in the customer satisfaction category

of the passenger car sector for the 28th consecutive year.

R&D Project-based Joint Research Programs

Hyundai has been operating a joint research program in conjunction with

leading research institutes at home and abroad to develop future-oriented

R&D technologies since 2012. Every year, 20 senior-level researchers

participate in the joint research program and apply the fruits of their research

to the company’s mass-produced vehicles and advanced technologies upon

their return to the company, thus playing a key role in helping the company

to secure competitiveness in core technologies. The joint research program

also promotes knowledge sharing to lay the foundations for internalizing

new technologies and enhancing the company’s R&D capabilities.

Results of R&D-based Joint Research in 2021

Classification

Number of times

Development of new technologies

Creation of solutions to on-site problems

Patents, research paper

Dissemination of research results

Training to Internalize Sustainability

As the international situation has become highly unstable due to the

ongoing COVID-19 crisis and the war in Ukraine, companies are working

hard to introduce sustainable management as a way to reduce uncertainty.

To position itself at the forefront of this trend, Hyundai has prepared training

programs designed to internalize sustainability for its employees. In 2021,

it conducted training on human rights, safety, environmental protection,

and quality in addition to the regular job training for employees on their

duties and leadership skills, for a total of 37,055 hours. Going forward, we

will continue expanding the learning experience of its employees to ensure

that ESG becomes a key element – and not just a fad – in the company’s

transformation.

Key Achievements and Plans of Hyundai Motor Group Academic Conference

• 19 tech conferences were held from October to

November 2021 with the participation of 3,057 people

• 1,368 abstracts were submitted, and 299 papers were presented

• The conference will be expanded and reorganized in 2022

to shift the focus to be centered around core technologies

Human rights

Prevention of sexual harassment,

raising awareness of

the disabled, etc.

Safety

Factory safety,

safety managers’ duties, etc.

Environment

Environment-related job training,

eco-friendly vehicles,

fuel cells, etc.

Quality

Quality-related job training,

on-site quality management

competency improvement, etc.

Sustainability Training in 2021

(Unit: Hours)

Classification

Job

Leadership

Sustainability

Sub total

Total

Human rights

Safety

Environment

Quality

Training hours

26,804

2,271

4,676

1,250

2,005

7,980

37,055

* Total operating hours for each course (Not total hours based on number of participants)

Areas of Sustainability Training

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Great Workplace Culture

Hyundai aims to become a company where its employees can grow and feel proud of themselves and their role in the company.

To this end, we have set three work attitudes – Bold Moves, Positive Energy, Inner Qualities – as our organizational culture goals.

Furthermore, based on the opinions of employees, we have set “Hyundai’s way of working, CoC (Code of Conduct)” and strive

to internalize it company-wide by appointing a person to take charge of changes of the organizational culture and innovation for

each organization, working together with leaders. In the midst of the prolonged pandemic, Hyundai is providing full support to

create a comfortable work environment, thereby prioritizing its employees’ convenience and welfare. Hyundai is also working hard

to create an organizational culture that allows employees to immerse themselves in their work in an autonomous and proactive

atmosphere based on active communication with and respect for their fellow talents.

Improving Workplace Culture

Diagnosis of Organizational Culture

The high level of employee engagement is one of several factors that have a

big impact on the company's performance and talent growth. In September

2021, Hyundai conducted a culture survey consisting of 71 items in seven

areas – business, people, work, leadership, HR system, infrastructure and

organizational efficiency – in which 72.9% of all its employees, including

general, research and legal staff, participated. Hyundai plans to further improve

the level of employee engagement based on the results of the diagnosis.

Results of Culture Survey

(Unit: Points)

Programs to Change Organizational Culture

Hyundai is developing a variety of organizational culture programs to

improve its employees’ work engagement centered on “Hyundai’s Way

of Working, CoC”. Such efforts include activities designed to internalize

the way the organization works and to improve “inner qualities” (work/

product quality) in order to enhance the meaning of, and initiate voluntary

changes in, employees’ work. Hyundai is striving to create an organizational

culture in which all its employees can grow and feel pride in their work,

while those in charge of change and innovation in each department are

encouraged to play a central role in the effort. It has promoted substantial

change and innovation in its work processes through “IT infrastructure”

and “H-Work Stations” that have laid the foundations for an efficient work

environment. Moreover, Hyundai is not only creating a horizontal culture but

also an autonomous and active work atmosphere in which it promotes its

employees’ creativity and challenging spirit through communication, as well

as running campaigns that advocate upgrades of its organizational culture.

Internalizing “Hyundai’s Way of Working, CoC (Code of Conduct)”

Under the title of “Kill the Company”, Hyundai conducted a survey to all

employees on ways in which they can “save” the company, as opposed to

ways in which they can “kill the company”. The results of the survey have led

to the development of “Hyundai’s Way of Working, CoC”, based on which

various efforts are being made to have its employees voluntarily comply with

the CoC by promoting positive energy, responsibility and perseverance, and

new challenges and attempts. Such efforts include the production of videos

containing the commitments of its executives and staff, from the CEO to

new employees, as well as diverse programs designed to urge employees to

implement CoC in their work performance.

Applying Customer’s Perspective

Hyundai operates an experience-oriented program that allows its employees

to explore the company’s products and services from the customer's

perspective so that they can pursue perfection to a higher standard, feel

rewarded, and immerse themselves in their work performance. In 2021,

through a total of seven new vehicle quality verification sessions, Hyundai

employees from various sectors were invited to participate as test drivers

in the final quality inspection of new car models on the verge of mass

production, so that it could carefully review even the smallest details from

the customer's perspective and guarantee the quality of the products.

We also launched a program in which our researchers and customers are

asked to drive a car and discuss product quality and driving sensibility on

an insight trip, thus allowing our product development personnel to hear

voice of customers first-hand and gain inspiration and motivation for their

technology development.

2018

2019

2020

2021

100

61.7

64.0

66.6

68.5

Town Hall Meeting

Poster for Next Big Idea contest

Way of working, CoC

Accelerating Change and Innovation in Divisions

Hyundai promotes innovation of the organizational culture at each division

in two directions – a top-down method initiated by leaders and a bottom-up

method driven by team members. The company emphasizes the leadership

of top leaders through corporate culture sessions held at the monthly

management meetings in order to lead to actual changes of behavior. We

also monitor organizational culture issues through each division’s officer in

charge of change and innovation and implement solutions based on voice of

employees (VOE).

Building a Creative Work Environment

Hyundai makes continuous efforts to improve its work environment with

the aim of establishing a flexible working system. Starting with the trial run

of the smart open office system, in which employees select spaces where

they work, in 2019, we have since improved the efficiency of individual

workspaces and expanded collaboration spaces to increase employee

satisfaction. In 2020, while we were expanding the smart office system at

the Yangjae headquarters, non-face-to-face way of working expanded due

to the COVID-19 pandemic. In 2021, we opened a total of eight “H-Work

Stations” in the Seoul and Gyeonggi region, while simultaneously replacing

employees’ personal computers with laptops, and creating a smart work

environment suitable for telecommuting through the groupware system

upgrade to increase the utilization of video conferencing and cloud services.

Adopting the Hybrid Work System

Hyundai intends to maintain remote working such as telecommuting and

H-Work stations even after the end of the COVID-19 crisis. To create an

organizational culture in which people work autonomously by immersing

themselves in “work rather than places”, we have conducted a remote

working campaign. In addition, we informed our employees of desirable

telecommuting etiquette, based on opinions collected through VOEs, in

order to form a consensus on adopting the Hybrid Work System. We also

encouraged our employees to use an IT tool for online meetings, enabling us

to maintain operational efficiency in the non-face-to-face environment.

Next Big Idea to Innovate Organizational Culture

Hyundai holds the Next Big IDEA contest twice a year as a way to encourage

its employees to create an innovative and challenging organizational

culture. In 2021, ideas related to eco-friendly technology for a sustainable

future, such as reducing carbon emissions and promoting electric vehicle

deployment, stood out. In the second half of the same year, Hyundai’s

employees submitted 2,610 ideas, the largest number ever. The company

designated 19 of the proposals as “excellent ideas” and supported their

practical implementation by the relevant departments. In addition, we

launched a suggestions platform in 2021 to allow our employees to suggest

ideas and share various opinions anytime, anywhere. We have also enabled

them to initiate change through bottom-up activities such as the “Town Hall

Meeting”, which allows two-way communication, and the “Hyundai Bamboo

Forest”, an anonymous communication channel.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Promoting Employee Diversity

As a global company, Hyundai implements a variety of programs designed to

guarantee employee diversity. To establish an equal and healthy workplace

culture, it conducts annual online education for all its employees to improve

their awareness of the disabled and of sexual harassment in the workplace,

respectively. In addition, the Human Resource Development (HRD) Center

offers a variety of training programs to foster a global mindset and respect for

diversity among employees, while the Global HR Team fosters global talents

and enhances their business capabilities through a global exchange program.

Employee Diversity Programs

Hyundai encourages the Employee Resource Group activities, in which

employees from diverse backgrounds gather to share their common interests

in diversity and inclusion through communication and cultural programs.

Participating employees can improve their internal teamwork and build external

links in order to engage in mentoring, cultural exchanges, and community

contributions based on their cultural diversity, in order to spread a positive

influence not only within the company but also in the surrounding communities.

Diversity Policy

Diversity Programs

Onboarding course for new

heads of overseas subsidiaries

(intercultural leadership workshop)

Discussing on the roles of subsidiary heads in building a healthy communication culture with members from diverse cultural backgrounds

Pre-deployment course for

overseas expatriates

Understanding cultural differences and identifying differences in the disposition of the country and appointed employees through GlobeSmart diagnosis

Basic course for team leaders

Creating an HR development culture based on the realization of individual strengths and understanding of employee diversity

Cross Cultural Seminar

Providing education courses to international employees on intercultural understanding and communication

Team dynamics workshops

Building an environment in which individuals’ diversity can be demonstrated as an organizational strength, and establishing a plan to embrace

employee diversity

Employee Resource Group

Women @ Hyundai

We create an inclusive environment that gives autonomy to female employees, customers, and suppliers’

employees. From the perspective of female employees, we provide the necessary support to improve Hyundai's brand awareness,

employee career development, and retention rate.

Female staff’s ERG

Hyundai @ Soul

Based on the diverse experiences of our employees, we discuss how to enhance the modern brand image within the Black and

African American communities. Hyundai management provides advice on how to develop cultural competencies from the

perspective of diversity.

Black and African American

staff’s ERGs

#BecauseAsian

We tap into the characteristics and perspectives of the Asian culture to develop strategies that can make Hyundai

a more successful company. We consider opportunities to leverage our employees' talents, skills, and networks.

We support Hyundai’s corporate promotions and community events.

Asian staff’s ERG

Amigos Unidos

We harness the cultural intelligence of our Latino community to generate ideas for innovative management.

We propose directions for Hyundai management from the perspective of Latino employees in the context of

the growing Latino community.

Hispanic and Latin

American staff’s ERGs

Young Leaders

By maximizing the strengths of millennials, we propose ideas, solutions, and improvements that can contribute to Hyundai’s

excellence and success while building the foundation for our employee’s individual career development and self-development.

Millennial staff’s ERGs

Equality

We provide opportunities for education, career development, networking and workplace collaboration to LGBTQ+

(sexual minorities) employees while creating a positive and inclusive work environment. We also exchange ideas to increase

Hyundai’s brand awareness within the LGBTQ+ community.

LGBTQ+ staff’s ERG

Hyundai CARES

We strive to improve the working conditions of people with disabilities and raise awareness about disabilities.

We support employees with congenital or acquired disabilities, middle-aged employees with disabilities due to aging, and

employees with children who need special care.

Disabled staff’s ERG

Stars & Stripes

We maintain a forum attended by Hyundai employees, their spouses, their families, and supporters of U.S. veterans. We provide a

safe and inclusive space for participants to have conversations about common interests, identities, etc., with a sense of belonging.

Veteran’s ERG

Basic Principles of Employee Diversity

Employees

Hyundai prohibits discrimination based on gender,

race, ethnicity, nationality, cultural background,

age, personal gender/identity, differences in

political and religious beliefs, or disadvantages in

social status, etc. without any reasonable reason,

while offering its employees equal opportunities

in employment, promotion, education, wages and

welfare.

Products and services

Hyundai considers the diversity of its stakeholders,

including customers, in the design, production

and sales processes of its products and services.

It ensures that its values of diversity and inclusion

are not violated in marketing, branding or any other

forms of internal and external public relations.

Supply chain

Hyundai monitors diversity and inclusion issues

in its supply chain to ensure that its values are

not compromised, while helping its entire supply

chain and related individuals to gain access to fair

opportunities and treatment.

Local community

Hyundai does not violate or infringe upon the

history, culture, business practices, and other rights

and interests of local communities in the course of

its business operations, and strives to contribute

to promoting diversity and inclusion among its

stakeholders, including the members of its local

communities.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

In addition, the company has established the Collective Bargaining Council

and the Labor-Management Council in accordance with the relevant laws

and conscientiously engages in discussions to improve its employees’

working conditions and resolve their grievances, while striving to boost its

corporate competitiveness through the strong partnership it has formed

between labor and management. In order to work in unison to respond

to the Fourth Industrial Revolution, electrification, and the imminent

transformation of business practices, Hyundai has launched the Future

Change Response TFT and the Job Stability Committee, which are making

notable headway. We also continue making practical efforts to improve

the manufacturing competitiveness of our domestic plants in the areas of

quality and productivity in particular.

In 2018, in preparation for employment changes and labor-management

conflicts due to the 4th Industrial Revolution, we launched the first

advisory council for the Job Stability Committee consisting of five

experts. The Committee hosted forums, seminars, and training sessions

on various topics related to the future of the automotive industry. In

2020, Hyundai appointed seven advisors for the Committee, extending

their term into the 3rd Committee in 2021. Acting as mediators between

labor and management, the councilors scrutinize employment issues

associated with the paradigm shift in the automotive industry.

Labor Union Communication Overseas

Beijing Hyundai Motor Company (BHMC) and China Hyundai Motor

Corporation (CHMC) have the Chinese Trade Unions, while Hyundai

Motor India (HMI), Hyundai Motor Manufacturing Czech (HMMC),

and Hyundai Motor Brasil (HMB) have labor unions. The company’s

subsidiaries, whose employees are members of labor unions, engage in

collective bargaining according to local labor laws in order to produce

an agreement that can satisfy the majority of employees through

mutually reasonable proposals and constructive discussions. Although

its subsidiaries in the US, Russia, and Turkey do not have labor unions,

they are striving to improve their compensation and welfare programs

through active communication with their employees.

Hyundai’s headquarter takes measures to improve its employees’

satisfaction company-wide based on the results of surveys and interviews

conducted with Hyundai employees worldwide. Each of Hyundai’s

overseas subsidiaries strives to resolve its employees’ grievances by

holding regular meetings between labor and management, operating

grievance consultation centers, and dispatching the management on

visits to business sites. As the COVID-19 situation continues and face-to-

face communication with employees is limited, each overseas subsidiary

remains committed to active communication through non-face-to-face

tools such as mobile apps.

Win-win Labor-management Culture

Labor Union Communication in Korea

Hyundai complies with the Constitution and the related laws in order to

guarantee basic rights such as workers’ right to independent association,

collective bargaining and collective action.

Welfare Benefit System

Operational Direction of the Welfare Benefit System

Hyundai guarantees its employees’ quality of life through various welfare

benefit programs. It strives to help them maintain a happy family life through

various measures designed to promote a work-life balance such as flexible

work hours, remote working, and paid leave for childbirth and childcare.

Employee Welfare Programs

Flexible work hours

• Allowing employees in general/research/legal/production sectors to determine their actual working hours on a monthly basis

• They can choose their working hours except for daily mandatory working hours (10 am to 4 pm) as long as they meet the monthly

required working hours

Remote working

• To protect employees during the pandemic, each business site implements its own telecommuting system

• Have been operating a remote working system (an optional hybrid work system including working from home or H-Work Stations)

since 2021 as a flexible working scheme for employees, beyond the initial purpose of preventing the spread of infectious diseases

Childcare

(Breastfeeding included)

• 120 minutes of paid breastfeeding time per day to female employees for a year after childbirth

In-house

daycare centers

• Offering married employees and the children of single-parent families access to in-house daycare centers

• Available at five locations: Headquarters, Ulsan Plant, Asan Plant, Jeonju Plant, and Namyang Technology Research Center

Child

Happiness Travel

• Providing hotel lodgings and meals within six months before and one year after a childbirth to employees and their spouses.

It includes up to two nights and three days at hotels approved by the company

Parental leave

• Providing up to two years of leave of absence (at least one year of paid leave) for each (adopted) child under the age of 8 or

a child in second grade to both male and female employees

• The 2-year leave of absence shall include reduced working hours for childcare and the period of maternity leave

•

Benefits such as Management performance pay, Welfare points, and Employee Stock Ownership Plan are provided even

during parental leave

Maternity leave

• Providing a 90-day maternity leave to female employees before and after childbirth (120 days for multiple pregnancies)

Reduced hours

during pregnancy

• Providing reduced working hours to pregnant employees (2 hours from the start of a shift or before the end of a shift, or 1 hour each from

the start of a shift and before the end of a shift) during the first trimester (within 12 weeks) or the last phase of pregnancy (over 36 weeks)

Reduced hours

during childcare

period

• Allowing employees with children of 8 years old or younger or a child in second grade to have reduced working hours for up to 2 years

per child (2 splits allowed in the first year and 1 split in the second)

• Three options available – 2 or 4 hours after the shift starts, 2 or 4 hours before the shift ends, or 2 hours each before and after the shift

starts and ends

Bereavement leave

• Offering a leave whose period is determined by the pregnancy period in case of miscarriage or stillbirth

Partner’s leave

• Offering up to 10 days of partner’s leave within 90 days of childbirth

Menstrual leave

• Offering a one-day menstrual leave per month to female employees

Family care leave

• Offering up to 90 days of family care leave per year to employees whose parents, children, spouses or spouses’ parents need care due to

illness, accident, or old age

Retirement Pension System

Hyundai has set a retirement pension system in place for all its employees

so that they can prepare for post-retirement life. The company provides

training on pension products to subscribers to help lay a stable foundation

for their post-retirement days while protecting their retirement pension by

accumulating a retirement pension reserve externally.

Retirement Planning

Hyundai runs a program to help its soon-to-be-retiring employees ease

into retirement. In 2021, we offered differentiated retirement planning

courses and specialized training programs to a total of 2,056 employees by

position and job group.

Retirement Pension Asset under Management

(Unit: KRW million)

Classification

As of 2021 year-end

As of 2020 year-end

Insurance products

5,840,100

5,436,225

Others

3,235

3,701

Total

5,843,335

5,439,926

Retirement Planning Courses

Targets

Managers or below

(Union members)

Senior

employees

Course

Future planning

56-60

Counseling

Basic course in

planning for life

after retirement

Intensive course

in planning for life

after retirement

Age

56-60

Participants

(2021)

1,152

173

396

335

Type

Lectures,

experiential

learning, etc.

Counseling

Lectures and

counseling

(online)

Lectures and

counseling

(online)

Curricula

•

Self-examination

for awareness

of changes and

happiness in old

age

•

Customized

education and

consulting

according to

retirement plans

•

One-on-one

customized

career

counseling

• Channing

perception

about retirement

and exploration

of careers/

interests

• Financial

diagnosis and

planning

• Career analysis

and decisions

according to

individuals’

desired paths

ESG Magazine

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4. Governance

5. ESG Factbook

1. Introduction

• Recorded zero serious accidents at domestic business sites for

4 consecutive years (2017-2020)

• Protected employees’ health and minimized production loss with

preemptive response to COVID-19

- Ran the COVID-19 Situation Room, established a rapid response

system for production lines, and upgraded the access/visitor

management system

- Conducted preemptive quarantine and diagnostic tests in case of

suspected infection and joined forces with health authorities to

conduct prompt epidemiological investigations and quarantine

activities in response to a confirmed case

- Set thermal imaging cameras at entrances and dining halls and

CCTVs on shuttle buses

Industrial Health and Safety

Guided by its vision of “Progress for Humanity”, Hyundai puts top priority on safety in its business activities, aimed at realizing

its health and safety management policy of “providing a safe and healthy work environment to ensure the lasting value of life”.

To this end, we are doing our utmost to establish a safety culture and prevent serious industrial accidents by taking all necessary

health and safety measures preemptively, while each of our business sites operates a situation room to respond to the COVID-19

situation. In order not only to respond to COVID-19 but also to build a safer working environment, we upgraded aging facilities

and protective devices in the safety, firefighting, environment and health sectors, with an annual budget increase of 573%

compared to the previous year. We are also strengthening our health and safety management system through the management’s

reinforced safety leadership, while also upgrading on-site safety management system by conducting comprehensive safety

inspections in the first and second half of each year.

Strengthening Safety Leadership

Safety and Health Management System

In January 2022, Hyundai launched a general governance system for safety

management by appointing a Chief Safety Officer (CSO, Vice President Dong

Seock Lee). With the appointment of the CSO, it put the safety management

organization under the direct control of the CEO while expanding the

company’s safety-related budget.

With the safety managers of our business units, we set safety and health

priorities and action plans on the basis of regular discussions about health-

related issues and risks between the employees and managers of different

business units. Hyundai evaluates progress toward safety and health goals

in meetings between the industrial health and safety department staff and

the c

ompany’s management and BOD at least once a quarter. In addition, we

have established inspection and investigation procedures by industrial safety

and health experts about work-related injuries, diseases, and accidents while

establishing a company-wide safety and health management system.

In order

to establish an effective safety and health system, we conduct

performance

evaluations against industrial safety and health goals for those with safety-

related responsibilities such as line managers, as well as the top executives.

Preventing Serious Workplace Accidents

Hyundai strives to prevent serious industrial accidents by analyzing

major types of work with a high risk of serious accidents and establishing

appropriate safety management countermeasures and systems. During the

past decade, jamming and vehicle crashes were the most frequent types

of serious accidents at the company’s domestic manufacturing plants,

while irregular construction work on holidays had a higher rate of serious

accidents than ordinary work on weekdays. In response, as a way to secure

facility safety, Hyundai conducts regular mobile safety inspections based on

NFC technology, manages its risks continuously, and manages risk factors

thoroughly via the CCTVs installed in all its safety blind spots. We also have

installed human body detection sensors and alarms to ensure pedestrian

safety, thereby reducing the risk of accident due to workers’ carelessness

when operating vehicle-based loading and unloading machines such as

forklifts. In addition, we have developed and applied safety management

regulations for each stage from design to construction, bolstering the

management of irregular construction work carried out during holidays.

Preventing Serious Accidents at Suppliers

In order to help our suppliers to improve their level of safety management,

we support their safety training and run a reward system for suppliers with

outstanding safety records in holiday work. To make sure of its suppliers’

appropriate safety management, Hyundai has developed a supplier safety

management system which enables it to assess potential suppliers’ accident

prevention capabilities in advance and select qualified suppliers in the

first place. Hyundai has declared its commitment to safety management.

Its management conducts on-site inspections on processes with risks of

serious accidents. It continuously strives to prevent serious accidents by its

suppliers. In 2022, it is planning to dispatch experts in safety diagnosis to

its suppliers with records of serious accidents to share best practices of risk

management with them.

Management of Leading Indicators for Industrial Accidents

In order to reduce the total number of accidents, Hyundai has introduced

H-LWC (Hyundai-Lost Workday Case), a leading indicator for safety

management, rather than the existing accident rate-centered indicators. As

a result, it reduced the total number of accidents by 9% in 2021 compared

to 2019. In addition, as H-LWC data can be used as analytical data to predict

the occurrence of occupational accidents based on accumulated accident

data, we have conducted a comprehensive analysis of the three major types

of accidents (collision/falls/jamming) that occur at our workplaces and taken

customized countermeasures, thereby reducing not only the total number of

accidents but also the risks of serious accidents.

Ratio of Workplaces Certified for Occupational Health and Safety Systems (ISO 45001, etc.)

2019

99%

2020

100%

2021

100%

Goal for 2022

100%

Assessment of the Safety and Health Management Level

Hyundai developed the H-SAT (Hyundai Safety Assessment Tool) in 2019,

aimed at improving the level of health and safety management at all its

domestic business sites, and since then it has been conducting health

and safety assessment at all its domestic business sites. In terms of

evaluation items, we have made the system more effective by continuously

revising it to reflect new regulations in the safety, health, firefighting and

environmental sectors, being strengthened every year, as well as the new

obligations according to international trends. By aligning the evaluation

results with the KPIs of our domestic business sites and structuring them

to enhance the operability of on-site safety management, Hyundai has

enhanced the safety leadership of our management and the effectiveness of

on-site accident prevention efforts. In 2022, in order to encourage accident

preventing activities for safer workplace to be activated, we will redirect the

safety management evaluation system and KPIs management guides such

as “intensification of disaster reduction targets by more than 5% year-on-

year,” “realization of new shutdown accident indicators,” and “evaluation of

leaders’ safety and health responsibilities”.

Composition of H-SAT

Areas

Management System

Assessments

On-Site

Workplace Inspections

Safety

Safety meetings by

management, etc.

Robot protection

devices, etc.

Health

Management of

musculoskeletal

diseases, etc.

Ventilation

facilities, etc.

Firefighting

Emergency response

systems, etc.

Fire-prone areas, etc.

Environment

Environmental facilities

licensing, etc.

Air pollution prevention

facilities, etc.

Comprehensive Emergency Response Drills

In order to maintain the ability to respond quickly in the event of an

emergency, Hyundai conducts comprehensive emergency response drills

semi-annually in each plant whose employees are obligated to participate in

the drills. In 2021, we strived to minimize human and material damage due

to COVID-19 by maintaining our employees’ ability to respond to emergency

through non-face-to-face training and information sharing. In 2022, with the

COVID-19 regulations being eased, we will resume regular comprehensive

emergency response drills so that our employees can perform their duties

promptly in the event of emergency such as fire, explosion, earthquake,

or environmental accidents, while also establishing training evaluation

standards to continuously improve the level of its training programs and

secure the effectiveness of drills.

Workplace Safety and Health Performance

ESG Magazine

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3. Social

4. Governance

5. ESG Factbook

1. Introduction

Hyundai Motor Company Occupational Health & Safety Policy

Spreading the Culture of Health & Safety

Appling Safe Design Standards

Hyundai has established on-site safe design standards to induce employees

to engage in safe behaviors while seeking to apply them gradually. In the

second half of 2020, the company piloted safe design standards for on-

site passageways, leading to effectiveness in reducing accidents thanks to

their improved visibility. Since 2021, we have applied the standards to other

factory improvements in addition to their application to loading docks. The

company is planning to establish and apply standards for entry prohibition

signs to high-risk areas such as automated guided vehicles (AGVs) and

for material handling lift tables. We will make it mandatory to apply the

safe design standards to new plants, which is expected to help reduce

occupational accidents at those locations.

COVID-19 Response

Hyundai has operated the COVID-19 Situation Room 24/7 since the early

days of the pandemic, making every effort to prevent the risk of infection at

its domestic and international business sites. The Situation Room has been

monitoring the status of confirmed cases in the company’s workplaces

and has taken emergency quarantine measures such as testing, isolation

of contacts, and identification of symptomatic persons. In addition, we

are doing our utmost to create a healthy environment throughout our

workplaces by checking for fever on a one-to-one basis for both employees

and visitors, implementing daily quarantine measures including the use of

hand sanitizers and thermometers as well as operating thermal imaging

cameras at its workplaces. Hyundai has also followed the government’s

quarantine guidelines, such as social distancing and remote working, taking

business environment into consideration.

Preventing Musculoskeletal Disorders with New Technologies

Hyundai is piloting a wearable device that can prevent musculoskeletal

disorders in field workers. CEX, a chair-type wearable robot, assists knee

joints to help employees maintain a sitting posture, whereas VEX, a

wearable robot in the form of a suit, is equipped with a multi-link muscle

compensation device to prevent musculoskeletal disorders in employees

who work long periods of time looking up and lifting their arms. Since the

fourth quarter of 2020, we had field-tested 10 of wearable devices with

104 people working at 36 processes in seven domestic plants. Based on

the test results, we identified such issues as the need to reflect physical

diversity and lower the operational difficulty and weight of equipment. In

2021, we conducted additional tests and collaborated with Hyundai Rotem

to address the technical issues involved in wearable devices and now we

are accelerating the commercialization. Hyundai will continue

conducting

analyses of various types of equipment and data and make active investments

and improvements to prevent worker’s musculoskeletal disorders.

Safety and Health Activities by Business Site

Safety and Health Activities

To prevent serious accidents, Hyundai’s domestic plants conduct site-

oriented safety inspections and safety training. Notably, it strengthened

safety supervision on construction during holidays where accidents

occurred frequently and attained accident-free construction during holidays

in 2021 while carrying out a total of 3,646 installation projects during the

year. To prevent fire risks involved with the mass production of eco-friendly

vehicles, we conducted related fire safety inspections in the second half

of 2021. We identified 101 areas of improvement by inspecting not only

production plants, but also research institutes, maintenance shops, and eco-

friendly vehicle facilities, which was followed by the categorization into three

groups – management improvement, physical improvement, and process

improvement. Going forward, we will make sequential improvements

according to the mass production stage involved.

Meanwhile, we have continued training related to occupational health and

safety. Despite difficulties due to COVID-19, we conducted online education

for supervisors and special safety training for all employees with specially

produced training videos on the prevention of serious accidents. In 2021,

Hyundai also developed a non-face-to-face mobile safety education

system that can be actively used in a pandemic situation. In 2022, we are

planning to pilot VR training content and VR Experience Center to raise

awareness of occupational accidents in the most vivid way. Meanwhile,

Hyundai has continued to promote a smoke-free clean factory campaign

launched in 2016, including the installation of smoking booths and smoking

bells inside plants, the operation of in-house smoking cessation clinics

and external non-smoking camps, guidance in smoking areas, and the

promotion of smoke-free clean factories. We also conduct inspections of

work environment at all our workplaces twice a year to identify any harmful

factors such as noise and hazardous chemicals in a bid to monitor and

constantly improve our work environment.

Safety and Health Training (Advanced Safety Training Curriculum)

Hyundai produced an “Advanced Safety Training Curriculum” so that all its

employees can easily take safety and health training courses through an

online platform. The online video training consists of 36 courses (6 intensive

and 30 microlearning courses) dealing with safety rules, occupational

accidents and serious accidents, among others. We have also produced VR

safety education contents and built experiential training facilities so that our

employees can gain more knowledge and experience about safety.

Safety and Health Training

Classification

Target

Training

Hours

Mandatory

safety

training

New hire training

New hires (some

1,200 persons/year)

8 hours

and more

Special training

Those subject to

special training

(39 types)

16 hours

and more

Regular

training

All

employees

On-site employees

(some 28,000 persons)

6 hours

and more

per quarter

Supervisors

On-site supervisors

(some 1,300 persons)

16 hours

and more

per year

Training on

operational changes

Workers other than

daily workers whose

duty is changed

2 hours

and more

Competency/

specialized

training

Specialized training

Productive

maintenance/

logistics staff, senior

staff, etc.

(some 3,350 persons)

About

8 hours a

day

Competency-based

training

Safety managers,

safety promoters,

etc.

(some 400 persons)

Up to

2 nights

and 3 days

Psychological

safety

counseling

Psychological

counseling and

training

Employees,

employee families,

suppliers, etc.

(some 1,470 persons)

About

1 hour each

* Based on Ulsan Plantc

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Ulsan Plant

The Ulsan Plant has conducted competency/specialized training beyond

legal requirements in addition to psychological safety counseling. It

provides specialized 8-hour-a-day training in five areas such as productive

maintenance and traffic safety to approximately 3,350 employees in the

productive maintenance and logistics departments in addition to five job

competency training courses including essence/advanced training for about

400 people including safety managers and safety promoters.

Asan Plant

In September 2021, the Asan Plant signed an MOU with 30 suppliers,

the Cheonan branch of the Ministry of Employment and Labor, and the

Chungnam Headquarters of the Korea Occupational Safety and Health

Agency to create an industrial accident-free automobile parts manufacturing

industry. In order to eradicate industrial accidents, the Asan Plant provided

safety diagnosis consulting services for its suppliers and held a seminar

on preventing industrial accidents in the parts manufacturing industry in

December 2021 and shared the results of its safety inspections.

Jeonju Plant

In the first half of 2021, the Jeonju Plant conducted a special safety

inspection in preparation for the thawing period. It identified on-site risk

factors such as cracks in external walls or oil barriers during the thawing

period while taking improvement measures such as cleaning drains and

repairing road asphalt immediately.

Investigation procedures and step-by-step actions in case of a safety accident

Step

Secure a Statement

Process Confirmation

Photo Shoot

Cause Analysis

Take Measures

Action

Securing the statement of

the first eyewitness

Check the process and

listen to the cause of the

accident

Entire process and accident

reenactment photography

Root cause analysis of

accidents

Apply the most appropriate

countermeasure after

establishing several

countermeasures

* Behavioral instructions for an accident investigation: In the event of an accident, follow the steps above and do not omit a step or rush through the steps

Prevent missing information by conducting an accident investigation that is based on the “5 Ws and 1 H”, and start from large causes and then move onto small causes

(top down approach)

Human Rights Management

Hyundai supports and complies with international human rights and labor standards and guidelines, such as the Universal

Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, the Core Conventions of the

International Labor Organization, and the OECD Due Diligence Guidance. It fulfills its social responsibilities through human

rights management across its business while communicating and striving for human rights not only for its employees, but

also for its stakeholders such as business partners and customers. Based on these efforts, we have enacted the Human Rights

Charter and disclose our human rights risk assessment and human rights management implementation status in a bid to

protect and promote the human rights of our employees and stakeholders.

Introduction of Human Rights Management

Human Rights Charter

Hyundai amended its Human Rights Charter in June 2021 to actively

implement human rights management by preventing human rights

violations and mitigating related risks in its business operations. The

amended version contains Hyundai’s commitments to preventing forced

labor or child labor, respecting freedom of association and collective

bargaining rights, and prohibiting discrimination. The Charter applies to all

employees (including part-time workers) of Hyundai at all our domestic

and overseas manufacturing plants and sales companies, subsidiaries

and sub-subsidiaries, and joint ventures. Hyundai employees follow the

Charter when dealing with suppliers and sales/service organizations while

all its stakeholders in business relationships are encouraged to respect the

Charter as well.

Hyundai strictly prohibits discrimination and workplace harassment under

Articles 1 and 2 of its Human Rights Charter, and responds to confirmed

violations according to the principle of zero tolerance. In addition, we

conduct diversity education for all employees assigned to overseas posts

and include it in basic training for team leaders and onboarding courses

for those appointed as heads of overseas subsidiaries. We also run various

training programs designed to raise our employees’ awareness of diversity,

such as cross-cultural seminars and team dynamics workshops.

Policy on Prohibition of Discrimination and Harassment

In June 2022, Hyundai enacted the Hyundai Motor Company Policy on

Prohibition of Discrimination and Harassment to prevent discrimination and

harassment while conducting business and ensure that all its employees

receive equal treatment without discrimination at all times.

Management Principles for Discrimination and Harassment Risk

(Reporting) Hyundai has established a reporting channel available 24/7 to

eliminate discrimination and harassment and ensures the whistleblower

confidentiality all the way from reporting to investigation and disciplinary actions.

(Training and diffusion) Hyundai aims to establish an organizational culture

based on mutual respect and dignity by providing its employees with

education on discrimination and harassment. Through the education, the

company promotes a culture of mutual respect among employees and

enables them to follow established procedures to deal with any occurrence

of a violation.

(Principle of zero tolerance) Hyundai addresses acts of discrimination or

harassment with the principle of zero tolerance lest any such incident reoccurs.

(Corrective and disciplinary action) Hyundai takes appropriate corrective

and disciplinary actions for any kind of discrimination, harassment, or other

unlawful infringement in its workplaces, depending on the severity of the

situation involved.

Measures to Mitigate Discrimination and Harassment Risk

Hyundai manages risks of discrimination and harassment through its

management processes. It conducts incident investigations received

through its reporting channels, while constantly ensuring that no

discrimination or harassment incidents occur.

Promoting Human Rights

In order to expand human rights management to all stakeholders

including employees, Hyundai is diversifying its human rights curricula

and accelerating the expansion of the cause. To promote employee

understanding and awareness of human rights, we conduct human rights

management training in addition to the sexual harassment prevention

education that is mandatory by law. Through the training, we reveal our

human rights management directions and action plans while encouraging our

employees to report risks of human rights violations found in their workplaces.

We share information on our Human Rights Charter and action plans,

human rights risk assessment procedures and results, etc. not only within

the company, but also with our suppliers, sales and service organizations,

and other business partners. Our Human Charter is available at our corporate

website for everyone, and our employees can access to the company’s human

rights policies and other related information through the intranet (HR Lounge).

Discrimination and Harassment Management Processes

Receiving report

On/offline reporting channel

Investigating

HR division at each business site

(When confirmed) Disciplinary actions, etc.

HR-related committee

Hyundai Motor Company Human Rights Charter

Non-Discrimination & Anti-Harassment Policy

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Results of Human Rights Risk Assessment

Unit

2021

Hyundai

business sites

Ratio of business sites where

human rights impact assessment

was conducted

90.4%

Ratio of business sites with risks

8.3%

Ratio of mitigation/improvement

measures taken

100%

Tier-1 suppliers

Ratio of business sites where human rights

impact assessment was conducted

20%

Ratio of business sites with risks

Ratio of mitigation/improvement

measures taken

100%

Human Rights Management System

Selecting Human Rights Risk Assessment Targets

Human Rights Risk Assessment Targets

Hyundai has selected its employees as well as its suppliers and joint

ventures as targets of human rights risk assessment, developed indexes and

conducted diagnosis about its major human rights violation risks during

business activities.

Human Rights Risk Management Process

Human Rights Risk Assessment Results and Improvement

Measures

Hyundai will pay attention to areas identified through the risk assessment as

“potential risk” and will strive to improve them. As part of the efforts, having

recognized that there was a lack of awareness-raising activities related to

human rights among its employees, Hyundai has taken various improvement

measures. They include the dissemination of the Human Rights Charter

among its employees through the intranet and the issue of English-language

pay stubs to non-Korean staff so they can understand them clearly.

We have also conducted online ESG education (Korean/English) for

employees at domestic business sites to raise their awareness of ESG and

increase their understanding of the definition and importance of human

rights management, as well as the Human Rights Charter.

Preliminary Diagnostics of Human Rights Risk and Major Risks Identified

Major Efforts to Mitigate Human Rights Risks

ESG

education

Activity: Developing ESG education programs for employees

Key contents

‒ Education about major ESG topics (environment/safety/

ethics/human rights)

‒ Education offered to 22,000 staff in general/research/

legal positions, etc. (completion rate: 90.1%)

English pay

stubs

Activity: Providing pay stubs in English to foreign nationals

Key contents

‒ English description of wages, allowances, etc.

‒ English version of the payroll inquiry system

Amendment

& distribution

of the Human

Rights Charter

Activity: Upgrading the Charter to the global standards

Key contents

‒ Amendment of the Charter in June 2021

‒ Headway in human rights risk diagnosis and management

systems

Online Human Rights Violation Prevention Course

Watching ESG mindset

videos (online training/

in-house broadcasting)

Creating and distributing

follow-up newsletter

Online 24/7 learning system

(Registration with the Hyundai

Online Platform)

Work environments (including emotional labor,

discrimination, freedom of association, etc.)

Low Risks

Potential Risks

Work conditions (including hours, pay, and

child and forced labor, etc.)

Low Risks

Potential Risks

Health and safety (including workplace safety

facilities, wearing safety equipment, etc.)

Low Risks

Potential Risks

Business impacts (environmental and social

impacts on places near businesses)

Low Risks

Potential Risks

Conflict minerals (concerns about raw

materials when procuring raw materials)

Low Risks

Potential Risks

Employees

Women

Children

Immigrant and

Contract Workers

Suppliers

Local ommunities

Human Rights Issues

Targets of Human Rights Risk Assessments

Human Rights Risk Assessment (Diagnosis and Due Diligence)

In order to proactively identify and prevent negative human rights impacts,

Hyundai operates a human rights risk assessment process for its employees

and suppliers. According to the process, we diagnose in advance of possible

risk factors in our business operations, supply chain activities, and new business

relationships (joint ventures). Through the preliminary diagnosis, forced labor,

child labor, freedom of association, qualification for collective bargaining, and

discrimination were recognized as major risk factors, and employees, women,

children, indigenous people, migrant workers, and local communities were

selected as the subjects to the human rights risk assessment.

We also conducted human rights risk assessments at our overseas business

sites in North America, Latin America, Europe, India, and China in addition

to business sites in Korea. As a result, some potential risks, such as lack of

awareness of the Human Rights Charter at two of 16 overseas branches, were

identified. In response, we are planning to distribute the Group Human Rights

Charter to overseas business sites to help employees increase the importance

and understanding of employee human right protection.

Going forward, we will make continuous efforts to advance risk management

processes, such as discovering potential human rights risks, expanding human

rights risk assessment targets, elaborating diagnosis process of human rights

risks and due diligence, thereby preventing negative human rights impact

occurring among our employees and supply chains.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Online Human Rights Violation Prevention Course

Composed of a total of five episodes, the online course includes the

materiality and trends of ESG and key ESG agenda by module – ethics, human

rights, safety, and environment. To make the content easier to understand, it

contains plenty of infographics, expert interviews, and case studies.

Improving

human rights risk

management

processes

Establishing and

declaring

the Human Rights

Charter

Management System

Disclosing

human rights

management

status

Providing

support for

human rights risk

improvement

Conducting

review/

assessment of

human rights risks

Risk Management

Foundation of Korea Automotive Parts Industry Promotion

In 2002, Hyundai partnered with Kia and Hyundai MOBIS and launched the

Foundation of Korea Automotive Parts Industry Promotion to strengthen

its suppliers’ capabilities. Hyundai has invested about KRW 6 billion a year

in the Foundation, contributing to the overall improvement of its suppliers'

quality, technology, and management. It has also dispatched the Quality and

Technology Volunteer Group and the Supplier Assistance Group specialized

in quality/technology/management consulting to enable its suppliers to

improve their parts quality, technology, and management capabilities.

Supporting Joint Entry into Overseas Markets

Through the expansion of its overseas production, Hyundai contributes to

increasing exports not only by its tier-1 suppliers with which it has direct

relationships but also by tier-2 and tier-3 suppliers. We continue to seek win-

win growth with suppliers overseas as well through various programs so

that our global expansion can lead to more opportunities for them. We have

entered the overseas markets together with a total of 749 suppliers (349

tier-1 suppliers and 400 tier-2 suppliers). In addition, our quality assurance

provided supplies with opportunities to expand orders they receive from

other car manufacturers. Hyundai has also enabled talents from suppliers to

work overseas.

Win-win Growth

For Hyundai to secure quality competitiveness and differentiated value, it is essential for its suppliers to have improved parts

technology. We have therefore established a win-win growth system to help our suppliers to achieve stable and sustainable

growth. In 2021, we continued to take various measures for win-win growth, such as running the Quality and Technology

School, operating financial support programs, and offering education on cutting-edge technologies. Going forward, Hyundai

will lead the way in promoting win-win growth with its suppliers and lay a foundation to stand tall in the global market.

Suppliers

Supporting Win-win Growth and Management Stability

Expanding a Culture of Win-win Growth

Fair-Trade Agreement

As part of its efforts to create a culture of win-win growth, Hyundai enters

into a “fair trade agreement” with its suppliers every year. Since signing the

first agreement in 2008, we have concluded the 13th agreement with our

suppliers in 2021 on various issues such as adjustments according to the

rise in raw material prices, funding programs, four major measures about

subcontracting, and strengthening support for tier-2 and tier-3 suppliers.

Transparent Purchase Practices Center

Providing suppliers with guidelines on ethical conduct is important for

Hyundai and its suppliers to establish a fair and transparent win-win

partnership. To this end, Hyundai operates the Transparent Purchase

Practices Center on the Hyundai Motor Group’s win-win growth website

while operating a suggestion box for transparency and ethical practices

so that its suppliers can voice their difficulties and propose various system

improvements. We operate a suggestion box for tier-2 and tier-3 suppliers

as a way to establish fair trade practices and strengthen transparency

throughout supply chain.

Awarding Suppliers’ Win-win Growth Efforts

Hyundai has been striving to promote the culture of win-win growth by

examining and rewarding its suppliers’ win-win growth performance since

2009 in the areas of payment terms and durable quality between tier-1 and

tier-2 suppliers. In 2021, we held the “R&D Supplier Tech Day” to reward

outstanding R&D suppliers as prominent partners in win-win growth.

Supporting Suppliers’ Capacity Building

Hyundai pursues win-win growth with its suppliers through various

supplier competency enhancement programs. To ramp up its suppliers’

competitiveness, we help them build smart factories. We also offer

consulting and facility investment support, enabling them to digitize process

data; reduce lead times, defect rates and disposal costs; and increase timely

delivery and sales revenues.

In the area of the support for smart factory construction, Hyundai Motor

Group contributed a total of KRW 24 billion from August 2015 to 2021 for

high-tech intelligent factories that connect all processes from product

planning to sales with ICT for approximately 1,100 SME suppliers. Hyundai

also supports supplier participation in domestic and foreign auto parts

exhibitions while matching them with overseas buyers through its supplier

export marketing support program. In Korea, we support the cost of renting

booths and consulting rooms at the Korea Automotive Industry Exhibitions

as well as arranging one-to-one matching sessions. For overseas exhibitions,

we pay all supplier expenses such as airfare and accommodation as well as

registration fees.

The Supplier Recruitment Fair, which started in 2012, has supported suppliers

having difficulties in securing talent while contributing to relieving the youth

unemployment problem. The 2021 fair was participated by 287 suppliers

including tier-2 and tier-3 suppliers. In addition, Hyundai helps its suppliers

minimize their manpower shortage by operating an online recruitment

support system dedicated to them year-round.

Financial Support for Business Stability

Together with Kia, Hyundai pays its suppliers early to relieve financial

difficulties on Lunar New Year and Korean Thanksgiving. To encourage

its suppliers to pay tier-2 and tier-3 suppliers early, Hyundai reflects their

performance in the evaluation of suppliers. In addition, we help suppliers

strengthen their foundation for business stability through various financial

support programs such as Win-Win Growth Cooperation Loan, Future

Growth Mutual Fund, Future Growth Win-Win Fund, Win-win Mold

Equipment Fund, and Dedicated Loan for Tier-2 and Tier-3 Suppliers. Notably,

Hyundai has operated a new financial support program for its suppliers

since 2020 by raising funds at the Group level for low-credit SME supplies

suffering from the COVID-19 crisis. Also, we help suppliers relieve the burden

of rising raw material prices such as steel plates, aluminum, and precious

metals by reflecting the price fluctuations in the payment to the suppliers so

that they can continue to supply high-quality parts.

Funding programs

Size (KRW billion)

Deposit (KRW billion)

Win-Win Growth Cooperation Loan

(to overcome COVID-19 crisis)

238.0

68.0

Future Growth Mutual Fund

93.5

37.4

Future Growth Win-Win Fund

150.0

100.0

Win-win Mold Equipment Fund

75.0

50.0

Dedicated Loan for

Tier-2 and Tier-3 Suppliers

72.3

US: 48

Europe: 50

Mexico: 43

Turkey: 12

Brazil: 12

China: 489

Russia: 11

India: 83

Vietnam: 1

Joint Entry into Overseas Markets with Suppliers

• Advisable conclusion of contracts

• New supplier registration and

management

• Operations of the Internal Subcontract

Deliberation Committee

• Advisable document issuance and

preservation

Four Major Criteria for

Subcontracts

Transparent and

Ethical Practice Suggestion Box

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

• Operating a channel through

which anyone can anonymously

propose system improvements or

report violations of the principles

of transparency and ethics on the

website of the Transparent Purchase

Practice Center

Nurturing Suppliers’ Competitiveness and

Reinforcing Training for Suppliers through the GPC

We opened the Global Partnership Center (GPC) in June 2020 to establish

a virtuous cycle in which Hyundai Motor Group and our suppliers can grow

together by helping them enhance their competencies and competitiveness

in the world’s automotive industry. In addition to providing training programs

targeting tier-1 and tier-2 suppliers, the Center provides training facilities and

instructors to suppliers in need of their own training.

Training Support for Suppliers (2021)

Classification

No. of participants in 2021

Remarks

Foundation of Korea

Automotive Parts Industry

Promotion

Quality and Technology School

2,604

22 customized training courses

General training, etc.

7,033

General training, on-site training, etc.

Global Partnership Center

Training by industry, etc.

59,837

454 courses

Total

69,474

* Training programs targeting all suppliers to foster their competitiveness

Improving Quality/Technology of Tier-2 and Tier-3 Suppliers

Improving the quality and technology levels of tier-2 and tier-3 suppliers, who

supply auto components to tier-1 suppliers is also a key factor in improving

the quality of finished vehicles. To help improve their quality, technology

and productivity as a way to enhance their global competitiveness, Hyundai

dispatches its experts and transfers its expertise and know-how free of charge.

Technical Training (Quality and Technology)

Composition

Technical experts in various production areas

Duration &

Frequency

Annually from 3 to 12 months, providing guidance on

shortcoming related to manufacturing technologies free

of charge

Areas

Cutting and processing, presses, heat treatments, welding,

metal plating, forging, aluminum casting, PL injection,

rubber, painting, electrical & electronics, IT, safety

Management Consulting (Supplier Support Group)

Composition

Professionals with experience in the automobile industry

as senior executives

Duration &

Frequency

Annually from 3 to 12 months, providing consultation

regarding overall management free of charge

Areas

R&D, production, production technology, quality, logistics,

cost, management support

Building Long-term Cooperation System

Win-win growth with suppliers is the source of competitiveness for finished

vehicles. Hyundai therefore pursues win-win growth with tier-1 suppliers that

supplies parts to it directly, tier-2 suppliers that supply parts to tier-1 suppliers,

and general suppliers that deliver general products. The Win-Win Cooperation

& Safety Promotion Team takes the lead in promoting win-win cooperation

with the company’s suppliers.

Hyundai is contributing to enhancing the competitiveness of the domestic

auto parts industry by supporting its suppliers in the areas of finance, training,

and welfare. Through a long-term cooperation system, we actively support

them not only in production technologies but also in R&D efforts.

Average

trading

periods

Average trading periods with Hyundai/Kia: 34 years

(the average lifespan of small and medium-sized Korean

manufacturers: 12.3 years)

Growth in

corporate

size

Sales volume increased by 4.4 times. (2001-2021)

Joint entries

into overseas

markets

749 suppliers have entered overseas markets with

Hyundai

Targets of analysis: Tier-1 parts suppliers (excluding affiliates and non-parts suppliers

with less than 10% of dependence)

GPC Education Goals

To increase suppliers' skills

through training and seminars

Mission

Basic

philosophy

Building a virtuous cycle in which Hyundai Motor Group and its suppliers can grow together by improving their skills and enhancing their competitiveness

Directions

Tasks in the

works

Education

Seminar

Infrastructure

Mid/Long-term

Roadmap

Establishing training programs with a focus on

supplier training centers and integrating seminar venues

Enhancing capabilities through supplier training programs

and strengthening the effects of seminars

Subject

Activities

Tier 1 and 2 parts suppliers

Fulfilling social responsibilities by assisting SMEs and local communities

Targets

Future goals

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Strengthening Networks

The Center offers 18 tracks and some 450 training programs in five

categories – future competitiveness, leadership, basic job training, global

competency, and industry expert training – for its tier-1 and tier-2 suppliers.

5-Star System for Win-win Cooperation

Hyundai launched the 5-Star Win-win Cooperation System in 2019 to

promote compliance with fair trade and strengthen win-win cooperation in

transactions between tier-1 and tier-2 suppliers. This system evaluates the

efforts of tier-1 suppliers for win-win cooperation with tier-2 suppliers once a

year and assigns grades to them, with the evaluation results reflected in the

evaluation of their new car bids. Outstanding suppliers are rewarded with

win-win cooperation awards.

5-star System (Quality/Technology/Delivery)

Hyundai runs a five-star system to quantitatively evaluate suppliers’ quality,

technology, and delivery level, helping to ramp up their competitiveness.

We also disclose evaluation results to offer incentives to outstanding

suppliers and reinforce their motivation for improvement. The system not

only improves the quality and technical competitiveness of Hyundai and its

suppliers but also reduces their quality control costs while helping suppliers

secure independent export capabilities.

R&D Technical Support

R&D technical support is a key win-win growth program whereby Hyundai

shares its R&D know-how with its suppliers and helps them to meet

their technological needs. The system enables the suppliers to lay the

groundwork for the production of high-quality products by improving their

R&D capabilities and empowering them to make technological upgrades

on their own. In addition, we seek to improve supplies’ approach to quality

through training on past cases and function/design concepts while

collecting and reflecting their improvement ideas during technical support

process as part of our constant efforts to enhance communication and

cooperation with them.

Guest Engineer Program

Hyundai operates a guest engineer program in which supplier engineers

stay in its research center to participate in parts design and performance

development for a certain period of time while it develops new vehicles.

In 2021, a total of 31 suppliers dispatched an average of 440 engineers per

month to Hyundai. Guest engineers learn about our product development

know-how in the process of R&D collaboration for the design of new car

parts and performance development. When they return to their companies,

they play a key role in improving the company’s technological prowess and

increasing their development efficiency.

Building Smart Factories

A smart factory is an intelligent factory that integrates the entire production

process of products with information and communications technology (ICT)

to produce customized products that is cost effective and takes less time. To

help suppliers build smart factories, Hyundai supports them in such areas as

initial, intermediate, and final product inspection system; a lot tracking and

management system; an error-proof system for their parts manufacturing

plants; and digitizing their manufacturing processes.

Evaluation items

Quality 5-Star

• Quality management system

• Defect rate

• Claim reimbursement ratio

• Quality management performance

Technology

5-Star

• Basic competencies: people,

investment

• Performance capability: parts

development system (planning/

design/evaluation)

• Capabilities for the future: new tech

development, patent performance

납입 5스타

Delivery 5-Star

• Production line stoppage:

the number of cases, time,

reimbursement amount,

reimbursement ratio

• A/S parts delivery rate

• CKD parts delivery rate

Win-Win Cooperation 5-Star Evaluation Process

Tier-1 suppliers’ win-win

performance

(Quantitative evaluation: 50%)

Tier-2 suppliers’ subjective

evaluation about win-win efforts

(Qualitative evaluation: 50%)

Strengthening win-win cooperation between tier-1 and

tier-2 suppliers and fostering win-win growth

Evaluation items

• Payment terms

(cash payment ratio,

payment period, etc.)

• Contractual fairness

(the use of a standard

subcontract, etc.)

• Win-win support

(financial support, R&D/

productivity support, etc.)

Survey items

• Transaction relationship

(fair trade, transaction

conditions)

• Cooperation relationship

(funding, R&D, production

support, etc.)

• Operational systems

(vison sharing,

implementation system, etc.)

Evaluating tier-1 supplies’ win-win efforts for tier-2 suppliers

(once a year) and reflect the results in their bidding

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

We supported 450 companies from 2015 to 2018 to help them build

smart factories. Since 2019, we have contributed KRW 5 billion every

year to support about 650 companies. For the past three years, we have

upgraded the program by increasing the amount of support from KRW

20 million to a maximum of KRW 100 million for each company. In 2022,

we will continue to support suppliers through a separate assistance plan.

Going forward, Hyundai will continue to offer its suppliers consulting

services and facility investment to reduce inefficiencies in the production

process, such as lead time and defect rate, while digitizing its process

data to increase sales as a result.

Sharing Technology Patents

Technology sharing with suppliers is essential for Hyundai’s product

technology improvement and commercialization. Accordingly, Hyundai

operates a free patent provision program to provide or transfer its patents

to the suppliers free of charge as required by the suppliers. Patent rights

are provided free of charge as follows: Hyundai shares the list of patent

rights with its suppliers monthly, suppliers make application for patent

rights transfer, and Hyundai offers them patent rights following reviews

based on its on-site investigations and consultations. In particular, supplier

applications of the transferred patent rights are shared at New Technology

Exhibitions participated by Hyundai’s R&D cooperation suppliers. We

also contribute to improving suppliers’ technological competitiveness by

promoting the commercialization of the technologies transferred by Hyundai

at free of charge and strengthening the win-win cooperation system.

Supply Chain ESG

Hyundai’s supply chain management strategy prioritizes its supplier’s quality, technologies, supply stability, compliance

programs, and eco-friendly production systems. Based on the strategy, we evaluate and manage ESG risks that may occur in

our supply chain, while offering suppliers training and other support to prevent risks in advance, aimed at building a sustainable

supply chain. We operate an ESG evaluation process for suppliers to diagnose and resolve risks related to ethics, environment,

labor, human rights, safety, and health that may arise in the process of procuring auto parts and raw and subsidiary materials

while asking high-risk suppliers to establish improvement plans and take improvement measures. We also help suppliers

strengthen their ESG capabilities so that they may secure sustainable competitiveness on the global stage. Supply chain ESG

management status and related performance were reflected in the KPI of the executives in charge, and reported to the C-level

leaders and Sustainability Management Committee (under the Board of Directors).

Promoting Supply Chain ESG

Supplier Code of Conduct

Hyundai presents the “Supplier Code of Conduct” as ESG standards that

all its suppliers must comply with. The Code includes the purpose of the

code, the target of application, and supplier responsibilities and roles, while

presenting compliance standards in major areas of ESG such as ethics,

environment, labor, human rights, safety, health, and management systems.

By complying with the provisions of the Code for business decision-making

and business operations, Hyundai suppliers are expected to establish a

stable business relationship with it and grow into a company that is widely

respected, thereby strengthening sustainability.

Current Status of Hyundai Suppliers

Hyundai is trading parts with about 1,860 tier-1 suppliers worldwide, who

produce parts for Hyundai not only in regions where the company runs its

plants (Korea, USA, China, Europe, India, Latin America, Southeast Asia, etc.)

but also in other regions. We manage the following as key suppliers – those

that supply core technology parts (hydrogen fuel cell parts, battery parts,

control parts, etc.) or require intensive management due to their superior

technological prowess or the special characters of their parts (replaceability,

etc.). As of 2021, 62 tier-1 companies and 20 tier-2 companies fall under this

category. We include these suppliers in the priority group in terms of supply

chain ESG as well.

Status of Supply Chain

Classification

Detailed

Classification

Number of

Companies

Percentage of

purchases

Tier 1 suppliers

Parts suppliers

1,860

100

‒ Domestic

380

‒ Overseas

1,480

Core suppliers

Tier 2 suppliers

Core suppliers

Raising supplier

awareness

Hyundai implements responsible minerals management policies, and urges its suppliers to comply with them. To this end we offer briefings/trainings

to introduce responsible minerals procurement policies and raise awareness of suppliers. The Global Win-Win Cooperation Center is operating regular

training courses for suppliers about our minerals management for suppliers according to the annual conflict minerals management plan, regulatory

trends about conflict minerals, the introduction of RMI standard forms and the investigation plan, and the need to expand transactions with RMAP-

certified smelters in a bid to raise awareness of the conflict minerals management.

Checking suppliers’

status and risks

Hyundai requests CMRT/CRT data from its suppliers and conducts necessary monitoring continuously regarding their use of illegal or unethically mined/

distributed 3TG (tin, tantalum, tungsten, gold) conflict minerals and cobalt from conflict zones in 10 African countries (Democratic Republic of Congo,

Rwanda, Burundi, Sudan, Angola, Uganda, Zambia, Central African Republic, Congo, Tanzania). It also checks the status of RMAP transactions based on

CMRT/CRT data submitted by its suppliers.

Conducting risk

improvement

activities

Hyundai provides training to alleviate conflict minerals risks in its supply chain and to raise supplier awareness. We have also enacted the “Conflict

(Responsible) Minerals Report” and the “Supplier Code of Conduct”. We work together with suppliers to minimize negative impacts on society and the

environment by human rights violations and environmental destruction, which may occur during the mineral extraction process. It establishes an annual

conflict minerals management plan to monitor the use of conflict minerals and smelters, recommending that all suppliers trade with RMAP-certified

smelters. Further, Hyundai continuously strives to expand the implementation of its mineral purchasing policies by its suppliers' supply chains as well.

Responsible Mineral Management

Responsible Minerals Management Policy

Hyundai has established a conflict minerals management system to

prohibit the use of conflict minerals unethically mined in conflict zones. In

accordance with the policy stipulated in the Conflict (Responsible) Minerals

Report, Hyundai clearly states to inspect whether socio-environmental

issues, such as human rights violations, ethical violations, and negative

environmental impacts, occur when its parts contain conflict minerals

(tin, tungsten, tantalum, gold) and strives to prevent the inclusion of

such minerals. To minimize human rights violations and environmental

destruction, it is crucial for Hyundai to establish a responsible supply chain

management system and urge its suppliers to participate in it. We make

every effort possible to fulfill responsibilities as a global company by actively

participating in responsible minerals management for a sustainable future.

Complying with relevant laws and requirements, Hyundai continuously

improves its responsible minerals management system. Hyundai’s conflict

minerals (responsible minerals) policy is based on the OECD Due Diligence

Guidance, the U.S. SEC’s requirements for companies in accordance with

the Dodd-Frank Act, and the EU’s Conflict Minerals Regulations so that it

can continue to conduct ethical and responsible management of conflict

minerals and cobalt.

Conflict (Responsible) Minerals Management Process

Based on responsible and clear-cut policies, Hyundai runs a management

process in line with the CMRT/CRT (Conflict Minerals Reporting/Cobalt

Reporting Template), a standard format provided by the RMI (Responsible

Mineral Initiative), and supports the OECD Due Diligence Guidance.

Going forward, we will maintain a transparent and stable supply chain

management system by making continuous efforts to ensure that our

suppliers do business with smelters certified by the Responsible Minerals

Assurance Process (RMAP).

Establishing policy

• Clarification of management

policies

• Operation of a management

organization

Raising supplier awareness

• Briefing sessions for suppliers

• Awareness-raising education

Checking suppliers’ status and risks

• Status of the use of conflict

minerals

• Receiving of RMI standard forms

Conducting risk improvement activities

• Request for expansion of conflict

minerals management

• Recommendation for trading

with certified smelters

Hyundai Motor Company Supplier Code of Conduct

Hyundai Motor Company Conflict Minerals Report

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Supply of

core parts

Purchase size

Replaceability

Cut-off Line for Core Supplier Selection

Core

suppliers

Standards to Select Core Suppliers

Supply Chain ESG Evaluation System

Supplier Risk Diagnostic Indicators

Hyundai has run a 5-star evaluation system (quality/technology/delivery/

win-win cooperation) to secure the desired quality and safety of products

and services and bolster fair trade and win-win cooperation between parts

companies (tier1, tier-2, etc.), accumulating plenty of know-how in supply

chain management.

Meanwhile, in relation to the supply chain ESG, Hyundai operates an ESG

evaluation system to diagnose and resolve ESG risks that exist in its supply

chain so that it can operate a sustainable supply chain beyond the existing

concept of CSR. To this end, it has developed supplier ESG evaluation

indicators for major ESG issues such as ethics, environment, labor, human

On-site Inspection of High-Risk Suppliers Risks

Following the analysis of assessment results, Hyundai and a third party

(evaluation agency) visit the sites of the suppliers with high or potential ESG

risks to verify the assessment results. In addition to on-site due diligence,

the visit also serves to identify risks that could not be identified through

written assessment. In addition, when visiting the site, the evaluation agency

provides a consulting service to suppliers by suggesting improvement

directions appropriate to supplier situations.

Results of Supplier Risk Assessment in 2021

Classification

No. of companies

Remarks

Written assessment

Tier-1 suppliers

380

Core tier-1 suppliers

Core tier-2 suppliers

Selection of

high-risk suppliers

Tier-1 suppliers

2.6% of those subject to written assessment

Core tier-1 suppliers

16% of those subject to written assessment

Core tier-2 suppliers

On-site due diligence

Suppliers subject to on-site due diligence

All high-risk suppliers

Improvement measures

by high-risk suppliers

Suppliers that established improvement plans

and completed the implementation

All high-risk suppliers

Including 10 high-risk suppliers from ESG risk assessment and 9 high-risk suppliers from safety risk inspection other than ESG risk assessment

Diagnosis and Due Diligence Process for Suppliers’ Risks

Written

assessment

Self-diagnosis

by tier-1 and core tier-2

suppliers

Selection of

high-risk suppliers

Risk estimation based on

current status information

and evidence

Risk

determination

Risk determination through

written assessment and

on-site inspections

On-site due

diligence

On-site visits and

interviews with high-risk

suppliers

Composition of Supplier Risk Diagnostic Indicators

ESG

risk evaluation

indicators

Ethics

• Anti-corruption, conflict

of interest, unfair trade,

prevention of counterfeit

parts, compliance with

export restrictions,

information protection,

responsible purchase

Environment

• Environmental system,

energy use, GHG

emission, water resource

use, air pollutants, waste

management, chemical

substance management

Labor/human rights

• Non-discrimination, wage

and welfare, working

hours management,

humane treatment,

freedom of association,

child labor, forced labor

Safety/health

• Safety and health system,

machine/facility safety,

emergency response,

accident management,

safety risk diagnosis,

health management, etc.

Management system

• Disclosure of corporate

name, appointment

of a person in charge,

risk checks, education

and communication,

information management,

grievance system,

business partner

management, compliance

with standards

Existing

management

indicators

Quality

• Quality management system,

claim cost reimbursement

ratio, order defect rate, etc.

Safety

• Safety management manuals,

organization & human rights,

training, accidents, etc.

Eco-friendly parts

• Prohibition of the use of harmful substances,

providing information about chemical

substances, eco-friendly systems, etc.

Ethics/human rights

• Prohibition of soliciting or bribery, labor and

human rights, prohibition of discrimination,

adherence to trade agreements, etc.

Delivery

• Production line stoppage,

A/S parts delivery rate, knock-

down parts delivery rate, etc.

Technology

• Basic capabilities,

execution capabilities,

future capabilities, etc

Win-win

• Payment conditions, contract

fairness, observation of laws,

win-win cooperation, etc.

rights, safety, health, and management system, based on domestic and

foreign laws and regulations, the OECD Due Diligence Guidance, the

Responsible Business Alliance, and major initiatives in the automotive

industry (Drive Sustainability, etc.) to achieve more accurate supply chain

ESG diagnosis and make necessary improvements.

Written assessment

Hyundai conducts ESG risk assessments for its tier-1 and tier-2 core suppliers

who must respond to each evaluation index and submit related evidence

(data, content, etc.). The information entered by suppliers serves as basic

data for identifying supplier ESG risks and classifying/managing high-risk suppliers.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Sustainability Improvement Goals for Supply Chain

Hyundai’s supply chain management strategy prioritizes the establishment

of the suppliers’ criteria for quality, technology, supply stability, fair trade

compliance, and an eco-friendly production system. Based on the criteria,

we have established and manage goals for supplier safety and health,

environmental management, and ESG risk assessment with an aim to

improve ESG capabilities of the supply chain.

First of all, we help them to acquire certification from the safety and

health management system (ISO 45001, formerly OHSAS 18001) and the

environmental management system (ISO 14001, etc.) so that they can

systematically manage fires, explosions, occupational accidents, spills

of pollutants, damage to natural capital, etc. In addition, we distribute

various safety and environmental guidelines to suppliers so that they

can manage their own safety and environment. We also conduct safety

and environmental inspections based on the guidelines to supervise the

implementation status of their safety and environment management

plans. For suppliers that have caused serious occupational accidents or

environmental disasters in spite of these efforts, we impose penalties

when renegotiating with them. Those whose business relationship has

been suspended are allowed to resume business with Hyundai only after

obtaining safety/environmental certification.

Support for Field Trips to Outstanding Suppliers in

Safety and Health

After identifying outstanding suppliers in safety and health management,

Hyundai has conducted field trips to their workplaces with the supplier’s

safety executives and officers. We have provided them with an opportunity

to apply the best practices based on their improvement directions

established accordin

g to their unique circumstances.

Distribution of Safety and Health Management Guides and

Best Practices to Suppliers

Hyundai distributes safety and health guides to its suppliers to help them

equip themselves with a safety and health system that can prevent them

from suffering occupational accidents while conducting online training

with health and safety contents customized for supplier employees.

Risk Determination and Improvement

Hyundai conducts on-site due diligence on core suppliers and high-risk

suppliers identified through the supplier ESG evaluation. For high risks, we

demand the establishment of improvement plans and their immediate

implementation. Hyundai continuously strengthens monitoring of supply

chain ESG risks by expanding the number of suppliers subject to ESG

evaluation and on-site due diligence. Furthermore, the 5-Star Win-win

Cooperation System launched in 2019 has been conducting tier-1 suppliers’

risk assessment every year, and its result has been reflected in the supplier

selection process.

Helping High-risk Suppliers Make Improvement

Hyundai helps suppliers better manage ESG risks based on the diagnostic

results in the areas of safety, health, and environment, where suppliers might be

particularly vulnerable, in addition to ESG risk assessment outcomes. To strengthen

supplier performance in the safety and health management, we conduct thorough

inspection with in-house safety and health experts for vulnerable suppliers,

distribute safety and health management guides, share the best practices with

them, and hold seminars on the latest trends in safety and health. In addition, to

prevent environmental risks that its suppliers may face in the course of business

operations, we support them in terms of the prohibition of the use of hazardous

substances in the production process and parts and the registration of hazardous

substances with the International Material Data System (IMDS).

Top 5 priorities in supply chain management strategies

Quality

competitiveness

• Delivery defect rate

• Claim reimbursement

ratio

• Quality management

• On-site evaluation

of manufacturing

processes

• Outsourcing management

Supply stability

• Smooth supply of parts

(prevention of

production

line stoppage)

• A/S parts delivery rate

• KD parts delivery rate

Eco-friendly

production system

• Eco-friendly production

system

• Energy consumption

management

• Air pollutant management

• Waste management

• Hazardous chemicals

management

Technological

competitiveness

• Basic competencies

• Performance

competencies

• Capabilities for the

future

• Reliability testing

capabilities

• S/W verification

capabilities

Fair trade

• Payment terms

• Contractual fairness

• Compliance efforts

• Win-win cooperation

(support for win-win

growth)

Safety and Health

Improvement

Process

for Suppliers

Pre-preparation for on-site

inspection of suppliers

Preliminary identification

of safety and health level

Remedial action and

monitoring

Additional

on-site evaluation

of suppliers

with insufficient

improvement records

Externally-commissioned inspections

The lowest 50 suppliers in the preliminary identification

Joint inspection by Hyundai’s purchase/safety organizations

The lowest 30 suppliers in the preliminary identification

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

In addition, we conduct ESG risk assessments for suppliers every year

to manage ESG risks that may arise from suppliers in the fields of ethics,

environment, labor/human rights, and safety/health. Starting from 2022, we

have expanded our evaluation target to all tier-1 suppliers, paving the way for

supplier ESG evaluation to play a bigger role in addressing ESG risks involved

in supply chain.

Supply Chain Sustainability Goals

Classification

Performance

Goal

2019

2020

2021

Acquisition of the certification for

environmental management system

by tier-1 suppliers

87%

91%

92%

100%

by 2024

Expansion of tier1 suppliers ESG risk

assessment range

20%

100%

by 2024

Support safety device installation to

prevent suppliers’ accident

New

project

100%

by 2024

Product Quality Innovation

Hyundai aims to achieve “zero accidents”, protecting drivers, passengers, and pedestrians, based on its quality philosophy

of “producing defect-free vehicles that will never break down” backed by cutting-edge safety technologies. To this end, we

continue upgrading overall quality and safety systems not only by promoting preemptive quality and safety measures from

the vehicle development stage, but also by preventing any significant problems afterward through early detection, early

improvement and early after-sales actions. In particular, we will establish a sustainable safety management system designed

to maximize customer satisfaction and strengthen trust by developing quality and safety training programs, operating quality

and safety reporting centers, analyzing safety information, and establishing safety test sites.

Customers

Product Quality Management

Establishing Quality Management System

Hyundai seeks to create “customer safety” values by securing leading quality

standards in the global market and strengthening quality management

through technical preventive quality activities, among other initiatives. We

have established a company-wide integrated quality management system

to satisfy customers’ diverse quality and safety requirements, while each

of our production sites operates their own quality management system to

promote thorough quality control in all processes, including automobile

design, parts development, process operation, pre-mass production, and

mass production.

Establishment of the Quality Management System (ISO 9001)

No. of business sites

subject to acquisition

No. of business sites

with 3rd-party

certified quality

management systems

Percentage of

quality management

system assurance

100

Preemptive Management of Quality Risks

From the early design stage of new vehicle development, Hyundai

preemptively inspects and manages parts suppliers as well as its own

production process quality. Based on product drawings, we conduct a

comprehensive review of parts in terms of functions, structures, reliability,

and durability, while carefully analyzing our own processes and those of

suppliers before issuing the final approval, thereby eliminating quality

risks throughout production processes in advance. In addition to our own

verification of test vehicles, Hyundai relies on the test drive opinions of

customers and professional quality organizations to identify major issues

and carry out improvement activities in parallel. Moreover, Hyundai holds

quality inspection meetings on regular basis, and in particular, on the verge

of new car models’ mass production, reports the quality risk assessment

results and taken measures to the highest level of management.

Quality Risk Assessment – Identification and Improvement

Hyundai has established a control tower devoted to the management of

vehicle quality risks in the production process. Whenever a quality risk is

detected from information acquired through statistical process control,

periodic inspections, and shipment pass rates, the control tower takes the lead

in conducting joint investigations and taking the necessary countermeasures.

Also, in order to prevent quality risks from occurring in

the vehicle production

process, we take thorough preventive measures, such as process management

by suppliers, assessment of quality prevention activities, validation of quality

inspection equipment, and reliability testing of parts.

Quality Mindset Campaign

Hyundai is carrying out the “Quality Mindset Campaign” with the purpose

of spreading a quality culture throughout its entire car development,

production and sales processes, while its employees internalize the quality-

first mindset. The campaign serves as an opportunity for the company

Quality Mindset Campaign

Training aimed at strengthening quality verification capabilities

Quality Management Standards and Techniques

Hyundai has introduced and applied quality management techniques to

strengthen its market competitiveness on the basis of “defect-free quality”.

Our quality management techniques, aimed at providing customers with

vehicles of the very highest quality in all fields, such as R&D, production,

sales, and services, are supported by the best experts in each field (Man);

optimal equipment (Machine); the best parts (Material); the best method

(Method); thorough verification (Measurement); and commitment to defect-

free quality (Moral). Moreover, in order to actively respond to the global shift

toward electrification, we have established and applied specialized quality

management standards and criteria for each type of vehicle including

hybrids, EVs, and hydrogen EVs. We also make continuous efforts to upgrade

quality management standards and criteria based on the data collected and

analyzed in quality risk management processes, such as quality checks, case

studies, and improvements.

Quality Management Techniques to Produce Vehicles of the Highest Quality

Best parts

(Material)

Optimal equipment

(Machine)

Best experts

(Man)

Best method

(Method)

Thorough verification

(Measurement)

Commitment to

defect-free quality

(Moral)

•

Period:

January - December 2021

•

Participants:

1,086 people

•

Courses:

Controller quality verification expert training course (introduction to

and analysis of the controller SW testing and the vehicle communication system,

introduction to vehicle control system, etc.), vehicle vibration and noise theory

and practice, automotive structures and disassembly and assembly, major ADAS

technologies, introduction to EV battery systems, etc. (529 quality related courses are

offered on “Learning Lounge”, available for all employees)

to listen directly to voice of customers (VOCs) on quality issues through

various initiatives including “Customers’ Quality Diagnosis and Employees’

Input”, “Meetings between Customers and Employees”, and “On-site

Meetings between Customers and Production Quality Officers.” Based

on the VOC, Hyundai is conducting the New Vehicle Quality Assurance

Program, among others, as a way to deliver products of perfect quality to

its customers. We will continue to promote various quality improvement

activities by promoting close communication with customers and their

active participation.

Strengthening Quality Verification Capabilities

Hyundai provides annual training on the roles and major tasks involved in

securing its pre-manufacturing quality, manufacturing quality, and market

quality as a way to strengthen the verification capability of its overall quality

value chain. To maximize the effectiveness of verification through enhanced

verification capacity, each course includes not only basic theoretical

education but also practical and experience-oriented education if necessary.

In addition, we offer expert courses on quality verification in collaboration

with external educational institutions to verify new technologies following

the transition to electrification and to strengthen the verification of quality

issues from the customer's point of view.

Courses to Strengthen Quality Verification Capabilities

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1. Introduction

Quality Assurance and Management

Hyundai strives to enhance its quality assurance and management for the

safety and protection of customers after product sales as well as quality

management from vehicle development to production, thereby ensuring

safety of customers and happiness of their families. In addition, we take

quality improvement measures aimed at boosting customer satisfaction by

identifying customers’ specific complaints, while continuously reinforcing

maintainability by evaluating the consistency of maintenance services and

improving diagnosis methods, among others.

Blue Basic Inspection

Hyundai provides a free basic inspection service to Bluemembers customers

to keep their vehicles in top condition – 8 times in 8 years for passenger

vehicles, 7 times in 3 years for commercial vehicles. The basic inspections

cover the engine room, the undercarriage and general inspections essential

for customers’ safety and convenience.

Warranty Repairs

Hyundai provides warranty repairs for vehicles that are within the warranty

period within the scope of warranted mileage. If the cause of the vehicle’s

failure is technically found to be due to a defect in materials or workmanship,

the vehicle may be subject to warranty repairs.

Emergency Road Service

Hyundai operates an emergency road service that offers on-site first aid,

simple maintenance, and transportation to a designated repair shop in the

event that a vehicle breakdown makes it difficult or impossible to drive. The

emergency service is provided free of charge for up to six years after the

shipment of vehicles within the warranty period.

Warranty for Eco-friendly Car Engines and Power Transmission Parts

Classification

Model name

Warranty period

Hybrid exclusive parts

Grandeur Hybrid, Sonata Hybrid, IONIQ Hybrid, IONIQ Plug-in, AVANTE Hybrid

10 years / 200,000 km

EV exclusive parts

IONIQ Electric

10 years / 160,000 km

Voluntary Recall Status

(Unit: 10,000 units, KRW million)

2018

2019

2020

2021

No. of recalled vehicles

157

196

623

272

Costs of recalls

170,700

78,000

305,200

1,442,300

Warranty Provisions

(Unit: KRW million)

2018

2019

2020

2021

Provision warranty balance at the beginning of

the period

5,226,297

5,177,128

5,447,307

8,514,173

Warranty costs during the period

1,765,815

2,261,010

1,963,782

2,551,716

* Based on consolidated financial statements

Warranty Period for Free Repairs

Hyundai applies the free repair warranty period in consideration of the

average life cycle, durability, and sustainability of each type of vehicle,

such as passenger cars, SUVs, and commercial vehicles (trucks and buses).

Recently, it has introduced a service that allows customers to select

the warranty period according to their own driving patterns and habits.

In particular, we maximize the sustainability of eco-friendly vehicles by

extending the warranty period for the engine and power transmission parts

of hybrids, EVs and hydrogen EVs. We are also contributing to minimizing

air pollutant emissions with guarantees for catalyst devices, electric control

devices, and other exhaust gas parts of older high-emitting models.

Voluntary Recall

Hyundai constantly monitors customer complaints and voluntarily recalls all

the relevant vehicles to protect customers as soon as manufacturing defects

assessed as highly likely to cause accidents are identified. When a vehicle

recall is determined, we inform customers of the defects, corrective actions,

and compensation including free service. We are also expanding sales

guarantee provisions to proactively manage financial risks caused by recalls

and quality assurance.

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1. Introduction

Product Safety Technology

Prevention of Safety Accidents

Advances in mobility, electrification, connectivity, and autonomous

driving have expanded the purpose of automobiles from “transportation”

to “space”, reflecting the latest changes in contemporary lifestyles, and

expanding the scope of safety far beyond what was accepted as sufficient.

Hyundai introduces advanced safety technologies that can not only prevent

accidents from taking place in the first place but also protect occupants and

pedestrians from potential dangers in advance. In addition, to respond to

secondary accidents which may occur due to the diverse variables involved

in primary accidents, we introduce new technologies in driver and occupant

monitoring, response to hazardous environments, boarding and alighting

safety, and remote vehicle management.

Multi-Collision Brake

The multi-collision brake reduces multiple collisions, such as secondary

accidents, by operating the appropriate braking function on the vehicle

when the airbag is activated during an accident involving a head-on or side

collision. The system goes beyond the conventional accident avoidance

or prevention features, as it conducts a post-accident assessment and

protects not only the driver and passengers but also the surroundings of

the accident vehicle.

Advanced Driver Assistance System

The advanced driver assistance system recognizes objects and movements

with advanced sensors, cameras and radar, and warns the driver or controls

the vehicle when a risk of collision is detected. Technically, the current

system can maintain the proper distance from the vehicle in front and

reduce speed by recognizing traffic cameras and signs.

Features of Hyundai’s Third-Generation Platform

Space-Securing Platform

Safety-First Platform

Energy-Efficient Platform

Stable Driving Performance

Engine room, seating, underfloor,

luggage space, etc. have all been lowered

Rearranged body structure for

dispersing energy during a collision

Reduced air resistance by positioning

underbody lower and flattening it

Handling and stability nimbly

responding to driver’s intention

Models by Platform Type

Classification

K3 Platform

M3 Platform

N3 Platform

Applied car models

AVANTE

G80, G90, GV70, GV80

STARIA, SONATA, TUCSON

Driver Protection

While it is important to prevent accidents caused by vehicle driving through

multi-collision prevention automatic braking, advanced driver assistance,

and autonomous driving redundancy systems, devices designed to protect

drivers and passengers in the event of an accident also play a crucial role.

Hyundai ensures the safety of drivers and passengers by researching and

developing devices that strengthen/utilize vehicle platform functions, apply

collision prevention/mitigation technology, and reduce the rate of injury in

the event of an accident. To help drivers make safe driving a habit, we run various

programs such as the “Safe Driving Habit Guide Broadcast”, “School Vehicle

Safe Driving Campaign”, and “Connected Car Safe Driving Insurance Discount.”

Multi-collision Airbag System

The multi-collision airbag system developed by Hyundai for the first time in

the world precisely calculates a number of conditions such as the occupant's

unstable posture and speed when the impact is so weak that the airbag does

not deploy in the first collision. Improvements have been made to lower the

force of the baseline impact or adjust the timing to activate the airbag more

easily and quickly in crashes.

Third-generation Integrated Platform

The vehicle platform is an important factor that determines the basics of a

car, such as design, driving performance, safety, and interior space. The third-

generation integrated platform developed by Hyundai can secure interior

space, enhance safety such as by maximizing the strength of passenger

space, improve energy efficiency such as power/fuel efficiency, and realize

stable driving performance in the driving environment.

Multi-collision prevention automatic braking

Multi-collision airbag system

Active hood system

Key Features of the Advanced Driver Assistance System

Forward Collision-

Avoidance Assist

Give warning the risk of a forward collision or automatically

assists with braking if a preceding vehicle rapidly

decelerates or a vehicle or pedestrian appears in front

Lane Keeping Assist

Give departure warning or automatically provide steering

assistance if a driver leaves the lane without operating the

turn signal while driving at a certain speed or more

Blind-Spot Collision-

Avoidance Assist

Give alert when there is a risk of collision with a vehicle

behind while driving, and automatically assist with braking

when there is a risk of collision with a vehicle nearby while

reversing out of a parking space

Redundancy System

As driver intervention is being reduced according to the development of

autonomous driving technology, it is essential to secure precise safety

technology in preparation for emergency situations. Hyundai has developed

an autonomous driving redundancy system that ensures the safety of

passengers by safely driving and stopping the vehicle when a system

failure is detected during autonomous driving. Redundancy refers to a dual

configuration of steering, braking, power, and communication. When a

function does not work properly, the redundancy system helps the vehicle to

run smoothly and safely by replacing it with an assistive device. In addition

to the redundancy system, Hyundai plans to develop an autonomous vehicle

with high safety and reliability by integrating enhanced vehicle cyber security

features and camera and lidar sensor pollution prevention technologies. By

2023, we will introduce a ride-hailing service using autonomous vehicles

such as the IONIQ 5 robot, while expanding the autonomous driving

ecosystem in cooperation with vehicle sharing platforms.

Pedestrian Protection

Hyundai is also taking the lead in developing technologies that can protect

pedestrians in the event of a vehicle accident. We have developed and

applied various technologies to mitigate the impact in the event of a

collision with a pedestrian by improving the shape of the vehicle and the

structure of the engine room, or to detect the moment of collision with a

pedestrian and absorb the collision energy of the pedestrian by operating

the hood, etc. We are also striving to develop technologies to identify

pedestrians based on camera and LiDAR sensors and to prevent collisions

between pedestrians and vehicles in advance by operating safety systems

such as the active brake system.

Active Hood System

Hyundai's active hood system detects a collision with a pedestrian and raises

the bonnet to protect the pedestrian. In the event of a collision between a

pedestrian and a vehicle, the actuator under the bonnet moves, raising the

bonnet by about 6 cm, and creates a shock-absorbing space between the

bonnet and the engine room, thereby greatly reducing the degree of injury

to pedestrians.

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1. Introduction

Automotive Safety Assessment

2022 IIHS Safety Assessment

On February 24, 2022, Hyundai won a “Top Safety Pick Plus (TSP+)” rating for

nine car models and a “Top Safety Pick (TSP+)” rating for four models in the

crash safety evaluation conducted by the Insurance Institute for Highway

Safety (IIHS) of the USA. The IIHS conducts a comprehensive evaluation

of the collision stability and collision prevention performance of vehicles

launched in the US market every year, giving the vehicle with the highest

level of safety the TSP+ rating and a vehicle with a good level of safety the

TSP rating. The IIHS safety assessment covers collision impacts on the

driver-side small overlap front, passenger-side small overlap front, moderate

overlap front, and sides, along with an evaluation of roof strength, head

restraint, forward collision avoidance system (vehicle-to-vehicle, vehicle-to-

pedestrian), and headlamps.

Hyundai’s Nexo, Santa Fe, Tucson, Palisade, and Genesis G70, G80, G90,

GV70, and GV80 won the TSP+ rating, whereas Venue, Santa Cruz, Sonata,

and AVANTE (US local name Elantra) received the TSP rating. Having once

again proved the outstanding safety of Hyundai and Genesis through

the results of the comprehensive IIHS crash test, Hyundai will uphold its

commitment to be a brand that always puts customer safety first.

Winners of 2022 IIHS Safety Assessment

Classification

TSP

TSP+

Hyundai

Venue

Santa Cruz

Sonata

AVANTE (Elantra)

NEXO

Santa Fe

Tucson

Palisade

Genesis

G70

G80

G90

GV70

GV80

* Based on the assessment results revealed on February 24, 2022

G70

G80

G90

GV70

GV80

Palisade

Tucson

Santa Fe

NEXO

2022 IIHS Awards-winning Manufacturers

2022 TSP

2022 TSP+

Volvo

Audi

BMW

Ford/Lincoln

Nissan

Mazda

Honda/ACURA

Subaru

Tesla

M-Benz

Kia

Hyundai/

Genesis

Toyota/Lexus

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1. Introduction

Customer Experience Innovation

Hyundai aims to become a beloved and trusted company by realizing mankind’s dream of “safe and free movement and a

peaceful life” and sharing the fruits of its success with all customers around the world. While providing a valuable mobility

experience by connecting various technologies and infrastructures and creating synergies, we are strengthening our service

mindset of thinking from customer’s perspective, upgrading service quality to provide new solutions ahead of customer

needs, and fulfilling customers’ need for eco-friendly, public interest value consumption in conjunction with its brand vision.

We always care about customers and listen to their voices by having more dialogue with them.

Maximizing Customer Satisfaction

Promoting Global Service Strategy

In the mid- to long-term perspective, Hyundai is striving to provide

optimized service programs for each segmented customer type, diversify

its service bases so that customers can enjoy services anytime, anywhere,

and realize a differentiated digital customer experience process throughout

its after-sales service. To this end, we help our overseas subsidiaries, sales

corporations, and newly established enterprises in particular to establish

the direction of their customer service strategies. In line with our mid- to

long-term electrification roadmap, we will set up an EV service model

and continue to strengthen customer support so that EV users will not

experience any inconvenience while driving, by optimizing its EV-devoted

vehicle management, vehicle charging, and repairs of high-voltage batteries.

Applying the Customer Service Standard Guide

As part of its efforts to continuously promote activities designed to improve

customer satisfaction, Hyundai has launched a company-wide control tower

to innovate customer experience and published the “Customer Service

Standard Guide” based on the order of the customer service that they

receive during the vehicle purchase process. The guide presents clear-cut

instructions on customer response actions so that employees working in

Hyundai’s customer contact channels can focus on key interaction elements

and offer a uniform and excellent service at customer contact points.

Convergence Training for the Sales Sector Service

Hyundai has established an ICT-based convergence education system

in order to bolster the competency of its employees in customer contact

channels such as vehicle sales and product CS, and has also conducted

knowledge-enhancing training on vehicles (electric vehicles, luxury vehicles)

and customer consultation (CRM, CS) skills improvement training in an

effort to nurture experts in vehicle sales, customer interaction, and customer

service. As a result of its operation of the convergence education system

for customer service in 2021, Hyundai’s customer satisfaction score (KCSI)

increased by 1.0 point over the year.

Excessive Maintenance Prevention Program

Hyundai runs the “Excessive Maintenance Prevention Program” to prevent

damages caused by the excess-provision or overcharging of services by

the company and offer customers effective compensation in the event of

damages. The program has further raised customer trust by reinforcing

advance guidance on vehicle repair history and providing compensation of

up to 1,000% for overcharged repair costs. In addition, we impose penalties

on maintenance suppliers that charge excessively for repair costs in a bid to

put a stop to their overcharging practices and restore the trust of customers.

National Customer

Service Index

(NCSI)

Receive claims about excessive maintenance

Execute on-site investigation by HMC

Execute investigation by insurance company

(When decided as excessive maintenance)

Determine coverage ratio according to the standard of compensation

Pay coverage for the amount of excessive maintenance

Impose penalty on the relevant maintenance supplier

Excessive Maintenance Prevention Program

Results of External Customer Satisfaction Surveys

Evaluate customer satisfaction level

by customer expectation, customer

quality perception, customer value

perception, customer complaint,

and customer loyalty (may compare

by nation, industry, and business)

Ranked first in five

category

Korean Customer

Satisfaction Index

(KCSI)

Korean Standard-

Quality Excellence

Index (KS-QEI)

Korean Standard-

Service Quality

Index (KS-SQI

Convergence Education System for the Sales Sector Service

Customer Satisfaction Level in Passenger Vehicle Category (KCSI)

(Unit: Points)

2019

2020

2021

Score

89.9

91.8

92.8

Establishment of ICT-based educational facilities

and learning environment

Participated by 6,515 car masters as of 2021

Enhancement of

vehicle (product) knowledge

Enhancement of customer

consultation skills (CRM, CS)

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1. Introduction

In 2021, we integrated passenger and commercial business divisions as

part of function-oriented reforms, and are now striving to strengthen global

passenger and commercial customer service, while also creating synergies

through the reorganization. During the prolonged COVID-19 pandemic, we

offered customer care tailored to the unusual circumstances, including non-

face-to-face mobile vehicle repairs and proliferation of communication

based on mobile apps and messenger services. Going forward, we

will further advance global customer management with customized

strategies that fully consider the characteristics of regional markets and the

expectations of local customers.

Building Service Bases

Hyundai has built service bases which customers can easily and

conveniently access anytime, anywhere for not only its maintenance

services but various other differentiated services as well. As of the end of

2021, we ran approximately 1,400 serv ice bases composed of direct service

centers and official service suppliers (Bluehands) nationwide, in addition to

some 370 Bluehands dedicated to EVs and some 500 Bluehands dedicated

to Genesis.

Maintenance Manuals and Vehicle Manuals

Hyundai publishes vehicle maintenance manuals and electronic circuit

diagrams, and distributes them to its directly-operated service centers,

Bluehands, and individual car owners who can carry out repairs by

themselves. After signing up to the domestic technical information website

(gsw.hyundai.com), users can check electric circuit diagrams, diagnostic

guides for each code, body manuals, maintenance manuals, wiring

connectors, disassembly and assembly information, and individual product

information. They can also move to the Hyundai MOBIS genuine parts

inquiry site to obtain essential information on necessary parts. Hyundai will

continue making its maintenance and vehicle manuals easily accessible

to customers so that they can receive after-sales services quickly and

accurately while reducing their vehicle maintenance costs.

Training Support for Bluehands Maintenance Personnel

Hyundai nurtures outstanding maintenance personnel in collaboration

with vehicle maintenance educational institutions such as colleges and

technical training institutes. The institutions offer technical education

in various fields related to vehicles, such as vehicle maintenance, body

repairs, and repair devices, while the company offers them support in the

form of maintenance instructors, training vehicles, and textbooks. We also

offer opportunities for talented people to be recruited by Bluehands.

Strengthening Technical and Maintenance Capabilities of

Service Bases

Hyundai makes continuous efforts to build customer trust in service quality

by strengthening technical and maintenance capabilities of its directly-

operated service centers and Bluehands. We aim to train the best engineers

who can comprehensively deal with minor problems that may occur in

vehicles, in addition to training engineers at service bases to enhance their

basic competencies. We continue to upgrade maintenance manuals and

vehicle manuals used by service bases, while holding regular workshops to

share knowledge on technology and maintenance.

Hyundai Master Certification Program

Hyundai operates the Hyundai Master Certification Program (HMCP),

a technology certification program, to nurture outstanding Bluehands

engineers. For the HMCP expert qualification, Hyundai evaluates its

engineers’ technical capabilities in nine areas, including vehicle convenience

devices, advanced driver assistance systems, audio/video/navigation

systems, engines, vehicle communication, hydrogen EVs, EVs, hybrids, and

Genesis-specific specifications. According to the outcome of evaluations,

we issue four grades of qualifications – Levels 1 and 2 (Technician), Level 3

(Master), and Level 4 (Grand Master). In 2021, we held the “Grand Master

Tech Festa” and awarded the HMCP level-4 qualification to 17 engineers.

Hyundai Master Certification Program Electrified

Based on the training and evaluation experience of HMCP, Hyundai has

introduced Hyundai Master Certification Program Electrified (HMCPe)

in a bid to further improve the quality of EV maintenance services and

strengthen customer engagement. Through HMCPe, we secure expertise

in EV diagnostics and repair technologies as a way to proactively provide

customers with safe and professional maintenance in the most convenient

way possible. In March 2022, we awarded the e-Master qualification to

2,032 engineers in recognition of their ability to perform independent

electrification diagnosis and repair and conduct high-level work among

HMCP grand masters of Bluehands nationwide.

Service Programs in Korea

Visiting Before Service

Visit a location designated by a customer

and provides vehicle maintenance and advice

and assistance

Emergency Charging

Service

Provide 7 kWh worth of free EV charging for

stranded drivers, enough for 22-44 km of driving

Home-to-Home Service

Pick up vehicles where and when designated by

customers and deliver them after repairs are made

Car Rental Service

Provide car rental service for customer

convenience when repairs are needed during

the warranty period

Special Services for Genesis Car Owners

Genesis Butler Service

Exclusive butler service for Genesis customers

Genesis Visiting Auto Care

Service

Visit any location that customers desire and

provide a replacement service for engine oil and

other consumables

Genesis Airport Service

Provide Genesis customers using Gimpo

International Airport with free car valet services,

consumables replacement services while traveling

Genesis Home-to-Home

Service

A home-to-home service, free of charge,

as part of Genesis Mobility Care service

Service Brands

Bluehands

This network of Hyundai’s official service

suppliers is dedicated to improving t

he environment to enhance customer safety

and convenience, as well as providing services

at the place closest to the customers.

Bluemembers

This service for Hyundai owners provides

customers with a fun and convenient

vehicle service.

Blue Link

Hyundai’s connected car service provides support

to customers in remote vehicle control,

safety and security, vehicle maintenance,

route guidance, and concierge services.

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1. Introduction

We will open approximately 120 additional EV-dedicated Bluehands and

build an EV maintenance infrastructure for some 500 EVs by the end of

2022, with the aim of making EV maintenance possible at all Bluehands

across Korea by 2025, and securing up to 200 Bluehands dedicated to

FCEVs.

Sustainable Brand

Brand Management System

Hyundai has built and operated a comprehensive brand governance system

to enhance its corporate and product brand values, thereby managing its

brands systematically. It has also established a brand strategy system that

enables it to communicate consistently under the same direction, as well

as a brand and trademark system for vehicles, technologies, and services

called “Brand Architecture”. In addition, we have published the “Brand Image

Guidelines” to specify visual implementation plans for our brands, which

have been shared and observed by all departments.

While operating the Brand Management System (BMS) to raise the

effectiveness of the brand strategy system, brand architecture, and brand

image guidelines, we created the “Brand Home”, an in-house portal website,

and established a help desk called “Brand Desk” to improve the quality of

the company’s brand-related productions across all sectors.

Brand Tracking Study

Hyundai conducts the Brand Tracking Study (BTS) to track brand indicators

in 33 major countries (sales markets). To measure (potential) customers’

awareness, understanding, and preference for Hyundai brands, we analyze

indicators in such categories as the price, performance, quality, and eco-

friendliness of each brand. In addition, by promoting global brand monitoring

activities consisting of regular inspections of the application of its brands

and trademark images, we ensure that company-wide brand/trademark

strategies, systems, and guidelines are strictly applied worldwide.

BTS Indicators

Price

Customer acceptance of Hyundai vehicle prices compared to

competitors’ (based on a price perception survey)

Performance

Combined score of high-tech competence, design competence, etc.

compared to the market average of 100 points

Quality

Combined score of good value, care-free ownership, service quality,

etc. compared to the market average of 100 points

Eco-

friendliness

Combined score of environmental friendliness, social responsibility, etc.

compared to the market average of 100 points.

Categorize and analyze green vehicles on aided awareness,

brand perception, etc.

Brand Image Enhancement and Evaluation

In addition to the “brand value enhancement” marketing activities Hyundai

carries out in connection with transition to a company specializing in

smart mobility solutions, we aim to further enhance our brand image by

conducting brand campaigns and communication activities that reflect

sustainability efforts in eco-friendliness and public interest; reinforcing sales

network efficiency centered on high-quality dealers; conducting online

marketing in areas where COVID-19 remains prevalent; and promoting CSV

activities to solve the problems currently facing the global community. In

addition, after conducting brand image enhancement activities, we evaluate

their contributions in the areas of corporate value, sales, and customer

satisfaction.

“for Tomorrow” Global Project

Hyundai is running the “for Tomorrow” project in partnership with the

United Nations Development Programme (UNDP) for a sustainable future.

It is a “crowdsourcing” type of project that finds and implements solutions

by gathering the collective intelligence of people from all over the world

with the aim of creating a better tomorrow and solving global problems

in the areas of transportation, housing, and the environment. Through the

“for Tomorrow” project, Hyundai will continue to promote our brand vision,

“Progress for Humanity”, and contribute to developing solutions that can

help create a better tomorrow for humanity. Anyone around the world who

wishes to participate in creating a better future can freely propose ideas

through the “for Tomorrow” project platform at www.fortomorrow.org.

H2U (Hydrogen To You) Campaign to accelerate the transition to a

hydrogen society

Together with influencers from diverse fields, Hyundai is conducting the “H2U

(Hydrogen to You) Campaign” to promote the value of hydrogen EVs and

hydrogen energy in Europe. Among the globally active influencers involved in the

campaign include DJ and fashion designer Peggy Gou, tech YouTuber Alexibexi,

and architectural photographer Konrad Langer, all of whom emphasize the

urgency of transitioning to a hydrogen society and the importance of expanding

hydrogen EVs and hydrogen energy to create a hydrogen ecosystem.

H2 Economy Campaign to emphasize the importance of the hydrogen society

In partnership with Bloomberg, a global media group, Hyundai is conducting

the “H2 Economy Campaign” to promote the importance and accelerate the

emergence of the hydrogen society. By communicating with opinion leaders

around the world, the campaign aims to generate momentum for the hydrogen

ecosystem and find ways to realize the hydrogen society while promoting

Hyundai’s technological competitiveness in the hydrogen economy. According

to a Bloomberg survey of 200 campaign audiences in the United States, about

80% of them positively evaluated hydrogen energy and Hyundai’s hydrogen

technology, stating that they would be willing to purchase a hydrogen EV, thereby

confirming the effectiveness of the H2 Economy Campaign.

“For tomorrow, we won’t wait” video by Hyundai x BTS

Since 2020, Hyundai has been conducting the “Global Hydrogen Campaign” with

BTS, an internationally-acclaimed Korean boy band, under the slogan “Because

of You” in order to spread the eco-friendliness and sustainability of hydrogen as

a clean energy source of the future. In 2021, Hyundai and BTS jointly released a

special video on the theme of “For tomorrow, we won’t wait” featuring activities

that anyone can practice in their everyday life, such as picking up trash while

exercising, zero waste, fashion recycling, growing plants, and using eco-friendly

hydrogen vehicles. Going forward, we will continue engaging in activities in which

everyone can participate for a better future while striving to communicate our

sustainability vision as a way to exert a positive influence on the global community.

Hydrogen Campaign

The world is envisioning a future in which all forms of transport and

technology are operated in a carbon-free, sustainable way. In order to realize

the carbon neutrality agreed upon by the global community, the transition

from fossil fuels to renewable energy is inevitable. Hyundai will achieve

carbon-free green hydrogen production and conversion in its production

processes as a way to compensate for instability in the supply of renewable

energy. We are committed to building a hydrogen EV and hydrogen energy

brand through internal and external communication, and by encouraging the

entire global community to participate in the realization of carbon neutrality

based on green hydrogen.

Promoting Brand Image at the Investor Daily Summit 2021

In July 2021, Hyundai participated in the Investor Daily Summit 2021 held

in Indonesia and discussed ways to explore new business models and

investment opportunities in Indonesia with key figures from the Asia-Pacific

region. We gave a presentation on how to revitalize the eco-friendly car

business, sharing our brand vision and future plans to lead the global eco-

friendly car market. We have built the first automobile production plant in

the ASEAN region in Indonesia, which will not only play a role in developing,

producing, and selling strategic vehicles for the ASEAN market, but will also

serve as a strategic base for emerging markets in Southeast Asia with EVs

such as the IONIQ 5.

COVID-19

for Tomorrow

U(Hydrogen To You) Campaign

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1. Introduction

Labeling Obligations

Korea

Product

ID labeling (type and model of car, vehicle identification number, vehicle weight, year of production, tire, etc.)

Environment

Fuel efficiency labeling, exhaust gas warning labeling

Safety

Airbag warning labeling, etc.

China

Product

ID labeling, vehicle identification number (W/screen), anti-theft warning labeling

Environment

Fuel efficiency labeling

Safety

CCC labeling, child restraint system (CRS) warning airbag labeling

Europe

Product

ID labeling, E-marks certifying various items (lights, safety belts, horn, mirrors, window glass, etc.)

Environment

Diesel engine labeling, battery recycling labeling, fuel labeling, refrigerant labeling

Safety

Airbag warning labeling, Airbag warning labeling, ISOFIX CRS anchor labeling

North America

Product

Manufacturer’s suggested retail price (MSRP) labeling

Environment

VECI labeling (certified exhaust emissions data), refrigerant labeling

Safety

Tire pressure information labeling, safety certification labeling, airbag warning labeling

HMG Driving Experience Program

Hyundai is operating the “HMG Driving Experience” program to give

customers first-hand experience of various brands of Hyundai Motor Group,

including Genesis and Kia. Since launching the program in 2019, Hyundai

has provided theoretical and skills training on vehicle driving along with

the opportunity to drive various models. In 2022, Hyundai opened the

HMG Driving Experience Center, equipped with eight courses including

four experience tracks and four experience zones. At the Center, customers

can test-drive more diverse models and gain track experience, including

emergency braking, handling, and high-speed driving, as well as an

obstacle course featuring drifting, emergency situations, and ramps. In

particular, the Center runs EV experience sessions designed to promote

the potential of EVs and provide practical information necessary for

customers’ EV purchase plans.

“Longest Run” Contactless Race

Hyundai has been operating the “Longest Run”, an on/offline

environmental campaign, participated by customers and the general

public, since 2016. The 2021 Longest Run campaign was conducted in

the form of contactless race, encouraging participants to run the course

of their choice at the desired time while participating in eco-friendly

missions through a dedicated application.

Information Protection

Customer Information Management System

(CPO, Technical & Physical Measures)

Hyundai operates the Personal Information Protection Committee, a

company-wide consultative body that establishes and oversees its customer

privacy protection systems. The Committee is chaired by the head of the

Hyundai Information Security Center, who also serves as the company’s

Chief Privacy Officer (CPO), and is composed of working-level members

from the departments in charge of privacy management processes as well

as legal and IT experts in privacy protection. The Committee meets officially

once a year, and also holds working-level committee meetings to deal with

issues related to privacy protection whenever necessary.

Launched in October 2020, the Security Compliance Team (the team

dedicated to personal information protection) monitors the performance of

IT-related maintenance operators and personal data processing consignees,

as well as Hyundai’s overall performance, and distributes the company’s

privacy protection policies and guidelines to privacy officers in each

department for regular training and scrutiny. Also, through the operations

of the Personal Information System (PIS) and the Security Assurance

Management System (SAMS), we safeguard our customers’ personal

information systematically. The PIS prevents leaks of personal information by

restricting access to files to authorized personnel when personal information

needs to be extracted from or processed in the company’s personal

information processing system. The SAMS is designed to ensure that all the

company’s personal information processing systems undergo a pre- and

post-impact assessment by the Security Compliance Team, which evaluates

the adequacy of the systems through legally authorized processes.

In 2022, we will further strengthen measures against violators of the privacy

regulations. To this end, we will enact and amend the privacy protection

regulations, thereby specifying that disciplinary requests can be made in the

case of violations of the relevant laws and regulations, list cases of privacy

violations, and also establish criteria for the measurement of risks related to

privacy protection.

Major Information Security/Cybersecurity Activities in 2021

•

Specified incident response procedures according to the business

continuity plan (BCP) in the Security Incident Prevention and

Response Guidelines and conducted biannual inspections

•

Participated in the 2021 cybersecurity simulation training organized

by KISA (Korea Internet & Security Agency) in May 2021

•

Conducted phishing training for employees on a quarterly basis

•

Distributed a monthly security newsletter to all employees and

conducted the Code of Conduct campaign

•

Conducted annual online security training for employees, as well as

ransomware response training whenever necessary

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1. Introduction

Those who successfully completed the race received eco-mileage to

purchase eco-friendly products, while Hyundai used the participation fee for

the “Contactless Race” to recycle wastes from automobile seats and tires.

Going forward, we will expand customer participation-based eco-friendly

campaigns with a particular focus on environmental issues including fine

dust reduction, zero waste, and resource circulation.

Ethical Marketing and Product Labeling

In principle, in the process of marketing and communication, Hyundai aims

to provide accurate and correct information; to prohibit false, exaggerated

and reduced information on environmental and social impacts of products

and services; to convey information considering those who are vulnerable

to recognition and acquisition of information; to restrict the delivery of

information that deliberately distorts or attacks our competitors or their

products and services in the same industry. We comply with relevant

laws and regulations related to advertisement review when establishing

marketing and public relations strategies for various countries through

preliminary reviews and locals’ feedback about their unique ethical, social,

and cultural norms. In addition, Hyundai labels information on the safety,

quality and environmental impact of its products in order to fully satisfy

customers’ right to know.

Response to Data Regulations

In 2020, Hyundai established a direction for improving its data-related

company-wide management measures in line with the increasingly strict

regulations following the amendment of the three acts related to data

protection. In accordance with this improvement direction, we created

a dedicated team for data protection, which has implemented plans to

figure out the company’s data management status and improve the various

processes as part of our systematic and proactive response to the stricter

regulations.

Cybersecurity Scheme

Hyundai complies with the information protection laws and regulations. We

have established a cybersecurity system to protect our trade secrets and the

nation’s core technologies, launched dedicated security organizations, and

appointed the Chief Information Security Officer (CISO), who refrains from

holding concurrent positions in accordance with the Act on the Promotion

of Information and Communications Network Utilization and Information

Protection. To prevent cyber-security incidents, we post security regulations

on groupware and review them once a year, while offering various training

and education courses and conducting campaigns.

Organization of Hyundai’s Information Security Center

Leader of Information Security Team

Head of Hyundai Information Security Center (CISO, CPO)

Head of Management Support Division

CEO (Inside Director)

Leader of Security Compliance Team

Analysis of Cyber Asset Vulnerability

In order to improve the vulnerability of its cyber assets, Hyundai runs a

security review process and checks the infrastructure, sources, mock

hacking, etc. prior to system launch, while improving its inspection standards

in order to address system vulnerabilities in new and current operating

systems as well as DevOps environments, which are constantly being

developed. We also regularly inspect personal information and core data

handling system and take security measures against any vulnerabilities that

are detected, in addition to conducting developer training on upgraded

application security guidelines twice per year. Moreover, all domestic

business sites have been remaining certified since they first acquired the ISO

27001 certification in 2006. Overseas business sites are seeking certification

according to the standards of their respective country.

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1. Introduction

Security

strategies

• Setting the mid- to long-

term security strategies

• Validating the next-

generation security

architecture.

• Enacting and amending

security policies

• Raising security

awareness and providing

education

S/W

development security

• Planning and running

the S/W development

environment security

• Reviewing the ICT

system security

• Source code security

guide and inspection

Personal information

protection planning

•

Setting and enforcing

the personal information

protection regulations

•

Responding to external

inspections related to

personal information

•

Activities for protecting

the rights of data

subjects

•

Assessment of personal

information impact

Personal information

protection management

• Inspecting the usage of

the personal information

processing system

• Monitoring the misuse

and abuse of personal

information

• Setting personal

information processing

system policies

• Consignee training and

assessment

• Employee training, self-

inspections, campaigns

Core technology

security

• Setting the core

technology security

policies

• Implementing and

optimizing the core

technology security

system

• Operating the Core

Technology Protection

Council

• Running the National

Core Technology Export

Deliberation Committee

Security

technology

• Standardizing and

improving the security

system

• Security system

operation and efficiency

• Security planning for the

ICT/production plant

infrastructure

• Support for setting the

security systems of

overseas subsidiaries

Security

analysis

• Anomalies detection and

advancement

• Simulated hacking and

response to infringement

incidents

• Establishing the analysis

systems of overseas

subsidiaries

CSV Strategy System

CSV Initiative

Hyundai aims to expand its positive social impact and build a sustainable

corporate ecosystem by creating shared value (CSV). To this end,

we launched the “Hyundai Continue” initiative which represents our

commitment to the sustainable future. We will grow together with local

communities by creating social value and solving social problems in

connection with mobility business. We will also continue our efforts to

promote harmonious coexistence with the planet, provide freedom in

mobility and connections, and deliver hope for future generations.

Moving forward, Hyundai will strive to create a virtuous cycle of

connection by thinking and working together with various global partners

as well as our employees, customers, and local communities.

Social Contribution

Progress for Humanity

Brand Vision

Scaling social impacts and building a sustainable business eco-system by creating shared values

CSV Mission

CSV Initiative

Core Areas

Direction

earth

Continue to Take Care

of the Planet

Ecosystem restoration,

resource circulation, climate change response,

biodiversity conservation

Provide solutions for individuals and sectors with limited

mobility or who live in isolated regions, support for traffic safety

technology, activities aligned with future mobility

Education for future generations,

support for growth,

talent development

mobility

Continue to Innovate

for a New Mobility

hope

Continue to Create Hope

for Future Generations

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1. Introduction

Earth

Marine Ecosystem Restoration and Upcycling

Commemorating World Oceans Day, Hyundai Motor Europe carried out

marine plastic and waste net collection activities to help restore the marine

ecosystem. In Ithaca, Greece, Hyundai worked with its partner Healthy Seas

to support marine cleanup and waste net collection, as well as providing the

eco-friendly Kona EVs to the European sustainability tour hosted by DAN, a

non-profit organization, to help divers move safely.

In partnership with Healthy Seas, we continue working to restore marine

ecosystems by collecting the multitude of discarded fishing nets that

pollute the world’s oceans as part of our efforts to tackle plastic pollution.

We launched the project in 2021, and collected 78 tons of waste nets in

seven European countries – Germany, UK, France, Italy, Spain, Greece,

the Netherlands – together with 72 divers. In addition to collecting waste

nets, we produce textile products from recycled marine waste as part of

eco-friendly upcycling and resource circulation activities. The waste nets

are regenerated into a nylon fiber called ECONYL® by the textile producer

Aquafil. ECONYL®, a material that is used in diverse products such as socks,

swimwear, sportswear, and carpets, is also used as a floor mat material for

IONIQ 5 sold in Europe.

IONIQ Forest Sinsido

For five years from 2016, Hyundai joined forces with Tree Planet to plant

23,250 trees on landfill site in the Incheon metropolitan area in a bid

reduce fine dust there. The trees in the “IONIQ Forest” are estimated to absorb

225 tons of carbon dioxide and 1,100 kg of fine dust per year. In two years since

2019, we also carried out a project to reduce fine dust in classrooms by creating

forests at 924 classrooms in 33 elementary schools in the metropolitan area as

a means of environmental education for the next generation.

In 2021, Hyundai launched a project to preserve biodiversity in the National

Sinsido Recreation Forest in Gunsan, Jeollabuk-do. As part of the project,

we built a forest path designed to preserve native plants in the national

recreation forest and provided a number of IONIQ 5 to allow visitors to enjoy

a first-hand experience of an eco-friendly vehicle.

In partnership with Tree Planet, Hyundai has planted 3,400 trees including

young trees all over the island and camellia trees along the path to the

solar observatory in the recreation forest. We have also made it possible

for disabled and elderly persons to experience the eco-friendly mobility

of IONIQ 5 on a 4.2 km loop along with a special tour guide for them. In

addition, we conduct volunteer activities, such as tree planting and beach

plogging, together with the local community.

Hyundai x Healthy Seas | The Journey To Ithaca

European Marine Ecosystem Restoration and Upcycling

2 Hyundai Green Zone in China

3 Hyundai Green Zone in China

CSV Activities

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1. Introduction

In 2022, while continuing to operate the IONIQ Forest Sinsido project,

Hyundai plans to participate in various eco-friendly activities related with

forests and trees in collaboration with diverse partners.

Restoring the Natural Environment and Building Biogas

Facilities in India

Since September 2020, Hyundai Motor India (HMI) has been striving

to restore the natural environment around its Chennai Plant and create

employment opportunities. In the Hyundai Greenery Belt near the Plant

located in the SIPCOT Industrial Park in Irungattukottai, HMI has raised 5,200

indigenous trees and vegetation while planting 5,000 seedlings to preserve

biodiversity around the local community. Also, by selling the fruit grown

on these fruit trees, the local community benefits from Hyundai’s efforts in

terms of job creation and income generation.

Furthermore, HMI recycled some of the waste (approximately 40 tons) from

its plant and offices to make 1,500 desks and benches and donated them

to 25 nearby schools. In 2022, it is building a waste-to-energy recycling

facility with Saahas, a local waste treatment NGO, to respond to the local

government’s eco-friendly CSR policy and share biogas generated from

waste with the local community.

Hyundai Green Zone in China

The Hyundai Green Zone is a global ecological project to restore dry alkaline

(salt) lakes in Inner Mongolia, the source of China’s yellow dust clouds, to

grassland. In 2021, Hyundai kicked off the 3

phase of the Hyundai Green

Zone project in cooperation with the China Green Foundation, which

aims to restore a desertified lake and 670,000 square meters of degraded

grasslands in Caiyojungchi and Uranchapu City, Inner Mongolia. With the 3rd

project, Hyundai plans to conduct research aimed at measuring the carbon

absorption of grasslands while carrying out a public forest creation project.

Together with the China Foundation for Poverty Alleviation, we are also

planning to create “zero-carbon lodging villages” to increase the income of

nearby low-income villages.

We carried out the first phase (2008-2013) of the Hyundai Green Zone project

the Chakanor and Apakachi regions of Inner Mongolia. In the second phase

(2014-2020), we created grasslands in the Zhenglan Qi, Baoshaodainao Nur, and

Haginor regions of Inner Mongolia, and transferred the ecological restoration

technology required to prevent desertification to the local government.

IONIQ Forest Sinsido

The Hyundai Green Zone project has involved the participation not only

of our employees but also of customers and university student volunteer

groups. In recognition of such contributions to Chinese society, Hyundai was

ranked first in the automotive industry for the sixth consecutive year in the

“2021 CSR Development Index Evaluation” of the CSR Research Center of

the Chinese Academy of Social Sciences. In the overall corporate rankings,

we ranked third, up one place from last year.

Longest Run

The Longest Run is an on- and offline-linked eco-friendly social contribution

campaign launched by Hyundai in 2016 to reduce fine dust. By 2020, some

100,000 eco-runners had participated in the creation of the IONIQ Forest

at a landfill site in the Incheon metropolitan area. As interest in climate and

environmental change has increased in recent years, the Longest Run has

gone one step further from reducing fine dust to “carbon neutral practices.”

Even amid the COVID-19 crisis, we have continued to provide people with

opportunities to participate in environmental protection and improve their

personal health through the “contactless run” based on dedicated applications.

In 2021, Hyundai reinforced eco-friendly elements by recycling clothes

donated by participants into running T-shirts and making commemorative

medals with soap, while the “Eco Mileage Shop” offered the participants

various eco-friendly gifts with the mileage they accumulated when running

and completing various eco-friendly missions. The Longest Run will continue

working for a clean environment together with customers as a genuine eco-

friendly movement.

Environmental Preservation Near Business Sites

Hyundai has been carrying out a variety of eco-friendly CSV activities

designed to minimize the impact of its production activities on the

surrounding environment of its business sites while also strengthening ties

with local communities. The Ulsan Plant aims to preserve the surrounding

biodiversity by participating in the Ulsan-type migratory bird management

platform building project to protect the endangered long-billed plover and

the eagle (a natural monument). Meanwhile, the Asan Plant planted 3,300

azaleas in the Yeonginsan Arboretum; the Jeonju Plant provided seedlings

and fertilizers to nearby schools so that they could create green curtains on

campus, as well as offering them eco-friendly education using plants; and

the Namyang R&D Center planted 50 cypress and maple trees in Mado-

myeon, Hwaseong-si as part of the Gyeonggi Provincial government’s

project to reduce fine dust emissions.

Virtual Driving Simulators for Driving Rehabilitation Support

Since February 2019, Hyundai has been running a virtual reality driving

experience social contribution program designed to help drivers overcome

their fear of driving and build their self-confidence. The driving simulators

used in the program are designed to enable driving practice in various

environments and situations including city centers, highways, national roads,

and alleyways. Since 2021, in cooperation with the National Rehabilitation

Center, the company has used the simulators in the rehabilitation of traffic

accident patients. In the first half of 2022, Hyundai signed agreements with

Chungnam National University Hospital and Pusan National University

Hospital to include them in the program. We will continue to help drivers

who experience fear and difficulty through virtual driving experiences that

enable them to drive again and improve their mobility.

Supporting Underprivileged Regions Using Mobility

in the Middle East

Hyundai carried out food bank support activities using its mobility to reduce

the gap between rich and poor and support marginalized regions in the

Middle East. From March to April 2022, in five cities in the UAE and Saudi

Arabia (Ajman, Sharjah, Riyadh, Jeddah, Dammam), We joined forces with local

food banks and universities to STARIA and supply food materials, including

nutrition kits, to people in underprivileged areas with low accessibility.

In particular, during Ramadan, practicing coexistence and sharing, we

donated STARIA to NGOs for each city to help them improve the mobility

required for their activities, as a way to solve such problems as income

inequality and food insecurity. In collaboration with four universities and

volunteer organizations in each region, Hyundai carried out a variety of

community services including packaging and transporting 2,000 boxes of

donated foods and goods, sharing the importance of social responsibility

with local communities.

Shucle

In 2021, Hyundai launched the “Shucle” service in Eunpyeong, Seoul and

Sejong City to make the short-distance everyday trips of local residents safer and

more convenient. As of April 2022, 340,483 residents have used this innovative

community mobility service, enabling them to experience the

convenience of a

new transportation mode and left positive reviews of the service.

In December 2021, we started providing the service in Paju through the

Gyeonggi-do Demand Responsive Transit (DRT) pilot project. By providing

a service similar to public transportation, rather than the existing form of

community mobility, Shucle was able to get closer to the public. Going

forward, Shucle’s DRT service will be expanded to the entire Gyeonggi-do

province, particularly to people with limited mobility such as the elderly and

the disabled, so that more people can move around more conveniently.

Wheel Share

The Wheel Share program provides electric wheelchair conversion kits free

of charge for a short period of time to disabled people so that they can travel

freely with their families. The kits are available at transportation hubs, mega

cities such as Seoul and Busan, and the three largest airports in Gimpo,

Gimhae and Jeju.

In 2021, in cooperation with the Gyeongbuk Culture and Tourism Corporation,

Hyundai opened a new Wheel Share rental office in Gyeongju, one of the

major tourist destinations in Korea, as well as launching a caretaker-operated

kit to strengthen its support for the elderly and vulnerable on the road. Under

the banner of “breaking down the barriers to travel”, we plan to continue our

efforts to revitalize travel for people with disabilities and produce videos to raise

awareness of barrier-free travel for all. During the four-year period from 2018 to

2021, a total of 2,983 people with disabilities used the Wheel Share service.

H-Special Movement Project

The H-Special Movement project offers eco-friendly school buses to special

needs schools. Hyundai selected three special needs schools in Seoul

and donated a STARIA van customized for the disabled, thereby ensuring

students’ safe commuting to school and providing customized solutions

to those with limited mobility. We also provide a vehicle safety inspection

service for schools that have applied for the special vehicle care service.

Going forward, we will explore various ways to make commuting to school

more convenient for a larger number of schoolchildren.

Dental Trailer Sorriso Cidadang in Brazil

Since 2014, Hyundai Motor Brasil has been conducting social contribution

activities using a mobile dental treatment trailer named “Sorriso Cidadang”

(meaning citizen’s smile) in collaboration with the Piracicaba Metal Workers

Union (STMP). In 2021, due to the closure of schools during the COVID-19

crisis, the dental service cared for 1,789 firefighters and police officers in

Piracicaba. As of 2021, a total of 59,308 people had benefited from the service.

Drive-in MOVING THEATER

Since 2015, Hyundai, in collaboration with Hyundai Motor Club, has been

conducting the “Moving Theater” campaign to visit culturally underprivileged

areas, install movable screens, and screen movies. In 2020, we switched the

service to a drive-in MOVING THEATER amid the COVID-19 pandemic in

order to allow residents to continue enjoying their cultural life during difficult

times. We invited local residents as well as the underprivileged to screenings

of the latest movies while offering them free snacks prepared and packaged

by volunteers. In 2020, we opened a MOVING THEATER in Seongnam in

conjunction with a local welfare center. In 2021, in partnership with Jangsu-

gun, Yeongyang-gun, and Yeongdeok-gun district offices, we provided

local residents in culturally underprivileged areas with an opportunity to

experience the MOVING THEATER.

Supporting Underprivileged Regions Using Mobility in the Middle East

2 Breaking Down the Barriers of the Disabled to Trave l<Wheel Share>

3 Drive-in MOVING THEATER

Mobility

Hyundai Motor Group’s Wheel Share –

Breaking Down the Barriers of the Disabled to Travel

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1. Introduction

Hyundai Hope on Wheels in North America

Since 1998, Hyundai Motor America’s sales subsidiary has been running the

Hope on Wheels campaign together with its dealerships. The campaign,

which supports childhood cancer research, was started to create a happy

future in which children no longer suffer from cancer. The campaign has

expanded across the United States, raising USD 185 million (approximately

KRW 226.5 billion) in cumulative donations as of the end of 2021.

Hyundai Help for Kids in Australia

Help for Kids is an activity in which Hyundai Motor Company Australia

(HMCA) joins hands with its dealers to help children and their families in

Australia with donations made at the time of car sales. HMCA not only

donates cash to support their livelihood but also subsidizes their vehicle

purchases as well as offering them necessary education along with its

support and collaboration with a total of ten charities, including Ronald

McDonald House Charities Australia. The donations raised for Help for Kids

from 2014 to 2020 exceeded USD 10 million. Hyundai will continue to carry

out various “Hope” activities to promote the growth of future generations.

H-Mobility Class

Since 2020 Hyundai has been operating the H-Mobility Class to nurture

science and engineering college (graduate) students in Korea into future

talents, with the ultimate goal of enhancing national competitiveness. The

H-Mobility Class program is designed to promote understanding of future

technologies, such as vehicle electrification and autonomous driving, and to

foster professional human resources, while providing intensive training and

employment benefits (including exemption from candidate screening) to

outstanding students.

In 2021, Hyundai offered 1,550 students a series of courses in various fields

associated with vehicle electrification, such as fuel cells, batteries, power

conversion, and motor technology, as well as those with autonomous

driving, such as cognition, judgment, control, communication and network

technology. In 2022, we plan to expand the courses to include robotics such

as kinematics, control, sensors, estimation, and robot joint angles.

1 Future Mobility School

2 Vision Drive

3 Kid’s Auto Park

Hope

Traffic Safety Song with Poli

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1. Introduction

Future Mobility Schoo

Hyundai signed an MOU with the Ministry of Education to launch the

Future Mobility School in 2016. It is a free-semester middle school providing

specialized career education based on theory, practice and experience, with

the aim of allowing young people to understand the automobile industry

and explore the related occupations. In 2018, we reorganized the curriculum

with the focus on hydrogen energy and eco-friendly future cities, which

are essential for a deeper understanding of the future automobile industry.

The Future Mobility School prioritizes admissions from students from rural

schools, special needs schools, and small schools in order to help resolve

inequality in career education opportunities. In 2022, the School included a

creative experiential learning course for elementary school students in its

curriculum and began to teach technical content on the subject of clean

mobility and sustainability in an easy and fun way at children’s level.

Vision Drive

Hyundai’s Namyang R&D Center runs Vision Drive to support career

planning for future generations. Vision Drive consists of vision mentoring

by employees, while the Vision Festival is held with the participation of

celebrities.

The vision mentoring program provides students with opportunities to

explore career paths in the automobile industry while attending lectures

on automobile history, technology, and future mobility given by Hyundai

employees. In 2021, 2,257 sixth graders from 27 elementary schools took

part in the program in western Hwaseong. The Vision Festival features

career lectures of celebrities from various fields and an opportunity to meet

and speak with the celebrities. In 2021, the festival included a lecture by a

renowned YouTuber Dotty and broadcast it live so that many more students

could watch.

Hyundai Dream Center

Hyundai has been operating the “Hyundai Dream Center” since 2013 with

the goal of helping educated young people in developing countries to

achieve economic independence by providing them with professional

automobile maintenance education and internships for competency

development. Starting with “Hyundai Dream Center No. 1” in Ghana in 2013,

Hyundai is now running a total of seven dream centers in Ghana, Indonesia,

Cambodia, Vietnam, the Philippines, Peru and Kenya, with the latest center in

Kenya launched in 2021. As of 2022, the Hyundai Dream Center has educated

1,975 people, produced 1,309 graduates, among them 726 found jobs,

thereby creating social value by nurturing skilled automobile professionals

and creating jobs in developing countries.

Safe Road Traffic Project in Russia

Since 2017, Hyundai has been operating the “Safe Road Traffic Project”, in

which children learn about traffic safety, in collaboration with Russia’s Main

Directorate for Traffic Safety and the Ministry of Education of the Russian

Federation. In 2021, we offered education to 16,700 children, 16,900 parents,

165 daycare centers, and 14,500 teachers. We also launched an online game

simulator program to deliver online courses in more intriguing and safer ways.

Kid’s Auto Park

In 2009, Hyundai established a Kid’s Auto Park in Seoul, followed ten years

later by the largest children’s traffic experience center in Ulsan. At various

educational facilities including a virtual auto experience hall, a license test

center, and an auto booth, Hyundai provides programs tailored to children's

eye level, such as a mini-motorcar driving experience, pedestrian safety

information, and stereoscopic images promoting road safety. In 2021, a

total of 8,841 children (cumulative total of 178,976 children) visited the park,

which plays a key role in preventing child traffic accidents and raising safety

awareness in society.

Traffic Safety Song with Robocar Poli

In 2011, Hyundai produced an educational animation entitled Traffic Safety

Story with Poli, which included information on getting on and off vehicles,

safety in blind spots, pedestrian safety, bicycle safety, and traffic lights, and

has since aired it in 82 countries. In 2021, we produced a traffic safety musical

animation entitled “Traffic Safety Song with Poli”, thereby introducing new

traffic safety issues such as the use of car seats to the existing curriculum,

which includes the wearing of seat belts. We will continue to help children to

acquire road safety knowledge by watching fun and easy-to-follow musical

animations anytime, anywhere.

Sponsoring the Korea Archery Association

Since 1985, Hyundai has been sponsoring the Korea Archery Association,

sparing no expense in providing financial support for the stable operation

of the association, as well as rewarding the national archery team for its

outstanding results in international competitions. The company has used

the technological capabilities of its research institute to develop a shooting

machine that sorts out bad arrows, and applied a precision analysis

technology to identify abnormal or defective parts, enabling the national

squad to achieve a very high level of skill and continue beating their personal

records. We also sponsor a number of leading archery tournaments,

including the Archery World Cup and the World Archery Championships. In

2021, we delivered rewards to the national archery team in recognition of its

outstanding results at the Tokyo Olympics.

1 Employee Volunteer Corps

2 H-Local Partner

3 Volunteer Service

Employee Volunteer Corps

Hyundai boasts 143 employee volunteer groups striving for win-win growth

with local communities by serving in various H-affiliated facilities around

the country. In 2021, they were unable to conduct many face-to-face

volunteer activities due to COVID-19, yet they continued to make meaningful

contributions to Hyundai’s local communities, such as purchasing

agricultural products from the areas concerned and delivering gift vouchers

and cash donations to the facilities. For example, volunteers at the Ulsan

Plant conducted various volunteer activities such as painting, balloon art,

hand and foot massage, and talent donation in partnership with local social

welfare facilities. Meanwhile, employees from the Asan Plant shared the

difficulties of local residents through continuous communication and helped

elderly people living alone or raising grandchildren in rural areas through

various programs, including the delivery of goods and donations during

national holidays. Hyundai and its employee volunteers will continue sharing

with those in need.

H-Local Partner

In 2018, the labor and management of Hyundai’s Ulsan Plant signed an

MOU with the Buk-gu District Office of Ulsan City to provide customized

assistance to people in welfare blind spots in collaboration with members of

the city’s Buk-gu community. In 2021, they carried out a variety of activities

that reflected the needs of each neighborhood, such as holding birthday

parties for elderly people living alone and providing gift packages to children

from low-income households. In addition, they delivered 2,000 samgyetang

(ginseng chicken soup) lunchboxes along with messages of support to senior

citizens at local senior centers and people working in COVID-19 vaccination

centers. In winter, they donated daily necessities such as rice, electric rice

cookers, and hot water mats to 32 low-income families, kimchi refrigerators to

10 local children's centers, and kimchi to 350 low-income seniors.

Volunteer Service HYU(

休

)

Amid the difficulties with the face-to-face volunteer service caused by

the COVID-19 pandemic, Hyundai conducted various non-face-to-face

volunteer activities with its employees. One such activity was “eco-friendly

plogging”, in which approximately 500 employees participated with their

families at the company’s domestic business sites to reduce 1.2 tons of GHG

emissions and donate as many seedlings as the number of participants. In

addition, Hyundai employees conducted a “kit production service” in which

they could cooperate with their families at home in making upcycled dolls

using recycled cotton wool and donate them to local children's centers and

facilities for children with disabilities. In 2022, we plan to promote activities

that allow our employees to participate more actively in line with the easing

of the COVID-19 restrictions.

Community

ESG Magazine

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3. Social

4. Governance

5. ESG Factbook

1. Introduction

Hyundai supports a wide range of exhibitions and programs in partnership

with art institutions around the globe to offer a greater number of audiences

the opportunity to enjoy and experience art.

National Museum of Modern and Contemporary Art, Korea

(MMCA)

In partnership with the National Museum of Modern and Contemporary

Art, Korea (MMCA), Hyundai has been holding the “MMCA Hyundai Motor

Series” since 2014 to expand the boundaries of Korean art. Every year,

Hyundai supports a large-scale solo exhibition of an esteemed Korean

artist as well as a related seminar and publication activities. In 2021, the

MMCA Hyundai Motor Series 2021: MOON Kyungwon & JEON Joonho –

NEWS FROM NOWHERE, FREEDOM VILLAGE exhibition was held. As part

of the exhibition, the “Mobile Agora” talk program was also held to discuss

contemporary crises, future alternatives and the role of art after disasters

with experts in different fields from around the world.

Hyundai has also been supporting “PROJECT #” since 2019 to discover next-

generation creators in Korea and support their experimental and creative

activities. Two teams are chosen every year to be provided with a grant of

KRW 30 million, a studio, and exhibition opportunities. Through the PROJECT

HASHTAG 2021, two selected teams exhibited artworks reflecting concerns

of Gen Z and millennials regarding online experiences and environments

that were heavily influencing and rapidly reshaping human values in the

post-pandemic era.

Tate

The Hyundai Commission is a series of site-specific installations by

international artists for the Turbine Hall, at the heart of Tate Modern. In 2021,

“Hyundai Commission: Anicka Yi” populated the Turbine Hall with machines,

transforming the space with the artist’s vision of a new kind of ecosystem.

Moving through the air, the floating machines prompted audiences to think

about new possibilities for machines and our futures.

The Hyundai Tate Research Centre: Transnational, established in 2019,

continues to encourage new perspectives on global art histories and critical

research to highlight global exchanges of artists and ideas. Including an

annual symposium, the Hyundai Tate Research Centre: Transnational hosts

research events, both offline and online, to facilitate collective research and

intellectual exchange.

Los Angeles County Museum of Art (LACMA)

Hyundai began a ten-year partnership with the Los Angeles County Museum

of Art (LACMA) in 2015, “The Hyundai Project at LACMA.” The most recent

project as part of this initiative Barbara Kruger: Thinking of You

. I Mean Me

I Mean You, opened in March 2022. As the artist’s most comprehensive

exhibition in more than 20 years, it showcases reinterpretations of her most

renowned works from the 1980s to 1990s by combining new technologies,

and also has significance in that it features a variety of new public art works

outside the museum, one of which is Untitled (Car) in collaboration with

Hyundai’s IONIQ 5.

LACMA’s presentation of exhibitions that highlight the convergence of

art and technology as well as the Art + Technology Lab are core to the

partnership that brings art and technology together. Through the Art +

Technology Lab, artists had been given grants for cutting edge projects

while melding art and technology in unique ways. Some of these worked on

projects that incorporated rapidly-growing technologies such as blockchain,

metaverse platforms, and NFTs, including the “Rocket Factory” NFT

collection by Tom Sachs. Participating artists are receiving technical advice

from Hyundai, Google, SpaceX, and Snapchat, which provides support for

realizing their ideas into artworks.

Barbara Kruger,

Untitled,

2020, digital print on vinyl, courtesy of the artist and Hyundai Motor

Company, installed as a part of

Barbara Kruger: Thinking of You

I Mean Me

. I Mean You., Los Angeles

Hyundai Commission: Anicka Yi: In Love With The World

Fisher Photography)

MOON Kyungwon & JEON Joonho, NEWS FROM NOWHERE: FREEDOM VILLAGE, 2021, 2 channel

HD film installation, color, sound, 14min 35 sec. Courtesy of the artist. Photograph by LEE JINCHUL,

Image provided by MMCA

Global Partnership for Arts and Culture

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Governance

Sound and transparent management based on trust

with stakeholders is the foundation and driving force of

sustainable growth. Equipped with an advanced governance

structure centered on its BOD, Hyundai is striving to increase

its corporate value from a long-term perspective. We also do

our utmost that our corporate growth can lead to enhance

value of our shareholders and other stakeholders. Cherishing

ethical values as the essence of our corporate culture and

competitive advantage, we are building sound and solid

growth momentum by turning risks into opportunities.

4.1

Board-centered Management System

4.2

Business Ethics & Compliance

4.3

Risk Management

ESG Magazine

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4. Governance

5. ESG Factbook

1. Introduction

Composition of the BOD

Hyundai’s BOD is composed of 11 members in consideration of the need for

the efficient operation and decision-making by the BOD, with independent

directors making up more than half of members in order to maintain its

independence. The BOD has expertise in a wide variety of fields including

management, law, accounting, finance, and future technology, and respects

diversity without discrimination on the grounds of gender, race, religion etc.

Director Tenure

As of the end of March 2022, the average tenure of the 11 board members

is three years. In accordance with the Commercial Act, the term of office

of independent directors cannot exceed six years. Those appointed in

March 2022 include three internal directors (one re-appointed, two newly

appointed) and three non-executive directors (all re-appointed).

Appointment of Directors

Individual Item of Agenda for the Appointment of Directors at GSM

All directors of Hyundai are appointed at a general shareholder’s meeting (GSM)

among the candidates recommended by the Recommendation Committee

on Candidates for Non-executive Directors. Candidates recommended by the

Committee are selected as final candidates through the deliberation process

of the BOD before being presented as an individual item of agenda at a general

shareholders' meeting and appointed as non-executive directors.

Process of Director Candidate Selection (Recommendation)

Composition of the BOD

Hyundai aims to establish a transparent and sound governance structure. To this end, based on a deep understanding of

its diverse stakeholders, including shareholders and customers, Hyundai appoints directors with diversity, expertise and

independence, and strives to maximize shareholders’ rights and interests as well as corporate value. As Hyundai’s highest

decision-making body, the BOD pursues the goal of sustainable and balanced growth while faithfully performing the

function of checks and balances by supervising the activities of directors and management. We have been building a better

governance system by appointing independent directors equipped with independence, diversity, and expertise in their

respective fields.

Board-centered Management System

BOD Composition

Classifi-

cation

Name

Title

Career

Date of

Appointment

Gender

Nation-

ality

Euisun

Chung

Executive

Chair

Currently Executive

Chairman of Hyundai

Motor Group

March 12,

2010

Male

Korea

Jae

Hoon

Chang

President

& CEO

Currently President &

CEO of HMC, President

of Genesis Division

March 24,

2021

Male

Korea

Dong

Seock

Lee

Vice

President

& CEO

Currently Executive

Vice President and

CSO of Domestic

Productions

March 24,

2022

Male

Korea

Chung

Kook

Park

Executive

President

Currently President and

Head of

HMC R&D Division

March 24,

2022

Male

Korea

Gang

Hyun

Seo

Executive

Vice

President

Currently Executive

Vice President of

HMC Planning &

Finance Division

March 24,

2022

Male

Korea

Eun

Soo

Choi

Indepen-

dent

Director

Currently General

Counsel of The Kim

Law Firm

Former President of

Daejeon High Court

and Patent Court

March 17,

2017

Male

Korea

Chi-

Won

Yoon

Indepen-

dent

Director

Currently Chairman of

EQONEX

Former Vice Chairman

of UBS Wealth

Management

March 22,

2019

Male

Korea

Eugene

M. Ohr

Indepen-

dent

Director

Former Partner of

Capital International

Inc.

March 22,

2019

Male

Korea

Sang-

Seung

Indepen-

dent

Director

Currently Professor

of Economics, Seoul

National University

Former Chairman,

Korea Academic

Society of Industrial

Organization

March 22,

2019

Male

Korea

Dal

Hoon

Shim

Indepen-

dent

Director

Currently

Representative of

Woorin Tax Partners

Former Head of NTS

Jungbu Regional Office

March 24,

2021

Male

Korea

Yun

Lee

Indepen-

dent

Director

Currently Assistant

Professor, Department

of Aerospace

Engineering of KAIST

Former Director of

American Society of

Navigation

March 24,

2021

Female

Korea

* As of June 1, 2022

Independent director Chi-Won Yoon was recommended as a preliminary

candidate after undergoing an independent evaluation by the shareholder

recommendation system. Following a fair evaluation by the external

evaluation advisory group, he was recommended by the Recommendation

Committee on Candidates for Non-executive Directors for deliberation

by the BOD, before being proposed as a final candidate. He was initially

appointed at the 51st GSM and was re-appointed at the 54th GSM.

Diversity and Expertise of the BOD

Hyundai respects the principle of diversity of gender, nationality, race,

etc. when forming a BOD. To this end, we appoint directors who possess

expertise in a variety of fields, such as global business, academia, R&D,

finance, and future-based technologies.

As of March 2022, the Board has one foreign director (Eugene M. Ohr)

and one female director (Ji Yun Lee). Director Eugene M. Ohr is an expert

in global business and helps enhance the company’s management

transparency, while Director Ji Yun Lee is currently an associate professor

at the Department of Aerospace Engineering of KAIST and a director of the

Institute of Positioning, Navigation and Timing (2016-present), and has also

served as a director of the American Institute of Navigation (2019-2021). She

is a world-recognized authority on the safety of intelligent transportation and

autonomous driving systems; and plays a central role at Hyundai, where she

advises on autonomous driving, a future core technology of the automotive

industry, and mid- to long-term business planning for urban air mobility

(UAM) which will become a future mobility innovation.

To enhance the overall professionalism of the Board, Hyundai provides

training on various topics for independent directors, including training on

ESG and climate risks in 2021.

Independent Director Training in 2021

Dates

Participating Directors

Major Topics

Apr. 22

Eun Soo Choi, Chi-Won Yoon,

Eugene M. Ohr, Sang-Seung Yi,

Dal Hoon Shim, Ji Yun Lee

Hyundai Motor Group’s

CSR activities, future plans, etc.

Sep.16

Eun Soo Choi, Chi-Won Yoon,

Eugene M. Ohr, Sang-Seung Yi,

Dal Hoon Shim, Ji Yun Lee

ESG, climate change status and

related risks, countermeasures, etc.

Independence of Non-executive Directors and

Restrictions on Concurrent Positions

Hyundai has put in place strict independence guidelines, meeting the legal

standards required by the Korean Commercial Act, based on the international

standards. Independent directors must not only comply with them, but also

represent the rights and interests of stakeholders with exemplary ethics

and professionalism. Hyundai therefore only appoints persons with no

significant stake in the company as independent directors, and they maintain

independency from top management, monitor the efficient operation of the

company, and play a role in enhancing corporate value. In accordance with

Hyundai’s regulations on the operation of the BOD, its independent directors

must devote sufficient time and effort to fulfilling their responsibilities. In

addition, according to the Commercial Act, they are prohibited from serving

as directors, executive officers, and/or auditors for two or more companies

other than the company itself. When concurrently serving as a director of

another company, they must report the details of the duties they wish to hold

concurrently to the Board in advance and obtain its approval.

Name

Date of Initial

Appointment

Date of Term

Expiration

Concurrent

Positions

Details of

Concurrent Positions

(institution / position)

Eun Soo Choi

Mar. 17, 2017

Mar. 18, 2023

N/A

Chi-Won

Yoon

Mar. 22, 2019

Mar. 23, 2025

Yes

EQONEX / Chairman

Eugene M.

Ohr

Mar. 22, 2019

Mar. 23, 2025

N/A

Sang-Seung

Mar. 22, 2019

Mar. 23, 2025

Yes

Samsung C&T /

Independent Director

Dal Hoon

Shim

Mar. 24, 2021

Mar. 23, 2024

Yes

Samhwa Paints Industrial /

Independent Director

Ji Yun Lee

Mar. 24, 2021

Mar. 23, 2024

N/A

Deliberation by the BOD

Key items to review

• Potential damage to corporate value or infringements of

shareholders’ rights

• Reasons for disqualification under the Commercial Act (history

of employment

with Hyundai /affiliate companies, etc.)

Proposal of an

agenda item to

the GSM for the

final candidate

Recommendation

Committee on Candidates for

Non-executive Directors

Shareholder-friendly System

(Non-executive director

responsible for protecting the

rights of shareholders)

Guidelines on the Diversity of the Board of Directors

Internal Directors

Independent Directors

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1. Introduction

BOD Operations

According to the principle that BOD meetings are held on a regular basis,

Hyundai holds the meetings once per quarter, while extraordinary meetings

may be convened as and when required in accordance with the relevant

regulations. The Board discloses details of its activities, such as whether

individual directors are present and whether they agree or disagree on

agenda items, through a regular report. With the exception of cases outlined

within the company’s rules and regulations, a BOD resolution must be

passed by a majority of the members in attendance.

BOD Activities in 2021

Number of

meetings

Number of agenda

items for resolution

Number of agenda

items for report

BOD Participation in 2021

Average

participation rate

Participation rate of

internal directors

Participation rate of

independent directors

100

BOD Evaluation

Evaluation of BOD Operations and Activities

At Hyundai, independent directors conduct an annual evaluation of BOD

operations by reviewing 30 items, including the roles and responsibilities,

structure, and operation of the Board. We reflect the opinions of the

independent directors on each evaluation item, discuss the results of

the evaluation with the BOD, and make continuous efforts to improve

the operation of the BOD. Furthermore, we have our executives evaluate

independent directors each year based on such criteria as sincerity, fairness,

and professionalism to promote their performance, with the results of the

evaluation taken into account when re-appointing independent directors.

Performance Evaluation and Compensation of Directors

and Management

The directors’ compensation must not exceed the limit approved at a GSM,

and the amount is determined following a review by the Compensation

Committee. The compensation amount for management is determined

based on the performance evaluation of their leadership, professionalism,

and contribution to the company.

CEO Compensation and Calculation Criteria

When evaluating and rewarding the CEO’s performance, Hyundai reflects

the results of financial evaluations such as sales, profit ratios, net cash

liquidity, debt ratios, and market shares, as well as the results of comparative

evaluations among peers with regard to stock prices, ESG, and brand power.

As of 2021, the CEO’s remuneration amounted to KRW 977 million, consisting

of a basic salary of KRW 694 million, bonuses of KRW 270 million, and other

wage and salary income of KRW 13 million.

Decision-making Process of the BOD

Criteria for BOD Remuneration

Classification

Payment criteria

Internal

directors

• Salary: Paid within the limit of directors’ remuneration determined by the resolution of a general shareholder’s meeting, based on

internal criteria such as Hyundai Motor Company’s executive salary table and executive wage setting standards, job title, tenure,

leadership, professionalism, contribution to the company, and human resource development, etc.

• Bonus: Paid based on the executive remuneration criteria (performance incentives) such as quantitative indicators (business

performance such as sales and operating profit and degree of achievement of business goals, etc.) and non-metric indicators

(performance and contribution as executives, internal and external business environment, etc.)

• Other earned income: Paid according to the company regulations on welfare support such as medical expenses, school expenses,

and long-term service rewards

Independent

directors

• Fixed amounts are paid to ensure their independence and transparency within the limit of remuneration for directors determined by

the resolution of a GSM, with no separate performance bonus paid.

BOD Remuneration

(Unit: KRW million)

Classification

CEO

Independent director

Board member

Employee

CEO-to-employee pay ratio

Average compensation

per person

977

102

1,339

10.22 x

* For further details, please refer to the 2021 business report published on the electronic disclosure system of the Financial Supervisory Service.

CEO: Based on remuneration for Jae Hoon Chang, President & CEO of Hyundai Motor Company

Employees: Excluding registered executives (unregistered executives and employees)

Operation of the BOD

Hyundai holds BOD and subcommittee meetings every quarter to make decisions on matters stipulated in the relevant laws and the

Articles of Association or major matters related to the company management. The meetings are also held whenever matters requiring

resolution by the Board or a subcommittee arise. A Board meeting is convened by its chair or another member appointed by the

Board. At the time of convening the Board, each director is notified of the meeting time, place, and agenda at least seven days prior to

the date of the meeting in accordance with the regulations of the Board. With the exception of cases outlined within the company’s

rules and regulations, a BOD resolution must be passed by a majority of the members in attendance. The BOD consists of a majority

of non-executive directors who fulfill the functions of monitoring and checking. By providing them with opportunities to participate in

management, Hyundai enhances the operational efficiency of the BOD. In addition, the BOD supervises critical issues directly related

to the company’s operations, such as business ethics and compliance as well as risk management.

Audit Committee

Compensation Committee

Sustainability

Management Committee

Recommendation

Committee on Candidates

for Non-executive Directors

Shareholders

BOD’s committees

BOD

CEO

Report on BOD activities

Facilitate BOD’s

efficient operations

Appointment of directors and

approval of compensation limits

GSM

Appointment of CEO

Participate in key decision-making

by exercising their voting rights

ESG Magazine

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1. Introduction

Board Activities in 2021

Classification

Date

Contents

Whether

approved

Attendance

rate

Approval

rate

1st General

Meeting

Jan. 26

Approval of financial statements for the 53rd fiscal year

Approved

100%

Approval of the 53rd annual report

Approved

100%

Approval of the business plan for 2021

Approved

100%

Appointment of Compensation Committee member

Approved

100%

Appointment of fair trade compliance program supervisor

Approved

100%

Approval of corporate bond issue limit

Approved

100%

Assessment of 2020 internal accounting management system

Activities and plan of compliance management

Reported

Extraordinary

Meeting

Feb. 23

Approval of convocation and agenda to be submitted to the 53rd GSM

Approved

100%

Results of 2020 internal accounting management system

Reported

Mar. 04

Re-approval of financial statements of the 53rd fiscal year

Approved

90%

100%

Mar. 24

Appointment of Chief Executive Officer

Approved

100%

Amendment of Rule (Rule and Regulation of BOD, Rule and Regulation of Sustainability

Management Committee, Corporate Governance Charter)

Approved

100%

Appointment of Committee member (Sustainability Management Committee, Recommendation

Committee on Candidates for Non-executive Directors, Compensation Committee)

Approved

100%

Approval of dual-directorship (Gang Hyun Seo: Hyundai Capital, Hyundai Card, Hyundai

Commercial)

Approved

100%

Approval of plan for safety and health

Approved

100%

2nd General

Meeting

Apr. 22

Guarantee of payment for overseas subsidiaries

Approved

91%

100%

Appointment of manager

Approved

100%

Business results of 1st quarter of 2021

Reported

3rd General

Meeting

Jul. 22

Approval of 54th fiscal year interim dividend payment

Approved

91%

100%

Business results of 2nd quarter of 2021

Establishing an overseas sales subsidiary

Capital Increase for overseas production subsidiary

Capital increase for overseas joint venture

Reported

Extraordinary

Meeting

Sep. 16

Approval of disposal of treasury stock

Approved

91%

100%

Conclusion of Hyundai Card shareholders’ agreement

Mid- to long-term sales production operation strategy in North America

Reported

4th General

Meeting

Oct. 26

Approval of transaction between directors, etc. and the company

Approved

100%

Business results of 3rd quarter of 2021

CKD plant review in Saudi Arabia

Reported

Extraordinary

Meeting

Nov. 18

Approval of acquisition of treasury stocks

Approved

82%

100%

ESG rating result (DJSI)

Development status of fuel cell system

Reported

Functions of the BOD

Risk Management

Hyundai’s BOD is striving to establish a flexible risk response system to

meet the rapid changes in the automobile industry and newly emerging

trends, such as autonomous driving and electrification. The Planning &

Finance Division, under the direct supervision of the company’s CEO,

analyzes risk and opportunity factors caused by changes in the internal

and external environment, diagnoses the company’s responsiveness and

competitiveness, and establishes mid- to long-term strategies and tasks.

Compliance Management

Hyundai’s BOD has established a compliance management system along

with various schemes designed to prevent legal risks. We have appointed

a compliance officer who is responsible for designating a person to take

charge of compliance at each department, and for strengthening the

compliance capabilities of its business units by producing and distributing

compliance guidelines that cover the relevant laws and the countermeasures

necessary for business performance. Furthermore, we conduct regular

self-inspections with the aim of embedding a culture of strict compliance

throughout the company.

Ethical Management

Based on its Ethics Charter, Employee Code of Conduct, and Guidelines for

Ethical Business Conduct enacted in 2001, Hyundai’s BOD encourages all of

its employees to play a leading role in ethical management and make sound

ethical judgments in all business situations. In 2021, we strengthened our

ESG management system, including ethical management, by expanding

and reorganizing the Corporate Governance & Communication Committee,

which previously had the function of the Ethics Committee, into the

Sustainability Management Committee.

Internal Accounting Management

Hyundai’s BOD has designed and launched an internal accounting

control system with the aim of providing reasonable assurance that the

company’s financial statements are prepared and disclosed in accordance

with the generally accepted accounting standards. In December 2018, in

accordance with the 2018 amendments to the Act on External Audit of Stock

Corporations, we wholly revised our internal accounting control system to

reflect changes in the Act regarding the roles and responsibilities of the CEO

and the Audit Committee in operating the system and the best practices for

the system. Following advances in our internal accounting control system

to comply with the amended law, we have been operating relevant control

activities since 2019. Our CEO evaluates the effectiveness of the internal

accounting control system every business year and reports the results to

the Audit Committee, the BOD, and the general shareholders' meeting.

Furthermore, the Audit Committee assesses the operating status of the

company's internal accounting control system on an annual basis.

Management of Climate Change

Climate change is not only a task that we must help solve for the benefit

of future generations as a member of the global community, but also an

important issue that is directly related to our business strategy/performance

due to the inherent characteristics of the automobile industry. Hyundai has

therefore formed the Sustainability Management Committee to discuss and

monitor relevant issues, and the Committee reviews the company’s mid- to

long-term strategies, including redesigning the “2025 Strategy” and “Carbon

Neutral Strategy”.

Health and Safety Management

In line with the amendment to the Occupational Health and Safety Act in

Korea, the CEO establishes a health and safety management plan, obtains

approval from the BOD, and implements responsible safety management

according to the plan. Hyundai is steadily increasing its investment in

safety devices and new safety technologies for its production facilities

while expanding the company-wide safety organization to improve safety

compliance and safety management.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Audit Committee Composition

Name

Eun Soo Choi

Chi-Won Yoon

Sang-Seung Yi

Dal Hoon Shim

Ji Yun Lee

Classification

Independent director

Date of initial appointment

Mar. 17, 2017

Mar. 22, 2019

Mar. 24, 2021

Non-audit Service Contracts with External Auditors

Business year

Date of contract

Serviced offered

Duration

Service fee (KRW million)

54th

Mar. 25, 2020

Support for renewal of the US APA

Mar. 2020 - Mar. 2022

250

Apr. 28, 2020

Review of the origin determination process for FTAs

May 2020 – Jul. 2021

Mar. 2, 2021

Refund request for the assessed local tax

Mar. 2021 – completion of task

10% of the refund amount

Apr. 12, 2021

Refund request for the paid local tax

Apr. 2021 – completion of task

10% of the refund amount

Dec. 17, 2021

Support for renewal of the APA of Czech Republic

Jan. 2022 – completion of task

180

Dec. 21, 2021

Support for renewal of the APA of Ger many

Jan. 2022 – completion of task

180

BOD Subcommittees

Hyundai has established four BOD subcommittees – the Audit Committee, the Compensation Committee, the Recommendation

Committee on Candidates for Non-executive Directors, and the Sustainability Management Committee. Each subcommittee

meets the ratio of non-executive directors to maintain independence in accordance with the Commercial Act and our internal

board regulations; and includes experts in the relevant fields according to segmented task areas and processes. The four

subcommittees under the BOD enhance professionalism and efficiency in the BOD’s work according to the purpose of their

establishment. The attendance rate and voting records of the committee members are disclosed in the business report.

Audit Committee

Composition of the Audit Committee

The Commercial Act stipulates strict criteria for securing the transparency

and independence of the Audit Committee, and thus the Audit Committee

must be composed of at least three directors appointed at a GSM, and at

least two-thirds of them should be independent directors. It should also

contain at least one member who is a specialist in accounting and finance.

All five members of Hyundai’s Audit Committee are independent directors,

with three (Chi-Won Yoon, Sang-Seung Yi, Dal Hoon Shim) of whom are

experts in accounting and finance.

In particular, Director Eun Soo Choi, a legal expert who has served as a

presiding judge at district and high courts, the chief judge of a court, and the

President of the Patent Court, and Director Dal Hoon Shim, who has long

served as a tax official, such as the Head of NTS Jungbu Regional Office,

contribute greatly to the company’s risk management by viewing things

from a different perspective to the company’s internal audit organization.

Operation of the Audit Committee

Roles and Responsibilities of the Audit Committee

The Audit Committee verifies the legality of the business activities of the

directors and management, and reviews the soundness and propriety of

Hyundai’s corporate financial activities and the accuracy of its financial

reporting. The company's internal accounting manager acts as a full-

time registered director, and a separate entity is formed to support him

in performing his duties. In 2021, all members of the Audit Committee

attended education on the topic of “The Impact of COVID-19 on the Internal

Accounting Management System and Response Strategies” in order to

enhance the professionalism and efficiency of their auditing work.

Approval of Non-audit Services

Hyundai regularly monitors the independence of its external auditors, and

only allows their non-audit services to the extent that they do not affect their

independence. We report the related details to the Audit Committee on a

quarterly basis and disclose them in quarterly reports.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Compensation Committee

Composition of the Compensation Committee

Following the amendment to the Articles of Incorporation for the

establishment of the Compensation Committee at the GSM in 2019, Hyundai

enacted the Compensation Committee regulations at the 4th general BOD

meeting. Non-executive directors constitute a majority of the members of

the Committee, with two independent directors and one internal director.

Operation of the Compensation Committee

Roles and Responsibilities of the Compensation Committee

Established to secure objectivity and transparency in the remuneration

decision process for registered directors, the Compensation Committee

deliberates and decides on the remuneration limit for registered directors

and other matters related to the remuneration system for internal directors.

Compensation Committee Composition

Name

Chi-Won Yoon

Dal Hoon Shim

Gang Hyun Seo

Classification

Independent

director

Independent

director

Internal director

Date of initial

appointment

Jul. 22, 2020

Mar. 24, 2021

Audit Committee Activities in 2021

Classification

Date

Contents

Whether

approved

Attendance

rate

Approval

rate

1st General

Meeting

Jan. 26

Approval of financial statements for the 53rd fiscal year

Approved

100%

Approval of the 53rd annual report

Approved

100%

Operational status of 2020 internal accounting management system

Operational status of 2020 reporting system for violations of internal accounting

Reported

Extraordinary

Meeting

Feb. 23

Approval of agenda to be submitted to the 53rd GSM

Approved

100%

Approval of the evaluation results of the operation system for the internal

accounting management system in 2020

Approved

100%

Approval of the audit performance in 2020 and the audit plan for 2021

Approved

100%

Progress of the external audit in 2020

Reported

Extraordinary

Meeting

Mar. 04

Re-approval of financial statements of the 53rd fiscal year

Approved

100%

Extraordinary

Meeting

Mar. 24

Appointment of the Chairperson of the Audit Committee.

Approved

100%

2nd General

Meeting

Apr. 22

Business results of 1st quarter of 2021

2021 evaluation plan for the internal accounting management system

Results of checking the compliance requirements related to the appointment

of an external auditor in 2020

The external auditor’s audit plan for the 2021 financial statements

Reported

100%

3rd General

Meeting

Jul. 22

Business results of 2nd quarter of 2021

Progress of the external auditor’s audit

Reported

100%

4th General

Meeting

Oct. 26

Establishment of regulations on the appointment of external auditors

Approved

100%

Business results of 3rd quarter of 2021

Progress of the internal accounting management system in 2021

Progress of the 2021 internal audit

Progress of the external audit

Reported

Extraordinary

Meeting

Nov. 09

Evaluation and selection of external auditor candidates

Approved

100%

Compensation Committee Activities in 2021

Date

Contents

Whether approved

Attendance rate

Approval rate

Feb. 19

Approval of the limit of remuneration for the 54th directors

Approved

100%

Recommendation Committee on Candidates for Non-executive Directors Composition

Name

Eun Soo Choi

Eugene M. Ohr

Sang-Seung Yi

Euisun Chung

JaeHoon Chang

Classification

Independent director

Internal director

Date of initial appointment

Mar. 17, 20017

Mar. 22, 2019

Mar. 24, 2021

Recommendation Committee on Candidates for Non-executive Directors Activities in 2021

Date

Contents

Whether approved

Attendance rate

Approval rate

Feb. 19

Recommendation on candidates for independent directors.

Approved

75%

100%

Recommendation Committee on Candidates for

Non-executive Directors

Composition of the Recommendation Committee on Candidates

for Non-executive Directors

In accordance with the relevant laws and regulations, Hyundai proposes

non-executive director candidates to a GSM following the recommendations

and deliberations of the Committee for Recommendation of Candidates

for Non-executive Directors and the BOD, respectively. The Committee is

composed of three independent directors and two internal directors, with

independent directors making up a majority of the total number of directors,

according to the laws and regulations.

Operation of the Recommendation Committee on Candidates

for Non-executive Directors

Roles and Responsibilities of the Recommendation Committee on

Candidates for Non-executive Directors

The Recommendation Committee on Candidates for Non-executive

Directors recommends candidates by comprehensively reviewing their

expertise and individual competencies in their respective fields, and ensures

that they meet the requirements of the laws related to independent directors.

By examining the candidates more closely than required by the law, Hyundai

prevents the appointment of independent directors with a history of causing

damages to corporate value or infringing shareholdersʼ rights.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Sustainability Management Committee Composition

Name

Eun Soo Choi

Chi-Won Yoon

Eugene M. Ohr

Sang-Seung Yi

Dal Hoon Shim

Ji Yun Lee

JaeHoon Chang

Classification

Independent director

Internal director

Date of initial

appointment

Mar. 17, 2017

Mar. 22, 2019

Mar. 24, 2021

Sustainability Management Committee Activities in 2021

Classification

Date

Contents

Whether

approved

Attendance

rate

Approval

rate

1st General

Meeting

Jan. 26

Approval of transactions of goods and services with an affiliated company including

the same person

Approved

100%

Approval of financial transactions under the terms and conditions agreed with

affiliated financial companies

Approved

100%

Approval of transaction limit with stakeholders

Approved

100%

Approval of the major social contribution plans for 2021

Approved

100%

Approval of investment in the ZERO1NE Fund 2

Approved

100%

Transactions between directors and the company in 4th quarter of 2020

Transactions with stakeholders in 2nd half of 2020

Social contribution activities in 4th quarter of 2020

Results of the inspection of employees’ implementation of the Code of Ethics in 2nd half of 2020

Implementation status and plan for the Compliance Program for Fair Trade

Governance activities in 2nd half of 2020

Reported

Extraordinary

Meeting

Feb. 23

Progress of ESG improvements

Reported

100%

Operation of the Sustainability Management Committee

Roles and Responsibilities of the Sustainability Management Committee

The Sustainability Management Committee is responsible for

strengthening the ESG management system by establishing major ESG-

related policies and discussing improvement plans, including the roles

of the former Corporate Governance & Communication Committee. In

addition, the Committee plays the role of a supervisory authority and

checks on ethical issues related with the company’s employees while

carrying out various activities to improve the company's sustainability

internally and externally, such as establishing major health and safety

related plans and checking that they are properly implemented.

Sustainability Management Committee

Composition of the Sustainability Management Committee

In 2021, Hyundai established the Sustainability Management Committee by

expanding and reorganizing the Corporate Governance & Communication

Committee. The Committee is composed of six independent directors and

one internal director, as the functions of the former Corporate Governance &

Communication Committee with four members have been expanded.

Classification

Date

Contents

Whether

approved

Attendance

rate

Approval

rate

Extraordinary

Meeting

Mar. 24

Appointment of the Chairman of the Sustainability Management Committee

Approved

100%

2nd General

Meeting

Apr. 22

Approval of transactions of goods and services with an affiliated company including

the same person

Approved

100%

Approval of financial transactions under the terms and conditions agreed with

affiliated financial companies.

Approved

100%

Approval of transactions with affiliates

Approved

100%

Deliberation on payment guarantees for overseas subsidiaries

Approved

100%

Transactions between directors and the company in 1st quarter of 2021

Social contribution activities in 1st quarter of 2021

Reported

3rd General

Meeting

Jul. 22

Approval of transactions of goods and services with an affiliated company including

the same person

Approved

100%

Approval of financial transactions under the terms and conditions agreed with

affiliated financial companies.

Approved

100%

Transactions between directors and the company in 2nd quarter of 2021

Transactions with stakeholders in 1st half of 2021

Social contribution activities in 2nd quarter of 2021

Results of the inspection of employees’ implementation of the Code of Ethics in 1st half of 2021

Implementation status and plan for the Compliance Program for Fair Trade

Governance activities in 1st half of 2021

Reported

Extraordinary

Meeting

Sep. 16

Details of compliance support activities in 3rd quarter of 2021

Hyundai Motor Company’s carbon neutral strategy

Reported

100%

4th General

Meeting

Oct. 26

Approval of transactions of goods and services with affiliated companies including

the same person

Approved

100%

Approval of financial transactions under the terms and conditions agreed with

affiliated financial companies

Approved

100%

Re-approval of transactions with affiliates (brand usage fee)

Approved

100%

Approval of transactions with an affiliate (lease of the office building in Gye-dong)

Approved

100%

Approval of transactions with an affiliate (maritime transportation of finished vehicles)

Approved

100%

Deliberation of transactions between directors, etc. and the company

Approved

100%

Transactions between directors and the company in 3rd quarter of 2021

Social contribution activities in 3rd quarter of 2021

Progress of the health and safety plan in 2021

Progress of the UAM Project

Reported

Extraordinary

Meeting

Dec. 9

Approval of the TRS settlement transaction for SPC’s stake in Hyundai Capital

Approved

100%

Approval of transactions with affiliates (brand usage fee)

Approved

100%

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Communication with Shareholders

One Share, One Vote

In accordance with the Commercial Act and the Articles of Incorporation,

Hyundai grants one voting right per share owned by shareholders according

to the type and number of stocks held. As of the end of 2021, the total

number of common shares issued is 213,668,187 of which 14,048,242 shares

are treasury stocks, so the number of common shares excluding treasury

stock is 199,619,945.

Strengthening Communication with Shareholders

In 2021, Hyundai held a total of 35 corporate briefing sessions including

quarterly business result announcements while communicating with

shareholders through various channels to establish global-level governance.

In particular, we hold an annual NDR in which the independent director in

charge of protecting shareholder’s rights and interests accompanies the

top management to meet with investors in person. In consideration of the

COVID-19 situation, we held the NDR virtually in 2020 and 2021.

Hyundai has been holding the CEO Investor Day annually since 2019 to

present its mid- to long-term management goals and enhance investors’

understanding of the company. The 2022 CEO Investor Day was held in

March. In addition, in the same month, we held an online corporate briefing

session for individual shareholders for the first time to share information

and strengthen communication with them about their main concerns. In

2021, we had more than 800 meetings, including conferences organized by

securities firms, NDRs for domestic and foreign investors, and frequent IR

interviews for visiting investors. In addition to investor meetings, we provided

annual guidance on our annual turnover and shareholder return policy for

the first time at the 2021 earnings announcement in January, and have been

since doing so as a way to enhance our management transparency and

shareholder value.

In March 2021, for the convenience of shareholders who could not attend

the GSM, Hyundai broadcast it live. We also conducted a survey on the

areas of greatest interest of shareholders who had pre-registered for

online attendance and, based on the results, held a briefing session on the

“automotive market outlook” to provide them with practical information and

promote closer communication with them.

Shareholder Return Policy

To enhance shareholder value, Hyundai has been paying dividends whose

size is determined in consideration of the company’s investment, business

performance, and cash flow. The company announced its “mid- and long-

term dividend policy” in 2017 and has maintained the same stance until

now. The policy seeks to return 30-50% of the annual free cash flow to

shareholders, while aiming for a dividend payout ratio comparable to that

of global competitors in the mid- to long-term. In addition, we endeavor to

demonstrate our respect for shareholders’ rights and boost their confidence

by providing them with an explanation of the direction of shareholder return

in the annual guidance announcement in January of each year.

In addition, we repurchased treasury stocks equivalent to 1.0% of issued

stock three times – from December 2018 to February 2019, from December

2019 to March 2020, and from November 2021 to February 2022 – in our

efforts to enhance shareholder value.

Protecting Shareholder Rights

Hyundai carries out a variety of activities to protect shareholder rights. While guaranteeing shareholders’ basic rights to

participate in profit distribution, attend GSMs and exercise voting rights, and receive information in a regular and timely

manner as stipulated in the Commercial Act, Hyundai seeks to establish transparent governance by communicating with

its shareholders through various channels. We respect the fair demands and opinions of shareholders, including their

exercise of shareholders’ rights to vote and make proposals, while laying solid foundations for sound governance through

a transparent and rational decision-making process. In addition, we bolster communication by actively operating investor

relation activities such as corporate briefings, non-deal roadshows (NDRs), and GSMs.

Convocation of a GSM

Convocation Notice of a General Shareholder’s Meeting

The Commercial Act stipulates that a convocation notice must be made

at least two weeks in advance in order to give shareholders sufficient time

to deliberate on items of agenda. To provide shareholders with more time,

Hyundai has improved its business process so that the convocation notice of

a GSM containing the date, place, and agenda can be provided four weeks in

advance. Accordingly, we have issued a convocation notice four weeks prior

to each GSM since 2020.

Exercise of Voting Rights

Hyundai’s Corporate Governance Charter stipulates that shareholders must

actively exercise their voting rights for the development and profit of the

company. We therefore ensure that our shareholders engage in important

business issues of the company by exercising their right to vote.

Approval of the Directors’ Compensation Limit

The directors’ compensation limit is submitted to a GSM after objective and

transparent deliberation by the Compensation Committee. The director’s

compensation limit proposed at the 55th GSM as item No. 4 was approved

at the approval rate of 99.4%.

Exercise of Shareholders’ Voting Rights

At Hyundai’s AGM, voting rights are exercised through shareholders’ direct

participation or by proxy, or by solicitation of the proxy exercise of voting

rights. In principle, one share has one vote. We introduced an electronic

voting system at the 52nd GSM held in 2020 to facilitate our shareholders’

voting rights. Since the 53rd GSM held in 2021, the meeting has been

broadcast live online to further enhance shareholders’ convenience,

including the prevention of the spread of COVID-19. In addition, shareholders

who meet the requirements for shareholders’ rights to make proposals

under the Commercial Act can express their opinions on the management's

compensation, etc. by requesting that a general shareholder’s meeting deal

with the issue as an agenda item.

Name

Type

Ownership (%)

No. of shares

1 Hyundai MOBIS

Common stock

21.43%

45,782,023

2 National Pension Service

Common stock

8.10%

17,312,294

3 Mong-Koo Chung

Common stock

5.33%

11,395,859

4 Euisun Chung

Common stock

2.62%

5,598,478

5 The Government of Singapore

Common stock

2.04%

4,363,364

6 Others

Common stock

60.48%

129,216,169

As of December 31, 2021

There are no golden shares possess by a government institution

213,668,187

Total

Kay agenda items in 2021

Dividend History

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Business Ethics & Compliance

Code of Conduct

Hyundai Motor Company Ethics Charter and Code of Conduct is designed

to increase ethical awareness among its employees by providing them with

specific procedures and measures related to the implementation of ethical

management. They specifically cover corruption and bribery, discrimination,

information confidentiality, conflicts of interest, antitrust/anti-competitive

practices, money laundering and insider trading, environment, health and

safety, and whistleblowing.

Anti-Corruption/Bribery Policy

In June 2021, Hyundai established an Anti-Corruption/Bribery Policy of

Hyundai Motor Company to prevent the risks of corruption and bribery and

ensure that employees comply with its ethical standards and moral values.

The policy includes such guidelines as the prohibition of all forms of bribery

and solicitation, the eradication of facilitation payments, the prohibition of

political donations and sponsorships, and rules on charitable donations and

sponsorships in accordance with the company’s standards and procedures.

The policy also contains a clause which stipulates that the company shall

establish a reporting system accessible to all employees and stakeholders

to monitor corruption and bribery risks at all times and to take the necessary

measures immediately in the event of violations.

Audit/Report on Ethical Risks, etc.

Hyundai operates the Compliance Support Advice Center within its

compliance management support system to encourage its employees to

comply with the rules and regulations and report any violations thereof.

Furthermore, the company operates a number of reporting channels, including

the Cyber Audit Office, with the goal of realizing transparent management.

Through these channels, we receive reports on acts that violate our ethical

management principles, including unfair trade practices, unreasonable

requests for or the provision of money, goods or entertainment, and misuses

and abuses of authority and solicitation, etc. If an act that violates the Hyundai

Motor Company Ethics Charter and Code of Conduct is detected, the

employee in question may be subject to disciplinary action up to termination

of employment pursuant to Article 64 of the Employment Rules. In addition,

Hyundai monitors its employees’ application of the Code of Ethics throughout

their performance in its semi-annual and ad hoc audits and reports the results

to the Sustainability Management Committee under the BOD.

Protection of Whistleblowers

Hyundai stipulates the protection of whistleblowers related to employee’s

business ethics and compliance through the Ethics Charter, Code of

Conduct, and internal rules relating to workplace ethics regulations, while

also complying with relevant laws. We have also set measures in place for

protection of the confidentiality of whistleblowers and related information

as well as strict prohibition of disadvantages or retaliation against them.

In the event that protection for a whistleblower is violated, such as cases

of retaliation against internal whistleblowers, the company may impose

aggravated punishment on the offenders in accordance with Article 9 of

Chapter 3 (Handling of violations of the regulations) of the regulations on

workplace ethics.

Implementation of Ethical Management

Internalization of Code of Conduct

Hyundai requires its employees to pledge compliance and ethical

management on a regular basis in an effort to help them internalize the

company’s Code of Conduct. In 2021, Hyundai conducted ethics education

for about 73,000 employees, including contract workers, through an online

platform and in-house broadcasting system, to raise awareness of major

ethical issues such as anti-corruption, fair trade, and cyber security. The

implementation of the Ethics Charter and Code of Conduct is overseen by

the BOD’s Sustainability Management Committee, which was reorganized

in March 2021. The Committee is authorized to make decisions on major

ethical management-related policies and revisions of the Code of Conduct,

among other tasks.

Ethical Management

As a corporate citizen, Hyundai is taking the lead in practicing business ethics to fulfill its economic and legal responsibilities

to its stakeholders – including customers, shareholders, suppliers, and local communities – through ethical management

activities and fair trade compliance. In 2001, we enacted the Ethics Charter, Employee Code of Conduct, and Guidelines for

Ethical Business Conduct to establish the basis for our employees’ ethical judgments and promote an ethical management

culture throughout the company. In March 2021, we reformed the former Corporate Governance & Communication

Committee into the Sustainability Management Committee to build trust and pursue win-win growth with our stakeholders.

Whistleblower Protections

Confidentiality: Personal information of the informant cannot be

disclosed to the public without the informant’s consent.

Guarantee of status: The employer or relevant department is

prohibited from imposing any disadvantages or discriminating

against the informant because of supplied information,

statements and submission of evidence.

Reduction or exemption of liabilities: If any mistake or negligence

of the informant are discovered during the investigation process,

the liabilities of the information for such faults or negligence may

be reduced or waived.

We shall perform our duties based on clear and transparent standards

and do our utmost to fulfill our responsibilities with integrity.

We shall compete fairly in the market and conduct business ethically

with all parties that engage in contractual relationships with us.

We shall provide safe products, exceptional services and accurate

information, and we rigorously protect personal information to

increase customer value.

We shall respect our members as independent individuals and, to this

end, provide fair working conditions and safe working environments.

We shall contribute to sustainable development by fulfilling our social

& environmental responsibilities as a member of society, so that

diverse stakeholders may prosper together in harmony.

Reporting Channels

By Phone

+82-2-3464-3500

By Mail

Hyundai Motor Group Audit Office

By Fax

+82-2-3464-8813

Cyber Audit Office

Reporting

Ethical Management System

Ethics Charter

Hyundai has established the Hyundai Ethics Charter in order to conduct

its business based on the principles of ethics and compliance as a global

leading company. The following Five Guiding Principles of the Hyundai

Motor Group Ethics Charter serve as the guidelines on ethical management

which Hyundai employees must follow to when dealing with various

stakeholders such as customers, shareholders, suppliers, and members of

local communities.

Five Guiding Principles of Hyundai Motor Group’s Ethics Charter

Anti-Corruption/Bribery Policy of Hyundai Motor Company

Hyundai Motor Company Ethics Charter and Code of Conduct

Investigation into Violations of the Code of Conduct

In 2021, Hyundai received 104 reports related to the forgery of private

documents/violations of concurrent positions, bribery, violations of

information security, and workplace harassment; investigated 80 cases,

excluding false reports; and took disciplinary action – dismissal, wage cut,

suspension, warning, etc. – against 46 cases.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Compliance Program

Implementing the Compliance Program

Hyundai promotes fair and transparent management starting with its

CEO’s commitment to compliance program (CP) in the first and second

half of every year. In this way, Hyundai spreads its top management’s

strong CP commitment to all of its employees in addition to getting

its own Guidelines on CP, which are applied to their actual work

performance. In addition, Hyundai appoints a CP officer at a BOD

meeting to manage and supervise the company’s overall performance

in terms of fair trade, while fostering a CP culture by offering various fair

trade training programs and newsletters company-wide. Hyundai reports

the results of its CP implementation efforts and its plan for the next year

to the BOD semi-annually as a way to strengthen the responsibilities and

obligations of each business site to promote CP.

Fair Trading Education

Hyundai not only conducts fair trade education for its employees every year,

but also informs new employees of the importance of complying with the

Fair Trade Act from the moment they join the company. We also conduct

annual CP training for all new executives and employees working in areas

that are subject or closely related to the fair trade laws. We promote fair

trade through bi-monthly fair trade newsletters to raise awareness of fair

trade throughout the company and ensure that our employees practice

precautions related to fair trade. Most notably, Hyundai makes utmost efforts

to provide education and video lectures on the protection of its suppliers’

technologies which has been gaining importance.

Fair Trading Education Performance

Year

Number of training sessions

Number of participants

2018

2,246

2019

1,429

2020

8,456

2021

8,261

* Replaced by online training due to COVID-19 in 2020 and 2021

Fair Trade and Anti-corruption Programs for Suppliers

Hyundai includes contents such as bribes and customary fees including

rebates in the Ethics Charter and Code of Conducts, as well as the

Guidelines for Ethical Conduct to prevent such incidents from happening

and thereby ensuring that its employees and those of its suppliers can

continue to conduct transparent and fair transactions. We also conduct

anti-corruption risk checks and report the results to the Sustainability

Management Committee under the BOD.

Building Compliance Management System

Chief Compliance Officer & Compliance Officer

In 2012, Hyundai appointed a Chief Compliance Officer and established

compliance control standards and implementation guidelines to serve as the

basis of the company’s compliance support activities. The Chief Compliance

Officer conducts compliance support activities to prevent corporate legal

risks and reports the details to the BOD regularly, while having external

experts evaluate the effectiveness of the company’s compliance control

system and reporting the outcomes to the BOD once a year.

In addition, we have been appointing departmental heads as Compliance

Officer of their respective departments. By introducing the compliance

officer system, Hyundai has made it possible for the company’s compliance

management message to spread effectively across all departments, thereby

instilling its key employees with a keen sense of responsibility for compliance

management.

Online Compliance System

Hyundai has been upgrading its online compliance system as a way

to support compliance activities more extensively, which enables our

employees to gain access to not only existing functions, such as legal advice

and contract review, but also to new functions including compliance self-

assessment and compliance library services.

Strengthening Compliance Capability and

Creating of a Compliance Culture

Compliance Self-assessment & Compliance Guideline

Hyundai conducts compliance self-assessment in various areas of law,

including trade secrets, anti-corruption, and personal information, so that

employees can diagnose and prevent legal harm on their own in the course

of performing their duties (twice a year for each legal area).

Compliance Management

Hyundai practices compliance management effectively

through a robust compliance support system. The company

helps its employees diagnose and prevent compliance

risks on their own through the compliance support officer

system, the expanded online compliance support system,

compliance education, compliance self-assessment,

compliance guidelines, and compliance newsletters.

Fair Trade

Hyundai competes fairly in the market and conducts fair

dealings with its contractual counterparts. In particular, we

include the principles of fair trade with competitors and

suppliers, such as antitrust, collusion, unfair competition,

and money laundering, in our Ethics Charter and Code of

Conduct, and do our business accordingly.

•

Dissemination of the CEO’s

message emphasizing fair trade

(all employees, twice a year)

•

Operation of the CP Council

Planning

•

Offline and online training on

the Fair Trade Act, etc.

•

Distribution of fair trade

newsletters

Increasing employee awareness

•

Reporting of CP performance

status and plans to the BOD

Reporting results

CP Implementation Process

Following the compliance self-assessment, the company enables

the relevant departments to improve the risks identified during the

assessment process on their own.

In addition, we have produced and distributed compliance guidelines

containing the main contents of the laws and regulations which

employees should know and comply with when performing their duties.

We have published some 40 compliance guidelines on the Monopoly

Regulation and Fair Trade Act, the Criminal Act, the Unfair Competition

Prevention and Trade Secret Protection Act, labor laws, and intellectual

property laws etc. at home and abroad, as well as publishing summary

guidelines designed to increase employees’ usability and reflect revisions

of the laws.

In 2021, Hyundai produced and distributed an English-language version

of the Compliance Management Handbook, which was revised in 2020,

to reiterate the importance of compliance management to foreign

employees and promote the practice of compliance management as a

way to enhance the overall compliance capacity of our employees.

Compliance Training & Newsletter

Hyundai raises awareness of compliance management by providing

regular and ad hoc compliance training for new recruits, newly promoted

employees, and overseas employees. In particular, we provide online

compliance training on dealing with anti-corruption and preventing

collusion for all employees once a year to prevent the various legal risks that

may arise in the course of their business performance. We also introduce

the latest compliance issues to our employees by regularly publishing a

compliance newsletter that introduces legal issues related to the automotive

industry and in-house ethical regulations, in addition to a monthly legal

report that introduces the latest legal revisions and precedents.

In addition, we put even more effort into raising awareness of compliance

among leaders by publishing a leader compliance newsletter that

provides them with customized compliance management information

and requiring each of them to conduct a compliance self-assessment.

Compliance and Ethics Pledge

Hyundai has its employees make a pledge to practice compliance and

ethical management as a way to remind them of principles of compliance

and ethics and to help them develop compliance mindset.

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1. Introduction

Global Risk Management System

Company-wide Risk Management System

Hyundai is faced with unparalleled risks due to the prolonged COVID-19

crisis and the unstable international situation caused by the Russia-

Ukraine war, and the resulting imbalance in the supply and demand of

semiconductors, which are key automobile parts. In response, Hyundai

has established and begun operating a company-wide risk management

system. More specifically, the company has appointed a CFO in charge of

the company’s overall risk management and launched the Sustainability

Management Committee within the BOD to regularly discuss major ESG

issues and risk responses. In addition to the BOD, the Management Strategy

Committee, composed of key executives (division head level) including the

CEO, convenes every month to manage material risks that have a significant

impact on the company. Moreover, Hyundai has established a risk reporting

line that covers all the way to the CEO and the BOD, so that the risks

identified in each division can be shared with key management.

Hyundai strives to enable not only its key management but also all other

employees to manage risks based on its 2025 Strategy and seize opportunities

to create corporate value. To this end, we produce video clips of the core

content of the 2025 Strategy and conduct employee training. Key emerging

risks are provided online to employees through the “Weekly B.I. Briefing

(Risk Trend Report)”. In addition to training, we use non-financial risk factors

as performance evaluation indicators for executives. Going forward, we will

continue to develop evaluation and training schemes for all our employees.

Risk Management System by Division

Hyundai manages risks through the planning part within each of the various

divisions organized by value chain. The Sales Division is divided by region,

such as Korea, China, North America, Europe, India, Africa and the Middle

East. The planning part within the Division focuses on managing specific

risks associated with its respective market. Hyundai’s risk management

organizations include the Legal Office, which manages legal risks; the

Legal Certification Office, which manages vehicle-related regulations and

certification-related risks; divisions devoted to particular functions such as

finance, labor, and quality; and the HMG Management Research Institute,

which prepares preemptive countermeasures by analyzing macro- and

micro-economic and industrial trends. The risk management departments

operate independently of business divisions divided by value chain, while

corruption and unfair trade are managed through continuous monitoring by

the Audit Office within the Audit Committee.

Risk Management

Hyundai is facing a shift to two major paradigms – the internalization of future technologies such as electrification,

autonomous driving, and connectivity, and response to ESG issues and risks. These new paradigms will give us an opportunity

to leap forward into a global top-tier company while carrying the risks posed by uncertainty. Accordingly, we strive to build

proactive risk management culture based on a company-wide risk management and monitoring system, risk-linked employee

performance evaluation, and company-wide training on related topics. In the immediate future, Hyundai will conduct a

thorough analysis of the core risks and continue to enhance its risk management processes as an organization that can turn

each new crisis into an opportunity to leap forward.

Risk Management System

Sales

Production

Procurement

A planning part within each business division manages

business risks in their respective fields

Management

Research Institute

Legal Office

Periodic risk

monitoring

and

management

Risk management

regarding finance,

labor, quality,

etc.

Research on

macro/

micro risks in

the market

Management

Strategy

Committee

BOD

Business Strategy Division

• Management of response to major

company-wide risks

• Meetings held every month

• Response to major ESG issues and risks

• 2-4 meetings per year

Business Lines

Risk Management Line

Audit of

corruption and

unfair trade,

and monitoring

of company-

wide risk

management

Risk Management

Monitoring Line

Audit Office

Sustainability Management Committee

Audit Committee

Product development

and research

Professional

organizations by function

In order to boost the efficiency of each department’s risk management

system, Hyundai has established a risk identification and reporting

procedure for employees. Once identified, risks are managed in the order

of identification, check/report, and preemptive response through weekly/

monthly/ongoing risk assessment meetings. For key areas that directly

affect the companyʼs business operations, Hyundai has established monthly

risk assessment meetings for each area, such as sales/production and PM/

product strategy. Hyundai has also enabled product-level risk management,

including the establishment of risk criteria within the product development

and approval process.

Tax Strategy

Hyundai recognizes that tax compliance significantly contributes to

securing customer profits and maximizing both shareholders’ returns and

government finances, and that tax risk management is a prerequisite for

sustainable management. We therefore respect the principle of fair taxation

by the tax authorities and faithfully comply with our tax obligations as a

taxpayer. Going forward, we will strive to build collaborative mutual trust

with tax authorities.

Managing Tax Risks

“Strict compliance with the laws” is the core of Hyundai’s tax risk

management policy. The company takes the lead in creating a transparent

tax culture by faithfully providing all the evidence requested by tax

authorities. Hyundai never engages in any tax evasion by using tax havens

or tax structures without commercial substance. Furthermore, as a global

company, we prevent tax risks in advance by identifying differences in the

tax laws of different countries and their intention and by analyzing their

respective dispute risks. Good example includes the “arm’s length principle”

as a way to prevent the risk of double taxation arising from competition for

taxation rights between tax authorities in advance.

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1. Introduction

Integrated Risk Management

Managing internal controls on risk is important to secure effective financial

planning and organizational flexibility. In order to analyze various types of

risks in addition to market or price risks, Hyundai has conducted sensitivity

tests and stress analysis related to those risks.

Classification

Key Tasks

Currency risk

•

Implementing the foreign currency inflow and outflow matching strategy to manage the exchange risk of major foreign currencies

such as the USD, EUR, and JPY

•

Adjusting the foreign currency fund supply and demand settlement date according to exchange rate forecasts, and using foreign

exchange derivatives etc. as a hedging instrument

Interest rate risk

• Short-term borrowings: Balancing fixed-rate borrowings and floating-rate borrowings

• Long-term borrowings: Adhering to the principle of fixed-rate borrowing, etc.

Credit risk

• Selecting business partners above a certain level by evaluating their financial conditions, transaction experience, and other factors

Liquidity risk

• Establishing and forecasting short-term and mid- to long-term money management plans along with an analysis of actual cash flow

• Maturity structure response management, etc. of financial assets and financial liabilities

Climate risk

• Establish a goal to achieve carbon neutrality by 2045 at all stages from the procurement of parts to production and operation

• Reorganize the business structure centered on electrified vehicles for carbon reduction and net-zero emissions

•

Increase the use of renewable energy in business sites through green hydrogen, renewable energy power generation, REC purchase,

and renewable energy PPA contracts (Achieve 100% renewable electricity (RE100) by 2045)

Water risk

•

Efficient use of water resources and periodic inspections of leaking facilities to prevent the risk of rising operating costs and production

costs due to higher water bills

Resource risk

• Design considering the application of recycled materials to major automobile parts as well as scrap car recycling

•

Activities to recreate value from end-of-life vehicles including “Re:Style”, an upcycling project conducted in collaboration with the

fashion industry

Hazardous gas risk

• Respond to stricter laws on harmful gases such as Euro 6 and RDE, and preemptive respond to increasingly strict legal standards

• Develop new technologies to reduce exhaust gas and air pollutants generated by production facilities, etc.

Hazardous

substance risk

•

Adopt the International Material Data System (IMDS) to check whether all chemical substances in parts produced by suppliers meet

the regulations, while limiting the use of chemical products containing highly hazardous substances in factories and promoting zero-

hazardous substances through the use of substitutes, etc. for workers’ health and safety

Increased Regulatory Risks Associated with the

Establishment

of a Plastic Circular Economy in Europe and Korea

Risk Context

In December 2020, the Korean government declared “Carbon

Neutrality by 2050” and set the target of reducing GHG emissions in

the transportation sector to be 29.3% of the level recorded in 2017 by

2050. To this end, the Korean government is expected to change the

current vehicle tax based on vehicle price and engine displacement to

an eco-friendly tax based on carbon emissions, while strengthening

regulations on CO

emissions. Some European countries, such as

France, already impose a car tax based on carbon emissions, with

the implementation of the policy affecting demand in the car market.

Hyundai’s Genesis brand and mid-to-large SUVs, both of which have

contributed significantly to the company’s profitability, are expected to

take a big hit in sales when a carbon-emissions-based tax is imposed

due to their relatively high CO

emissions.

Hyundai’s Approach

In response to the risk of changes in market demand caused by the new

tax policy, Hyundai is approaching the challenge from two directions.

First, in order to reduce the carbon emissions of its SUV models, in

2021 Hyundai launched the Tucson PHEV (CO

emissions: 31 g/km) and

the Santa Fe PHEV, which have significantly improved CO

emissions

compared to the existing Tucson model (CO

emissions: 148 g/km).

Second, we launched the IONIQ 5, the first dedicated EV based on

the E-GMP (Electric-Global Modular Platform), an electric vehicle-

only platform, in 2021. In addition, we are expanding the EV lineup of

the Genesis brand from small to medium/large vehicles by launching

the G80 EV, the first EV under the Genesis brand, and the GV60, the

first dedicated EV model. Going forward, we will establish an EV lineup

consisting of 17 models (11 Hyundai models and 6 Genesis models) by

2030, and for the Genesis brand in particular, we plan to switch 100% of

the Genesis lineup to EVs by 2030.

Risk Context

In 2018, the European Commission announced a strategy to build the plastic

circular economy with the aim of reusing or recycling 100% of all plastic

packaging and recycling more than 50% of all waste plastics generated in

Europe by 2030. To this end, the EU banned the use of major single-use plastics

(SUPs) in 2021, which was followed by the strengthening of its regulations on

the use of plastics for vehicles as well as household and disposable plastics. In

particular, it is pushing for the enforcement of regulations mandating the use

of recycled plastics in new cars. In Korea, the government is presenting the

establishment of a plastic circular economy as a major national task, so that it

is expected to change the current recommendation on the recycling of scrap

cars to a 95% recycling mandate, in addition to introducing the mandatory use

of recycled plastics in new cars, as is already the case in Europe. Once Korea has

enforced the regulation mandating the use of recycled plastic materials in new

cars, it is expected that Hyundai will face multiple risks such as the risk of an

interruption of production due to a rise in the price of recycled plastic materials

combined with a shortage in supply, as well as regulatory risks stemming from

a shortage of high-quality recycled plastics that meet the safety and quality

requirements for new cars. Notably, the regulatory risks are most likely to

increase when Korea enforces a 95% compulsory regulation on the recycling

rate of scrapped cars, like the European ELV (End-of-Life Vehicles) regulation,

because, unlike in Europe, if Korea implements the pre-shredder method (the

manual dismantling and recycling of the parts of a scrapped car), there will be

limits to the disposal and recycling of scrapped cars in large quantities.

Hyundai’s Approach

Plastics make up the second largest segment after metals, accounting for

17% of all vehicle materials on average on an internal combustion engine

(ICE) basis. However, the recycling rate of plastics used in vehicles is low

because they are composites. Therefore, to increase the recycling rate of

plastics, Hyundai launched the Resource Circulation Council in 2021, and has

improved its recycling rate of waste resources generated from the existing

scrapped car network, while overhauling all the relevant work. We are also

planning to recover plastics from not only wheel guards, undercovers, battery

trays, and fan-shrouds but also from lamps, exterior parts, and closure parts.

In addition, we make continuous efforts to discover new sources of waste

plastics in order to secure a stable supply chain for recycled plastics, and

reviews plastic recycling in various fields such as marine pollutants and rural

environmental pollutants. Furthermore, we have established a strategic

collaboration system for plastic recycling with leading domestic and foreign

chemical companies and hold regular technical exchange meetings with

them for a joint response.

Major Potential Risks

Potential Vehicle Tax Reform based on Domestic

Carbon Emission Levels

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1. Introduction

ESG Factbook

5.1

Global Network

5.2

Business Performance

5.3

Facts & Figures

5.4

ESG Certiﬁcations

5.5

GRI Index

5.6

TCFD Index

5.7

SASB Index

5.8

WEF IBC Stakeholder Capitalism Metrics

5.9

Stakeholder Engagement

5.10

Materiality Analysis

5.11

Independent Assurance Statement

5.12

Assurance Statement

5.13

About This Report

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1. Introduction

Global Network

Hyundai operates production plants, technology research institutes, and design centers in major overseas markets.

We sell vehicles across the globe, with around 6,200 sales networks in approximately 184 countries.

* As of June, 2021

Hyundai Motor Group(China) Ltd.

Beijing Hyundai Motor Company

Hyundai Motor Technology And

Engineering Center(China), Ltd.

Hyundai Truck & Bus (China)

Beijing Zingxianmotor Safeguard

Service Co

Hyundai Top Selection Used Car Co., Ltd.

China Commercial Vehicle R&D Center

Hyundai Motor Global Tooling in China

CO., Ltd.

Genesis Motor China

10 Hyundai Motor Japan R&D Center

11 Hyundai Motor Japan

12 Hyundai Motor India Headquarters

13 Hyundai Motor India Engineering Center

Hyundai Thanh Cong Commercial Vehicle

Joint Stock Company

15 Hyundai Motor Asia-Paciﬁc Headquarters

16 Hyundai Motor Manufacturing Indonesia

17 Hyundai Motors Indonesia

Hyundai Thanh Cong Manufacturing

Vietnam

19 Hyundai Motor Company Australia

Hyundai Motor Group Innovation Center

in Singapore

21 HTWO Guangzhou

22 Hyundai Thanh Cong Vietnam

Advanced & Digital R&D Center China

24 Hyundai Motor Philippines, Inc.

Asia & Paciﬁc

Hyundai Motor North America

Headquarters

51 Hyundai Auto Canada Corp.

52 Hyundai·Kia America Technical Center, Inc.

53 Hyundai Motor Manufacturing Alabama

Hyundai Motor Central & South America

Headquarters

55 Hyundai Motor de Mexico

56 Hyundai de Mexico

57 Hyundai Translead

58 Hyundai Motor America

Hyundai Motor Company Washington

Ofﬁce

60 Motional

61 Supernal

62 Genesis Motor North America

63 North America Quality Center

64 Boston Dynamics

North America, Central & South America

Hyundai Motor Europe Headquarters

30 Hyundai Motor Manufacturing Czech

31 Hyundai Motor Czech

32 Hyundai Motorsport Gmbh

33 Hyundai Motor Company Italy

Hyundai Motor Deutschland Gmbh

Hyundai Motor United Kingdom

36 Hyundai Motor France

37 Hyundai Motor Europe Technical Center

38 Hyundai Motor Poland

39 Hyundai Motor Espana

40 Hyundai Motor Netherlands B.V.

41 Hyundai Motor Russia & CIS Headquarters

Hyundai Motor Commonwealth Of

Independent States

43 Hyundai Motor Manufacturing Russia

44 Hyundai Truck & Bus Russia

Hyundai Assan Otomotiv Sanayi Ve Ticaret

A.S.

46 Genesis Motor Europe

47 Hyundai Hydrogen Mobility

48 Europe Quality Center

49 Hyundai Motor Company Brussels Ofﬁce

Europe

Hyundai Motor M.East & Africa

Headquarters

Commercial Vehicle Africa & Middle East

Regional Headquarter

27 Africa & Middle East Quality Center

28 Genesis Middle East & Africa

Middle East & Africa

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1. Introduction

Business Performance

Performance Overview

In 2021, difficulties continued in the business environment, including a reduction of sales performance as

production and sales difficulties were caused by the re-spread of COVID-19, global semiconductor supply

shortages, and increased raw material prices and logistics costs.

Notwithstanding, Hyundai made continued efforts to create economic value by continually securing a

competitive edge, realize customer value through quality management, and pursue social value through

corporate citizenship. We worked on flexible production and sales, profitability improvement, increased

cost efficiency, as well as enhanced electrification competitiveness, including the launch of E-GMP, which

led to various tangible outcomes.

In the 2022 Durability Quality Survey conducted by J.D. Power, a US-based market research firm, Hyundai

ranked the top from among global automobile manufacturer groups. In the electrified vehicle sales

market, the IONIQ 5 was named “World Car of the Year” at the 2022 World Car Awards and made the

achievement of enhancing brand value.

Global Sales in 2021

(Unit: Vehicle)

Domestic

Passenger vehicles

698,180

Commercial vehicles

28,658

Overseas

North America (U.S., Canada, Mexico)

824,783

India

505,034

Europe (Western, Eastern, Turkey)

540,967

Russia (Russia, CIS)

198,234

Central & South America (Brazil, Other Latin American countries)

290,248

Africa & Middle East

242,183

Asia-Pacific (Other countries in Asia-Pacific region, Australia)

182,353

China

351,803

Overseas commercial vehicles, etc.

28,283

Total

3,890,726

Global Sales in 2021

(Unit: Vehicle)

824,783

North America

290,248

Central &

South America

28,283

Overseas commercial

vehicles, etc.

540,967

505,034

Europe

India

182,353

Asia-Pacific

242,183

Africa &

Middle East

198,234

Russia

726,838

Korea

351,803

China

Sales in Korea

727,000

units

Market Share in Korea (Including imports)

Business Review

Despite difficult conditions with intensifying competition, Hyundai strives for customer satisfaction

through product development, price policy, and services. For sustainable management, we are

making continued efforts to generate environmental and social value, such as developing eco-

friendly vehicles, establishing a low-carbon society, and achieving shared growth with suppliers.

We are also endeavoring to contribute to society, including selecting 37 social welfare projects by

inviting public participation and providing multilateral support.

In 2021, Hyundai sold 727,000 vehicles (retail basis) in the Korean market to indicate a year-on-year

decrease of 7.7%, but recorded a market share of 42% (including imported cars) by strengthening the

Genesis brand lineup and achieving strong sales of volume models. In particular, Hyundai is leading

the transition to electrification in the Korean market by leading the development and sales of eco-

friendly vehicles, such as by launching the IONIQ 5, to which an EV-only platform was applied, and

launching Genesis brand electric vehicles, the Electrified G80 and GV60.

Market Condition and Business Review in Korea

Market Condition

Annual sales in 2021 totaled 1.73 million, a year-on-year decrease of 8.4%, attributable to supply

setbacks of major manufacturers in Korea as a result of supply shortages of semiconductors for

vehicles. However, demand to purchase vehicles has been on the rise on the back of favorable

conditions in the overall automobile market, such as diversification of sales channels, acceleration

of the transition to electrification, and launch of new vehicles by major brands.

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1. Introduction

Market Condition and Business Review by Region

Market Condition

Automobile sales in the US market increased 3.4% over the previous year to record 15.079 million vehicles

(retail basis). Sales continued to increase in the first half of the year as the market overcame the COVID-19

shock compared to the previous year, but sales in the second half of the year dropped to the lowest level

in the past decade as impact from semiconductor supply shortages went into full effect.

Business Review

In 2021, Genesis recorded a more than three-fold increase in sales over the previous year in the US market

on the back of strong sales of the SUV models, the GV70 and GV80. Hyundai sold 788,000 units (retail

basis), indicating year-on-year growth of 23.3%, and a market share of 5.2%.

The GV80 was chosen for “10 Best Cars and Trucks for 2021” by the Car and Driver magazine, while the

G80 and Accent ranked No. 1 in the upper-mid premium category and small car category, respectively,

in J.D. Power’s Initial Quality Study (IQS). The Elantra was chosen as the NACTOY Car of the Year in 2021

following its selection in 2012. There are only two vehicles that won the North American Car of the Year

award more than once after the award was created in 1994 which are the Chevrolet Corvette and Honda

Civic. The Elantra has become one of the most recognized semi-medium vehicles in the world. In the

electric vehicle sector, the Kona and IONIQ were chosen as the top ten electric vehicles by AutoTrader.

Market Condition

In China, sales in the first quarter substantially rose owing to base effects from a regional lockdown

measure that was taken against the spread of COVID-19 the previous year, but semiconductor supply

shortages began to worsen in the second quarter and somewhat restricted overall sales growth,

resulting in a year-on-year increase of 2.3% in sales to record 19.888 million units. New energy vehicles

are continuing rapid growth (175% increase over the previous year), an outcome of a rise in private

consumers resulting from extension of subsidy payments and increased high-performance BEV launch by

different

companies. In the area of SUVs, luxury brands continued to remain strong in accordance with the

consumption upgrade trend, but some joint companies’ volume model sales were sluggish owing to parts

supply shortages to result in a year-on-year decrease of 0.3%. However, markets exclusive of SUVs grew 4.5%.

The Indian market recorded a year-on-year increase of 27.3% in sales to 3.105 million vehicles. Standby

demand from COVID-19 resulted in strong sales in the first quarter, but the spread of the Delta variant

in May resulted in a lockdown of some areas, leading to a temporary decrease in demand. However,

demand steadily recovered through August. Afterwards, reduced production of each manufacturer due

to the global semiconductor supply shortage continued from September to the end of the year. Despite

the lockdown of some regions and semiconductor supply issues, sales in 2021 totaled 3.1 million units as

a result of base effects from the sluggish automobile market that was caused by the economic downturn

and the spread of COVID-19 over the last two years as well as improvements in overall conditions.

Business Review

In 2021, Hyundai’s sales volume in China fell by 20.4% year-on-year to 350,000 vehicles (wholesale basis),

recording a market share of 1.8%. Sales of Lafesta and ix25 were sluggish, but strong sales of AVANTE and

new car effects of Tucson/Custo resulted in a lower level of decrease compared to the previous year (32.3%

decrease in 2020).

In India, strong sales of major models, including Creta, Venue, and i20, continued on the back of increased

demand, leading to a year-on-year increase of 19.2% in sales volume to reach 505,000 vehicles in 2021.

Market Condition

Total sales in Europe in 2021 were 11.775 million vehicles, a year-on-year decrease of 1.5%. Recovery from

decreased sales caused by COVID-19 the previous year is being delayed by supply setbacks triggered by

semiconductor supply shortages and the spread of COVID-19 variants.

Business Review

In 2021, Hyundai’s sales volume in Europe increased by 36.7% year-on-year to 505,000 units (retail basis),

recording a market share of 4.3% in the overall market. On the back of the launch of the IONIQ 5 and

Tucson PHEV, BEV and PHEV sales indicated year-on-year growth of 26.5% and 352.5%, respectively. The

IONIQ 5 won the German Car of the Year in the new energy category.

Sales in the U.S.

788,000

units

Market Share in the U.S.

5.2

Sales in China (Wholesale basis)

350,000

units

Sales in India

505,000

units

Sales in Europe (Retail basis)

505,000

units

Market Share in Europe

4.3

U.S. Market

Asian Market

European Market

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1. Introduction

Facts & Figures

SALES AND FINANCIAL INFORMATION

Classification

Unit

2019

2020

2021

Note

General

Information

Assets

KRW billion

194,512.2

209,344.2

233,946.4

Consolidated figures basis

Sales

KRW billion

105,746.4

103,997.6

117,610.6

Consolidated figures basis

Production

Vehicle

448,480.5

373,342.2

386,977.5

Global

Production

Domestic

Vehicle

1,783,617

1,618,411

1,620,231

India

Vehicle

682,100

521,300

636,000

China

Vehicle

668,105

465,388

334,700

U.S.

Vehicle

336,000

268,700

291,500

Czech Republic

Vehicle

309,500

238,750

275,000

Russia

Vehicle

245,702

219,491

234,150

Brazil

Vehicle

206,038

150,610

187,300

Turkey

Vehicle

175,000

137,100

162,140

Vietnam

Vehicle

74,973

71,140

71,443

Others

Vehicle

3,770

42,532

57,311

Total

Vehicle

4,484,805

3,733,422

3,869,775

Global

Sales

Domestic

Vehicle

741,842

787,854

726,838

Overseas

Vehicle

3,734,309

2,956,883

3,163,888

Total

Vehicle

4,476,151

3,744,737

3,890,726

Global

Best-selling

Models

Tucson

Vehicle

492,165

429,241

505,967

Elantra (AVANTE)

Vehicle

458,881

439,194

391,899

Santa Fe

Vehicle

211,902

221,597

227,536

Accent

Vehicle

304,748

293,560

190,833

Sonata

Vehicle

256,433

217,289

168,878

Including production performances derived from the joint venture (JV) subsidiary, in addition to those disclosed in Hyundai Motor Company’s Business Report

Performance of CKD and consigned commercial vehicle production

Classification

Unit

2019

2020

2021

Note

Financial

Highlights

Statements of

financial position

(Consolidated)

Total assets

KRW billion

194,512

209,344

233,946

Total liabilities

KRW billion

118,146

133,003

151,331

Total equity

KRW billion

76,366

76,341

82,616

Statements of

financial position

(Separate)

Total assets

KRW billion

73,759

78,651

79,758

Total liabilities

KRW billion

20,238

25,064

27,083

Total equity

KRW billion

53,521

53,189

52,675

Statements

of income

(Consolidated)

Sales

KRW billion

105,746

103,998

117,611

Operating profit

KRW billion

3,606

2,395

6,679

Selling and

administrative

expenses

KRW billion

14,050

16,087

15,252

Net profit

KRW billion

3,186

1,925

5,693

Including non-controlling interests

EBITDA

KRW billion

7,437

6,580

11,235

Based on Bloomberg

(sum of operating profit, depreciation

of tangible assets, depreciation of

real estate held for investment, and

depreciation of intangible assets)

Statements of

income (Separate)

Sales

KRW billion

49,156

50,661

55,605

Operating profit

KRW billion

1,580

769

662

Selling and

administrative

expenses

KRW billion

7,251

8,885

8,404

Net profit

KRW billion

2,832

527

646

EBITDA

KRW billion

4,061

3,550

3,766

Based on Bloomberg

(sum of operating profit, depreciation

of tangible assets, depreciation of

real estate held for investment, and

depreciation of intangible assets)

Profitability ratio

(Consolidated)

Operating

profit margin

3.4%

2.3%

5.7%

Net profit margin

3.0%

1.9%

4.8%

Profitability ratio

(Separate)

Operating

profit margin

3.2%

1.5%

1.2%

Net profit margin

5.8%

1.0%

1.2%

2021 Audited Financial Statements of Hyundai Motor Company

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Classification

Unit

2019

2020

2021

Note

Financial

Highlights

Distribution of

Economic Value

(Consolidated)

Dividends

(Shareholders and investors)

KRW billion

1,054

786

1,301

Interest expenses

(Shareholders and investors)

KRW billion

317

362

305

Refer to “financial income and

financial expense” in the notes

to the consolidated financial

statement

Salaries

(Employees)

KRW billion

9,397

9,099

9,614

Refer to “classification of expenses

by nature” in the notes to the

consolidated financial statement

Raw materials costs

(Suppliers)

KRW billion

62,259

59,085

67,579

Refer to “classification of expenses

by nature (raw material and

product usage amount)” in the

notes to the consolidated financial

statement

Income tax

(Government)

KRW billion

978

169

2,266

Refer to “income tax” in the notes

to the consolidated financial

statement

Donation

(Local communities)

KRW billion

Refer to “other income/expense”

in the notes to the consolidated

financial statement

Total

KRW billion

74,071

69,754

81,131

Distribution of

Economic Value

(Separate)

Dividends

(Shareholders and investors)

KRW billion

1,054

786

1,301

Interest expenses

(Shareholders and investors)

KRW billion

111

124

Refer to “financial income and

financial expense” in the notes to

the financial statement

Salaries

(Employees)

KRW billion

6,527

6,190

6,392

Refer to “classification of expenses

by nature” in the notes to the

financial statement

Raw materials costs

(Suppliers)

KRW billion

32,333

32,803

37,011

Refer to “classification of expenses

by nature (raw material and

product usage amount)” in the

notes to the financial statement

Income tax

(Government)

KRW billion

422

(0.1)

344

Refer to “income tax” in the notes

to the financial statement

Donation

(Local communities)

KRW billion

Refer to “other income/expense” in

the notes to the financial statement

Total

KRW billion

40,495

39,955

45,173

R&D

Investment

Total R&D expense

KRW million

3,038,920

3,108,591

3,100,111

Government subsidy

KRW million

(17,237)

(11,530)

(2,214)

R&D expense to sales ratio

2.9%

3.0%

2.6%

Total R&D expenses/sales of the

year X 100

Distribution

of Investment

(Consolidated)

CAPEX

KRW billion

3,903

4,553

3,767

Based on head office and overseas

business sites

Depreciation

KRW billion

3,832

4,185

4,556

Refer to “classification of expenses

by nature” in the notes to the

consolidated financial statements

Difference (CAPEX – depreciation)

KRW billion

368

(789)

Treasury stock buyback

KRW billion

458

303

305

Total (dividend + treasury stock)

KRW billion

1,512

1,089

1,606

ENVIRONMENTAL

Classification

Unit

2019

2020

2021

Note

Environmental

Energy

Consumption

Non-renewable energy

MWh

7,623,321

6,721,292

6,049,568

Renewable energy

MWh

57,170

70,376

120,171

Total

MWh

7,680,491

6,791,668

6,169,739

Energy

Intensity

Energy consumption in producing one

vehicle

MWh/

vehicle

1.71

1.82

1.59

Greenhouse

Gas (GHG)

Emissions

Scope 1

tCO

-eq

807,498

716,237

723,966

Scope 2

tCO

-eq

1,897,885

1,680,079

1,660,238

Scope 1 + 2

tCO

-eq

2,705,383

2,396, 316

2,384,204

Scope 3

tCO

-eq

120,382,017

100,536,484

101,790,794

GHG Emissions

Intensity

GHG emissions in producing one

vehicle (Scope 1+2)

tCO

-eq/

vehicle

0.603

0.642

0.616

Raw

Materials

Steel (amounts used)

Ton

968,630

940,277

1,041,124

Steel (scrap)

Ton

430,389

357,494

375,924

Aluminum (amounts used)

Ton

101,966

90,836

97,805

Aluminum (scrap)

Ton

27,661

25,471

24,495

Environmental

Responsibility

Water

Consumption

Withdrawal

Municipal (Industrial)

water withdrawal

(or from other water

utilities)

Ton

20,563,832

18,049,200

16,461,252

Fresh surface water

withdrawal (lakes,

rivers, etc.)

Ton

540,281

761,644

853,340

Fresh ground water

withdrawal

Ton

316,703

229,871

225,861

Total

Ton

21,420,816

19,040,715

17,540,453

Consumption

Ton

11,770,200

10,307,878

9,275,209

Discharge

Ton

9,650,616

8,732,837

8,265,244

VOC Emissions

Emissions

Ton

10,944

11,047

10,756

Air Pollutant

Total

Ton

1,405

936

1,211

By type

Ton

538

358

489

SOx

Ton

NOx

Ton

492

333

351

Ton

361

214

249

Others

Ton

he calculation criteria were partially changed to result in changes to emissions of previous years (Refer to page 14)

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Classification

Unit

2019

2020

2021

Note

Environmental

Responsibility

Water

Pollutants

Total

435,473

289,487

296,321

By type

COD

236,217

134,930

126,462

BOD

14,835

13,451

9,637

39,783

24,751

29,320

n-H

959

690

525

Others

143,679

115,665

130,377

Weight of

Waste

Total

Ton

633,300

498,318

538,772

By type

General

waste

Ton

593,453

462,422

504,182

Designated

waste

Ton

39,847

35,895

34,590

Weight of

Waste by

Disposal

Method

Total

Ton

633,300

498,318

538,772

- Landfill

Ton

14,574

6,297

5,900

- Incineration

Ton

35,708

32,229

33,147

By type

Incinerated

amount

collected

as thermal

energy

Ton

3,626

2,532

3,754

Incinerated

amount not

collected

as thermal

energy

Ton

32,082

29,699

29,392

- Recycling

Ton

576,766

455,211

492,787

- Biodegradation

Ton

1,747

962

1,729

- Others

Ton

4,505

3,617

5,210

Neutralization, physicochemical

treatment, emulsion destruction,

solidification, etc.

Weight of Harmful Chemical Substances

Ton

3,170

2,781

2,333

Costs and investments for

environmental protection

KRW billion

337.0

563.3

722.5

Including development expense for

vehicle electrification and facility

investment costs for improving business

environment

(facility investment costs include

the investments on domestic business

sites only)

Green Purchasing

KRW billion

12.1

8.6

6.2

Our green purchasing amounts have

decreased due to expanding imported

tires

SOCIAL

Classification

Unit

2019

2020

2021

Note

Employees

Number of

Employees by

Region

Korea

Person

70,421

72,020

72,496

As of the last business day; and

based on

the number of directly

employed staff

Overseas

Person

50,716

49,383

50,325

- North America

Person

11,191

10,304

15,953

- Europe

Person

9,951

10,014

9,480

- China

Person

14,638

13,159

10,741

- India

Person

9,353

10,106

9,725

- Others

Person

5,583

5,800

4,426

Total

Person

121,137

121,403

122,821

Number of

Employees

by Duty

(Korea)

Management

Person

450

470

476

Research fellow

Person

Research

Person

11,232

11,716

12,502

Office work

Person

12,559

12,716

12,903

Technical/Production/

Maintenance

Person

36,295

36,385

34,754

Sales

Person

5,968

5,798

5,562

Others

Person

3,893

4,912

6,277

Advisor, specially appointed staff for

special duties, temporary staff, etc.

Total

Person

70,421

72,020

72,496

Number of

Employees

by Nationality

(Korea)

ROK

Person

71,922

71,191

16,714 managers

(99.61% of total managers)

Person

33 managers

(0.2% of total managers)

Germany

Person

12 managers

(0.07% of total managers)

China

Person

5 managers

(0.03% of total managers)

Canada

Person

8 managers

(0.05% of total managers)

Number of

Employees

by Gender/

Region

Korea

Person

70,421

72,020

72,496

-Male

Person

66,668

68,014

68,215

-Female

Person

3,753

4,006

4,281

Overseas

Person

50,716

49,383

50,325

-Male

Person

44,593

42,977

43,504

-Female

Person

6,123

6,406

6,821

ESG Magazine

2. Environmental

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4. Governance

5. ESG Factbook

1. Introduction

Classification

Unit

2019

2020

2021

Note

Employees

Number

of Female

Employees

by Region

Female

staff

Korea

Person

3,753

4,006

4,281

North America

Person

1,698

1,811

2,740

Europe

Person

1,436

1,479

1,476

China

Person

2,025

2,040

1,761

India

Person

200

214

242

Others

Person

764

862

602

Total number of

female staff

Person

9,876

10,412

11,102

Female

executives

Korea

Person

North America

Person

Europe

Person

China

Person

India

Person

Others

Person

Total number of

female executives

Person

Percentage of female employees

8.2%

8.6%

9.0%

Total number of female employees /

Total number of employees

Total number of female employees

Person

9,898

10,449

11,102

Number

of Female

Employees

by Position/

Duty

Number of managers in Korea

Person

14,736

15,534

16,779

The scope of managers includes

managerial level and higher office,

research, and special staff, and

executives except for advisors

Number of female managers

in Korea

Person

558

710

1,042

Number of managers overseas

Person

3,491

7,013

7,303

Number of female managers

overseas

Person

552

822

947

Total number of managers

Person

18,227

22,547

24,082

Total number of female managers

Person

1,110

1,532

1,989

Percentage of female managers

6.1%

6.8%

8.3%

Total number of female managers /

Total number of managers

Number of female low level

managers

Person

1,084

1,504

Low level manager: Defined as G2 level

* Began to collect and report data on

low level managers in 2020

Percentage of female low level

managers

6.6%

8.3%

Number of female top level

managers

Person

Percentage of female top level

managers

5.4%

5.8%

Classification

Unit

2019

2020

2021

Note

Employees

Number

of Female

Employees

by Position/

Duty

Number of female

employees in revenue-

generating departments/

positions

Person

8,500

9,182

Revenue generating departments:

Product/R&D/Purchasing/Quality

Division, Pilot Center, Manufacturing

Area, Ulsan/Asan/Jeonju Plant, Global

Business Management Division,

Domestic Business/Customer

Experience/Commercial/ICT Division,

Innovation Division, AIRS Company,

AAM Division, CDO, EV Division, Genesis

Division

* Began to collect and report employee

data on revenue generating

department in 2020

Percentage of female

employees in revenue-

generating departments/

positions

7.4%

7.9%

Number of female employees

in STEM positions

* STEM: Science, Technology,

Engineering and Mathematics

Person

509

1,577

STEM employees: R&D Division,

Innovation Division, AAM Division,

TaaS Division, Ulsan/Asan/Jeonju

Pant, Advanced Technology Institute,

Manufacturing /Quality/Purchasing/

India Regional Headquarters, CDO, EV

Division, Pilot Center, ICT Division

* Began to collect and report employee

data on STEM position in 2020

Percentage of female

employees in STEM positions

4.0%

9.0%

Employees

with

Disabilities

(Korea)

Number of employees

with disabilities

Person

2,076

2,108

2,101

Percentage of employees

with disabilities

2.95%

3.12%

3.13%

Number of employees with disabilities /

Total number of employees * 100

Based on the reported number in

December (Korea Employment Agency

for Persons with Disabilities)

Number of

Employees

by Age

(Korea)

Under 30 years old

Person

6,638

7,147

7,516

30-50 years old

Person

32,260

32,114

32,948

Over 50 years old

Person

31,523

32,759

32,032

Total

Person

70,421

72,020

72,496

Labor Union

Membership

(Korea)

Number of people with

labor union membership

Person

49,641

48,933

47,538

Labor union membership

percentage

70.7%

68.2%

66.3%

Total Number of Strikes

Case

Number of Days of Work Loss Due to Strikes

Day

ESG Magazine

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4. Governance

5. ESG Factbook

1. Introduction

Classification

Unit

2019

2020

2021

Note

Employees

Employee

Training

(Korea)

Total training expenses

KRW billion

26.3

29.0

41.7

Training expenses per employee

KRW 10,000

43.3

60.3

Total training expense /

Total number of employees

Training

expense per

employee

Super

administrator

KRW 10,000

293.8

161.8

Total training expense by position /

Number of employees by position

* Began to collect and report training

expense by position in 2020

(by position)

Middle manager

KRW 10,000

49.7

98.3

New

employees and

non-managers

KRW 10,000

41.0

56.7

Training

expense per

employee

Male

KRW 10,000

59.5

(by gender)

Female

KRW 10,000

72.9

Training

expense per

employee

Under 30 years old

KRW 10,000

134.0

(by age)

30-50 years old

KRW 10,000

72.5

Over 50 years old

KRW 10,000

41.5

Training hours per employee

Hour

19.8

27.9

Total training hours provided to

employees / Total number of employees

Training

hours per

employee

(by position)

Super

administrator

Hour

108.5

29.2

Total training hours by position /

Number of employees by position

* Began to collect and report training

hours by position in 2020

Middle manager

Hour

42.5

35.9

New

employees and

non-managers

Hour

17.4

27.3

Training

hours per

employee

Male

Hour

27.5

(by gender)

Female

Hour

34.4

Training

hours per

employee

(by age)

Under 30 years old

Hour

75.6

30-50 years old

Hour

30.7

Over 50 years old

Hour

20.5

Parental

Leave

(Korea)

Number of employees on parental

leave (Male)

Person

138

171

188

Number of employees on parental

leave (Female)

Person

142

162

Return-to-work rate after parental

leave (Male)

91.2%

92.4%

89.5%

Return-to-work rate after parental

leave (Female)

92.2%

98.6%

92.6%

Retention rate after parental leave

(Male)

88.3%

97.3%

97.6%

Retention rate after parental leave

(Female)

93.1%

91.7%

98.6%

Classification

Unit

2019

2020

2021

Note

Employees

New

Employee

Hires

(Korea)

Number of people hired

Person

4,805

7,096

7,530

Gender

Male

Person

6,529

6,765

(Position) Excluding RPA

* Began to collect and report data on

the status of new hires (gender, age,

nationality) in 2020

Female

Person

567

765

Age

Under 30

years old

Person

3,820

4,466

30-50 years

old

Person

1,983

1,350

Over 50 years

old

Person

1,293

1,714

Nationality

Korea

Person

7,076

7,490

France

Person

Canada

Person

China

Person

Austria

Person

U.K.

Person

Belgium

Person

U.S.

Person

Germany

Person

Republic of

South Africa

Person

Internal Recruitment Ratio

99.9%

99.3%

99.0%

Placement-to-vacancy ratio that reflects

internal recruit and transfer

Youth Interns

Hired

Total number of hired people

Person

132

213

Basis of employment: Intern / Research

intern / Recruitment-type intern /

Experience-based intern

* Began to collect and report data on

youth internship employment data in

2020

Full-time conversion rate

30.3%

53.1%

Number of personnel converted to

regular employment: 113

ESG Magazine

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3. Social

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5. ESG Factbook

1. Introduction

Classification

Unit

2019

2020

2021

Note

Employees

Employee

Turnover

Gender

Male

4.20%

9.48%

Began to collect and report turnover

rate (gender, age, position) data in 2020

Include overseas employee turnover rate

(gender, age, position) data since 2021

Turnover by nationality in 2021 (Korea):

Korea 4,037 / U.S. 3 / China 4 / Canada 1

/ Taiwan 2

Female

0.20%

1.16%

Age

Under 30

years old

0.60%

3.85%

30-50

years old

0.40%

3.81%

Over 50

years old

3.50%

2.97%

Position

Super

administrator

0.00%

0.04%

Middle

manager

0.01%

0.17%

Non-manager

3.83%

9.62%

Turnover rate

3.85%

4.42%

10.6%

12,672 persons / 119,068 persons at the

beginning of the year

* Began to include overseas employee

turnover rate data in 2021, which led

to a year-on-year increase of turnover

rate and voluntary turnover rate

Voluntary turnover rate

0.66%

0.43%

4.95%

5,897 persons / 119,068 persons at the

beginning of the year

* Voluntary turnover refers to the case

when employees voluntarily leave

their positions for reasons other than

retirement, dismissal, etc.

Organizational

Culture Survey

Employee engagement rate

64.0%

66.6%

68.5%

Welfare

Program

Whether family-friendly certification was

obtained

Yes

* Family-friendly certification:

A company that sets an example in

operating a family-friendly system

that received certification from the

Minister of Gender Equality and

Family. Hyundai was first designated

in December 2014.

Classification

Unit

2019

2020

2021

Note

Social

Contributions

Social

Contributions

Expenditur

by Type

Cash donations

KRW million

47,508

50,639

39,015

In-kind contributions

KRW million

1,399

2,739

2,123

Employee volunteer

KRW million

4,408

451

696

Monetary value conversion of

employees’ volunteer hours

Management overhead

KRW million

14,571

9,008

6,124

Expenditure

by Social

Contribution

Area

Local community

investment

KRW million

47,754

44,880

37,054

Simple donation

KRW million

2,983

8,498

3,658

For commercial use

KRW million

12,740

9,007

6,549

Employees

Volunteering

(Korea)

Number of volunteer

activities

Case

2,815

859

375

Reduced face-to-face volunteer

activities due to COVID-19

Number of participants

Person

26,933

3,107

6,330

Number of hours

participated

Hour

93,798

10,420

14,034

Social

Contribution

Expenditure

Domestic

KRW

63,477,846,204

62,386,444,546

47,262,047,830

Overseas

USD

27,263,537

34,111,984

16,288,622

Expenditure

by Donation/

Contribution

Type

Associations and tax-free

groups (think tank, etc.)

KRW million

7,081

6,208

6,251

Lobbyist and interest

groups

KRW million

Political donations

KRW million

Others

KRW million

Total donations/

contributions

KRW million

7,081

6,208

6,251

Expenditure

by Major

Contributed

Association

Foundation of Korea

Automotive Parts Industry

Promotion

KRW million

3,300

Korea Automobile

Manufacturers

Association

KRW million

1,948

2,146

2,243

Korea Automotive

Technology Institute

KRW million

314

328

322

H2Korea

KRW million

200

237

200

Korea Traffic Disabled

Association

KRW million

110

100

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Classification

Unit

2019

2020

2021

Note

Quality and

Safety

Quality Index

(based on

the survey

conducted

by J.D.

Power and

Associates)

U.S. Vehicle Dependability

Study (Hyundai)

Ranking (Score)

Non-premium 5th

(124)

Non-premium 7th

(132)

Non-premium 4th

(101)

Based on non-premium brand

U.S. Initial Quality Study

(Hyundai)

Ranking (Score)

Non-premium 2nd

(71)

Non-premium 9th

(153)

Non-premium 6th

(149)

U.S. Vehicle Dependability

Study (Genesis)

Ranking (Score)

Premium 1st (89)

Premium 4th (102)

Based on premium brand

U.S. Initial Quality Study

(Genesis)

Ranking (Score)

Premium 1st (63)

Premium 1st (89)

Premium 2nd (148)

Quality

Management

System

Quality Management

System Certification

100%

All business sites in Korea and

overseas are ISO 9001 certified

Customer

Satisfaction

Survey

Customer Satisfaction

Score Hyundai Customer

Experience Index (HCXI)

Score

78.8

71.6

71.2

Domestic Maintenance

Service Satisfaction (HCXI)

Score (Rank)

81.4 (3rd place)

69.7 (1st place)

70.1 (1st place)

Changed survey method in 2020

(face-to-face → online non-face-to-

face)

Overseas Sales Customer

Satisfaction

Score (Country of

Implementation)

89.7

(22 countries)

90.3

(26 countries)

86.3 based on sales

NPS (31 countries)

Changed management index in

2021 (SSi → Sales NPS)

Overseas Maintenance

Service Satisfaction

Score (Country of

Implementation)

90.1

(23 countries)

90.3

(29 countries)

75.9 based on service

NPS (31 countries)

Changed management index in

2021 (HCXI → Service NPS)

External evaluation –

National Customer

Satisfaction Index (NCSI)

Ranking

1st place at all

segments

1st place at all

segments

1st place at all

segments

Semi-medium, medium, semi-

large, large, RV

External evaluation –

Korean Standard-Quality

Excellence Index (KS-QEI)

Ranking

1st place at all

segments

1st place at all

segments

1st place at all

segments

Semi-medium/large/medium

passenger, small/semi-medium/

medium/large SUV, electric vehicle,

automobile AS, large luxury SUV/

luxury sedan D-segment/luxury

E-segment

External evaluation

– Korean Customer

Satisfaction Index (KCSI)

Ranking

1st place at all

segments

1st place at all

segments

1st place at all

segments

Passenger vehicle, RV

Safety and

Health

Number of employees involved in

occupational accidents (Korea)

Person

377

351

424

Accident rate (Korea)

0.93%

0.85%

0.73%

Number of employees involved in

occupational accidents (Overseas)

Person

Accident rate (Overseas)

0.08%

0.05%

0.04%

Number of employees involved in

occupational accidents (Total)

Person

395

368

435

108 cases of work-related illness,

and zero work-related death

Accident rate (Total)

0.64%

0.50%

0.49%

GOVERNANCE

Classification

Unit

2019

2020

2021

Note

Compliance/

Ethical

Training

Number of training sessions (Korea)

Case

Number of participants (Korea)

Person

22,362

22,928

21,567

Number of training sessions (Overseas)

Case

Number of participants (Overseas)

Person

842

816

Non-

compliance

with

Regulations

and Voluntary

Codes

Number of

personal

information

leakage

incidents

Number of incident reports

received directly by Hyundai

Case

Number of incident reports

received from regulatory

authorities

Case

Number of incident reports

received from other third-

party organizations

Case

Number of cyber asset damage incidents

Case

Number of labeling/advertising violations

Case

Penalty and fine for non-compliance with

environmental regulations

KRW billion

0 cases in 2018Based on a major

environment-related fine of at least

$ 10,000

Penalty and fine in relation to anti-trust/

unfair competition

KRW billion

Number of anti-corruption/bribery violations

Case

Classification

Unit

2019

2020

2021

Note

Safety and

Health

Lost Time Injuries Frequency Rate

(LTIFR) of Employees (Korea)

3.18

3.07

2.55

LTIFR: Number of lost-time injuries

per million hours worked during an

accounting period (Based on figures of

the Ulsan, Asan and Jeonju plants and

research center in Korea, and overseas

manufacturing plants) Number of

injuries that prevent workers from

recovering to the same state before the

accident within six months: 89 cases

LTIFR of Employees (Overseas)

0.33

0.17

0.21

LTIFR of Employees (Total)

2.09

1.72

1.76

LTIFR of Suppliers (Korea)

5.16

8.43

1.36

LTIFR of Suppliers (Overseas)

0.22

0.11

0.00

LTIFR of Suppliers (Total)

0.92

0.93

0.89

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

ESG Certifications

Certification Status by Business Site

Classification

Term of validity

Note

ISO 14001

(Environmental Management)

Domestic sites

2020-2023

Integrated certification in 2014

Hyundai Motor Manufacturing Alabama (HMMA)

2021-2024

Beijing Hyundai Motor Company (BHMC)

2021-2024

Hyundai Motor India (HMI)

2020-2023

Hyundai Motor Manufacturing Russia (HMMR)

2019-2022

Hyundai Motor Brasil (HMB)

2021-2024

Hyundai Motor Manufacturing Czech (HMMC)

2021-2024

Hyundai Assan Otomotiv Sanayi (HAOS)

2021-2024

Hyundai Truck & Bus (China) (HTBC)

2020-2023

ISO 45001

(Health and Safety Management)

Business site in Korea (Headquarters, Asan/Jeonju Plant, Research Center, etc.)

2018-2021

Evaluation for the year is in progress

Business site in Korea (Ulsan Plant)

2022-2025

ISO 27001

(Information Security Management)

Business site in Korea

2021-2024

ISO 9001

(Quality Management)

Business site in Korea and abroad

2021-2024

ISO 50001

(Energy Management)

Beijing Hyundai Motor Company (BHMC)

2022-2025 (Renhe/Yangzhen Plants)

2021-2024 (Changzhou Plant)

Hyundai Motor India (HMI)

2021-2024

Hyundai Assan Otomotiv Sanayi (HAOS)

2021-2024

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

GRI Index

Topic Specific Standards _ Material Topics

GRI Standards

Page

Note

No.

Core

Title

Carbon Neutrality

& Expansion of

Renewable Energy

103-1

Explanation of the material topic and its Boundary

14-25, 94-96,

4-14 (ESG Magazine)

103-2

The management approach and its components

103-3

Evaluation of the management approach

Technological

Innovation

103-1

Explanation of the material topic and its Boundary

17-20, 94-96,

15-18 (ESG Magazine)

103-2

The management approach and its components

103-3

Evaluation of the management approach

Supply

Chain ESG

103-1

Explanation of the material topic and its Boundary

45-47, 94-96

103-2

The management approach and its components

103-3

Evaluation of the management approach

414-2

Negative social impacts in the supply chain and actions taken

46-47

Universal Standards

GRI Standards

Page

Note

No.

Core

Title

102-01

Core

Name of the organization

103

102-02

Core

Activities, brands, products, and services

102-03

Core

Location of headquarters

103

102-04

Core

Location of operations

103

102-05

Core

Ownership and legal form

64-70

Business report

102-06

Core

Markets served

77-78

102-07

Core

Scale of the organization

77-78

102-08

Core

Information on employees and other workers

81-83

102-09

Core

Supply chain

102-10

Core

Significant changes to the organization and its supply chain

No significant changes

102-11

Core

Precautionary Principle or approach

73-74

102-12

Core

External initiatives

103

Participating in UN Global

Compact

102-13

Core

Membership of associations

102-14

Core

Statement from senior decision-maker

102-15

Key impacts, risks, and opportunities

95-96

102-16

Core

Values, principles, standards, and norms of behavior

Corporate principle

Website

102-17

Mechanisms for advice and concerns about ethics

71-72

102-18

Core

Governance structure

64-70

102-21

Consulting stakeholders on economic, environmental, and social topics

102-22

Composition of the highest governance body and its committees

67-69

102-23

Chair of the highest governance body

102-29

Identifying and managing economic, environmental, and social impacts

65-66

102-35

Remuneration policies

102-38

Annual total compensation ratio

102-40

Core

List of stakeholder groups

102-41

Core

Collective bargaining agreements

102-42

Core

Identifying and selecting stakeholders

102-43

Core

Approach to stakeholder engagement

GRI Standards

Page

Note

No.

Core

Title

102-44

Core

Key topics and concerns raised

102-45

Core

Entities included in the consolidated financial statements

Business report

102-46

Core

Defining report content and topic Boundaries

95-96

102-47

Core

List of material topics

102-48

Core

Restatements of information

102-49

Core

Changes in reporting

No significant changes

102-50

Core

Reporting period

103

102-51

Core

Date of most recent report

103

102-52

Core

Reporting cycle

103

102-53

Core

Contact point for questions regarding the report

103

102-54

Core

Claims of reporting in accordance with the GRI Standards

103

102-55

Core

GRI content index

87-88

102-56

Core

External assurance

97-102

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Topic Specific Standards _ Non Material Topics

GRI Standards

Page

Note

Indicator No.

Title

201-1

Direct economic value generated and distributed

205-2

Communication and training about anti-corruption policies

and procedures

71-72

205-3

Confirmed incidents of corruption and actions taken

206-1

Legal actions for anti-competitive behavior, anti-trust,

and monopoly practices

71-72

301-1

Materials used by weight or volume

28,80

302-1

Energy consumption within the organization

28,80

302-3

Energy intensity

28,80

302-4

Reduction of energy consumption

28,80

303-3

Water withdrawal by source

28,80

303-4

Water discharge

303-5

Water consumption

28,80

305-1

Direct (Scope 1) GHG emissions

14,28,80

305-2

Energy indirect (Scope 2) GHG emissions

14,28,80

305-3

Other indirect (Scope 3) GHG emissions

14,80

305-4

GHG emissions intensity

14,80

305-5

Reduction of GHG emissions

14-25

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant

air emissions

28,80

307-2

Non-compliance with environmental laws and regulations

86,91

No cases of violation of laws

308-1

New suppliers that were screened using environmental criteria

401-1

New employee hires and employee turnover

83-84

GRI Standards

Page

Note

Indicator No.

Title

401-2

Benefits provided to full-time employees that are not provided to

temporary or part-time employees

35-37

401-3

Parental leave

37,83

403-2

Types of injury and rates of injury, occupational diseases, lost days,

and absenteeism, and number of work-related fatalities

403-3

Workers with high incidence or high risk of diseases related to

their occupation

83,92

Overviewed on-site risk factors

by operating Hyundai-Safety

Assessment Tool (H-SAT)

404-1

Average hours of training per year per employee

404-2

Programs for upgrading employee skills and

transition assistance programs

33-34

406-1

Incidents of discrimination and corrective actions taken

407-1

Operations and suppliers in which the right to freedom of association

and collective bargaining may be at risk

No business sites and suppliers at

significant risk identified

408-1

Operations and suppliers at significant risk for incidents of child labor

41,92

No business sites and suppliers at

significant risk identified

409-1

Operations and suppliers at significant risk for incidents of forced or

compulsory labor

41,92

No business sites and suppliers at

significant risk identified

411-1

Incidents of violations involving rights of indigenous peoples

No incidents of violations occurred

412-2

Employee training on human rights policies or procedures

34,41

413-1

Operations with local community engagement, impact assessments,

and development programs

415-1

Political contributions

No political contributions made

416-1

Assessment of the health and safety impacts of product

and service categories

Vehicle collision safety evaluated

by Insurance Institute for Highway

Safety in 2022

417-1

Requirements for product and service information and labeling

418-1

Substantiated complaints concerning breaches of customer privacy

and losses of customer data

Received one complaint from

regulatory authorities (was

finalized by agreement between

the parties before proceeding

mediation), no other complaints

from outside institution

419-1

Non-compliance with laws and regulations in the social

and economic area

85,91

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

TCFD Index

Disclosure Focus Area

Title

Page

Note

Governance

Describe the board’s oversight of climate-related risks and opportunities.

6, 11

Report to Sustainability Management Committee of the BOD and review thereof (once/semi-annually)

CDP 2022 questions: C1.1b

Describe management’s role in assessing and managing climate-related risks and opportunities.

6, 11

Operation of the ESG Committee, a subcommittee under the Hyundai Business

Strategy Meeting

(hosted by the CEO)

CDP 2022 questions: C1.2, C1.2a

questions

Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

11-13

CDP 2022 questions: C2.1a, C2.2a, C2.3, C2.3a, C2.4, C2.4a

Describe the impact of climate related risks and opportunities on the organization’s businesses, strategy, and financial planning.

12-13

CDP 2022 questions: C2.3a, C2.4a, C3.1, C3.3, C3.4, C3.5, C3.5a

Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a

2°C or lower scenario.

11, 13

CDP 2022 questions: C3.2, C3.2a, C3.2b

Risk Management

Describe the organization’s processes for identifying and assessing climate-related risks.

11, 13

CDP 2022 questions: C2.1, C2.1a, C2.1b, C2.2, C2.2a

Describe the organization’s processes for managing climate-related risks.

CDP 2022 questions: C2.1, C2.1a, C2.1b, C2.2

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s

overall risk management.

6, 11

CDP 2022 questions: C2.1, C2.2, C3.3, C3.4

Metrics and Targets

Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk

management process.

14, 17, 19, 79, 80

Energy consumption, vehicle production and sales status, vehicle CO

emissions, sales, etc.

CDP 2022 questions: C8.2, C8.2a, C8.2b, C8.2c, C8.2d, C11.3a

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

14, 80

CDP 2022 questions: C6.1, C6.2, C6.3, C6.5, C7.1a, C7.2, C7.3b, C7.5, C7.6b

Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

15, 17, 22

CDP 2022 questions: C4.1, C4.1a, C4.2, C4.2a, C4.2c

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

SASB Index

Accounting Metric

Page

Note

Product Safety

TR-AU-250a.1

Percentage of vehicle models rated by NCAP

programs with an overall 5-star safety rating,

by region

Korea: 100%, U.S.: 90.5%

Classification

Percentage

Vehicle models rated 5-star

Korea

100%

STARIA, IONIQ 5, Tucson

U.S.

90.50%

Tucson, Elantra, Palisade, Kona, Santa Fe, Sonata (N-Line, Hybrid, FWD, AWD), G80, GV80 (RWD, AWD)

TR-AU-250a.2

Number of safety-related defect complaints,

percentage investigated

Constant monitoring of customer complaints and 100% voluntary recall immediately when potential issues are recognized to customers of Ministry of Land, Infrastructure and

Transport (Korea), NHTSA (U.S. Department of Transportation’s National Highway Traffic Safety Administration)

TR-AU-250a.3

Number of vehicles recalled

2021: 2.72 million vehicles (voluntary recall)

Labor Practices

TR-AU-310a.1

Percentage of active workforce covered under

collective bargaining agreements

2021: 66.3% (domestic basis)

TR-AU-310a.2

(1) Number of work stoppages,

(2) Total days idle

2021: No strike history of more than 1,000 people taking a break from work (domestic and overseas)

Fuel Economy & Use-

phase Emissions

TR-AU-410a.1

Sales-weighted average passenger fleet fuel

economy, by region

EU average passenger fleet carbon emissions, China/U.S. average fleet fuel economy

2018

2019

2020

2021

Average fleet carbon emissions in EU (g/km)

124.3

123.5

94.7

109.7

Average fleet fuel economy in China (L/100km)

6.28

6.00

5.61

6.15

Average fleet fuel economy in U.S. (mpg)

Passenger car

38.5

40.0

42.8

Light truck

27.2

27.1

29.4

30.9

TR-AU-410a.2

Number of

(1) zero emission vehicles (ZEV),

(2) hybrid vehicles, and

(3) plug-in hybrid vehicles sold

Number of electrified vehicles sold in 2021 and percentage thereof (Unit: 1,000)

(Unit: 1,000)

Classification

HEV/PHEV

FCEV

Total

Global

272(7%)

141(3.6%)

9(0.2%)

422(10.8%)

TR-AU-410a.3

Discussion of strategy for managing fleet fuel

economy and emissions risks and opportunities

20-21

Increase sales of electrified vehicles and promote fuel efficiency improvement of internal combustion engines

Materials Sourcing

TR-AU-440a.1

Management of risks related to use of

main materials

27, 46

The materials for electric vehicle batteries including rare metals such as nickel, cobalt and lithium have limited reserves in several developing countries, such as Southeast

Asia, Africa, and South America, which may trigger risky issues of human rights and environmental violations, not to mention the unstable supply/demand and high risk of price

fluctuations. Hyundai asks its suppliers to act with responsibility when sourcing minerals. Furthermore, Hyundai had established the second life EV battery circulation process as

part of its risk management of rare metals and is trying to recycle the valuable metals such as cobalt, nickel and lithium through this process.

Materials Efficiency &

Recycling

TR-AU-440b.1

Total amount of waste from manufacturing,

percentage recycled

28, 81

Weigh of waste discharged at Hyundai business sites in 2021 was 538,772 tons, 91.5% of which was recycled.

TR-AU-440b.2

Weight (ton) of end-of-life material recovered,

percentage recycled

Weight of materials reused/used after end-of-life in 2021 was around 195,000 tons.

End-of-life recycling rate in 2021 was 82.6% excluding heat recovery, 92% including heat recovery.

TR-AU-440b.3

Average recyclability of vehicles sold

Recyclability: 82.6% (92%, when including waste energy recovery)

Activity Metrics

TR-AU-000.A

Number of vehicles manufactured

TR-AU-000.B

Number of vehicles sold

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

WEF IBC Stakeholder Capitalism Metrics

Theme

Metrics

Page

Note

Governing Purpose

Setting purpose

3, 5

We are continuously making sincere efforts to pursue the creation of economic value by continually securing a competitive edge, realization of customer value through quality management, and creation of social value through corporate citizenship.

Quality of Governing

Body

Governance body

composition

64-66

The BOD consists of 5 directors and 6 independent directors (including 1 female director). Among the members of the BOD, the independent director in charge of protecting shareholder rights (Independent Director Chi-won Yoon) participates in meetings

with domestic investors and corporate briefings for overseas investors in aim of strengthening communications between the BOD and shareholders, and strives to improve our shareholder values. In order to faithfully perform the duties of the independent

director, taking concurrent positions as a director, executive officer, or auditor of two or more other companies is prohibited. In order to prevent conflicts of interest, it is not allowed to engage in transactions in nature of the company's business activities

without obtaining a prior approval from the BOD, or to become a general partner or director of other companies in the same industry.

Composition of the BOD

Classification

Name

Title

Career

Date of Appointment

Gender

Nationality

Internal

Directors

Euisun Chung

Executive Chair

Currently Executive Chairman of Hyundai Motor Group

March 12, 2010

Male

Korea

JaeHoon Chang

President & CEO

Currently President & CEO of HMC, President of Genesis Division

March 24, 2021

Male

Korea

Dong Seock Lee

Vice President & CEO

Currently Executive Vice President and CSO of Domestic Productions

March 24, 2022

Male

Korea

Chung Kook Park

Executive President

Currently President and Head of HMC R&D Division

March 24, 2022

Male

Korea

Gang Hyun Seo

Executive Vice President

Currently Executive Vice President of HMC Planning & Finance Division

March 24, 2022

Male

Korea

Independent

Directors

Eun Soo Choi

Indepen-dent Director

Currently General Counsel of The Kim Law Firm

Former President of Daejeon High Court and Patent Court

March 17, 2017

Male

Korea

Chi-Won Yoon

Indepen-dent Director

Currently Chairman of EQONEX

Former Vice Chairman of UBS Wealth Management

March 22, 2019

Male

Korea

Eugene M. Ohr

Indepen-dent Director

Former Partner of Capital International Inc.

March 22, 2019

Male

Korea

Sang-Seung Yi

Indepen-dent Director

Currently Professor of Economics, Seoul National University

Former Chairman, Korea Academic Society of Industrial Organization

March 22, 2019

Male

Korea

Dal Hoon Shim

Indepen-dent Director

Currently Representative of Woorin Tax Partners

Former Head of NTS Jungbu Regional Office

March 24, 2021

Male

Korea

Ji Yun Lee

Indepen-dent Director

Currently Assistant Professor, Department of Aerospace Engineering of KAIST

Former Director of American Society of Navigation

March 24, 2021

Female

Korea

* As of June 1, 2022

Stakeholder

Engagement

Material issues

impacting

stakeholders

95-96

In order to identify material sustainability management issues that impact Hyundai's stakeholders, we performed a materiality analysis in target of Hyundai employees and outside sustainability management experts.

Ethical Behavior

Anti-corruption

71-72, 85

Reports on unfair and corrupted acts are submitted and processed through the Cyber Audit Office. Additionally, we provide compliance management and ethics trainings to raise our members’ compliance awareness and to build an ethical compliance culture.

Ethics Standard Training

Non-compliance with Regulations and Voluntary Codes

Number of training sessions (Case)

Number of participants (Person)

Legal sanction against

the violation of fair trade

Penalty and fine for

non-compliance with

environmental regulations

Violation of advertising

regulations

Number of personal

information breaches

Domestic

Overseas

Domestic

Overseas

21,567

Protected

ethics advice

and reporting

mechanisms

40-41, 71-72

Through a regular half-yearly audit and frequent audits every year, we examine the status of employees’ practice of the Code of Ethics, and report the results to the BOD’s Sustainability Management Committee.

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Theme

Metrics

Page

Note

Risk and

Opportunity Oversight

Integrating risk and

opportunity into

business process

12-13, 73-74,

95-96

By identifying regional/organizational issues on climate change issues, we evaluated the impacts of each factor affecting the company in aim of establishing a decent, company-wide response strategy. In addition, we carried out a materiality analysis to

disclose the directions for management directions for each major issue, key performance and mid- to long-term plans.

Climate

Change

Greenhouse gas (GHG)

emissions

14-15, 28, 80,

99-102

We disclose the total greenhouse gas emissions occurring from all domestic business sites and 8 overseas subsidiaries.

Greenhouse gas emissions (Scope 1+2, tCO

-eq): 2,384,204

Emissions for a total of 11 categories (6 upstream and 5 downstream) are disclosed.

Greenhouse gas emissions (Scope 3, tCO

-eq): 101,790,794

TCFD implementation

Details of all recommendations in the TCFD Index can be found in the Sustainability Report and the Carbon Disclosure Project (CDP).

Nature Loss

Land use and

ecological sensitivity

There is no business site located adjacent to the Biodiversity Area (KBA).

Freshwater

Availability

Water consumption

and withdrawal in

water-stressed areas

28, 80

Hyundai Motor India and Hyundai Assan Otomotive Sanayi (Turkey plant) locate in areas of extreme water stress in the WRI Aqueduct water risk atlas tool.

HMI & HAOS

Volume of water withdrawal (Ton)

Volume of water consumption (Ton)

Rate of water withdrawal

Rate of water consumption

1,472,853

1,198,053

8.4%

12.9%

Dignity a

nd Equality

Diversity and Inclusion

81-83

Data on employees by age, female employees, employment status of the disabled is disclosed in the Sustainability Report.

Pay equality

The average remuneration per person is disclosed in the Sustainability Report.

BOD Compensation

(Unit: KRW million)

Classification

CEO

Non-executive Director

Board member

Employee

Ratio of CEO’s compensation to an employee’s

Average compensation per person

977

102

1,339

10.17 times

CEO : Based on President and CEO Jaehoon Chang

Employee: All employees excluding registered executives (non-registered executives and employees)

***

Detailed information is available in our 2021 Business Report. It can be accessed on the Data Analysis, Retrieval and Transfer System of the Financial Supervisory Service

Wage level

Risk for incidents

of child, forced or

compulsory labor

There are no business sites or suppliers with a high risk of child/forced labor.

Health

and Well-being

Health and safety

The number of industrial accident victim, industrial accident rate, work loss rate and occupational disease rate are disclosed in the sustainability report.

Occupational Accidents

LTIFR & OIFR

Classification

Number of occupational accidents (Person)

Accident rate (%)

Classification

LTIFR

OIFR

Korea

424

0.73%

Employees (Domestic)

2.55

0.87

Overseas

0.04%

Employees (Overseas)

0.21

0.0

Total

435

0.49%

Employees (Total)

1.76

0.58

Suppliers (Domestic)

1.36

Suppliers (Overseas)

0.0

Suppliers (Total)

0.89

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Theme

Metrics

Page

Note

Skills for the Future

Training Provided

The status of employee training (training hours by position, training expense) is disclosed in the Sustainability Report.

Employee Training

Total training expenses

KRW billion

41.7

Training expenses per employee

KRW 10,000

60.3

Training expense per employee (by position)

Super administrator

KRW 10,000

161.8

Middle manager

KRW 10,000

98.3

New employees and non-managers

KRW 10,000

56.7

Training hours per employee

Hour

27.9

Training hours per employee (by position)

Super administrator

Hour

29.3

Middle manager

Hour

35.9

New employees and non-managers

Hour

27.3

Employment

and Wealth

Generation

Absolute number

and rate of

employment

83-84

The number of new domestic employees and the turnover rate are disclosed in the Sustainability Report.

Economic

contribution

79-80

Sales and financial information, R&D expenses (details of the company’s investments and government subsidies), information on economic values distributed are disclosed in the Sustainability Report and the Business Report.

Financial

investment

contribution

Hyundai Motor Company is committed to improving the organization’s successful investment and profitability.

Total Capital Expenditure - Depreciation expense: KRW (789) billion

Buyback of treasury stock + dividend payment: KRW 1,606 billion

Innovation of

Better Products

and Services

Total R&D

expenses

Total R&D expense spent is as follows.

- Total R&D expenses in 2021: KRW 3.1 trillion

- 2021 government subsidy: KRW (2,214) million

Community

and Social Vitality

Total tax paid

Details of corporate income tax are disclosed in the Sustainability Report and business reports.

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1. Introduction

Stakeholder Engagement

Stakeholder Communication

Hyundai makes all efforts to strengthen its communication function across entire areas of business activities. We have categorized our stakeholders into six major groups − customers and dealers, employees, suppliers, local communities, government,

shareholders and investors − and continue to identify and reflect their requirements, and provides a detailed, transparent information regarding our sustainability performance which we have achieved and relevant activities carried out.

Classification

Customers and Dealers

Employees

Suppliers

Local Communities

Government

Shareholders and Investors

Definition of

key stakeholder

groups

•

Dealers deliver Hyundai’s products and

services to customers, while customers

decide on making a purchase based on the

delivered product and service.

•

Employees handle product development,

production, sales as well as all activities that

support the above. Their competencies mean

the company’s competencies.

•

Suppliers provide parts or materials to

Hyundai, enabling the company to produce

quality products. Their quality competitiveness

directly impacts Hyundai’s quality.

•

Local communities refer to residents in

areas located close to our business sites and

global citizens who are influenced by our

activities. Hyundai strives for their sustainable

development.

•

The government enacts laws and regulations

that are related to the automobile industry or

decides on regulation levels on corporations’

business operation, so that it can influence

our business activities.

•

Shareholders and investors provide finance and

capital to the company, so that Hyundai can

maintain growth engines while implementing

diverse strategies or running our business.

Communication

channels

by key stakeholder

groups

•

Motor show and new car launching ceremony

•

Test driving

•

Before Service

•

Customer satisfaction survey

•

Car club

•

On-line (social media)

•

Website

•

Sports sponsorship

•

Dealer events

•

Labor-Management Council

• Employee satisfaction surveys

• Meetings and events

• Grievance handling system

• Occupational Safety and Health Committee

• Work-related education and trainin

•

Win-win growth portal site

•

HMG Partner System

•

Transparent Purchase Practice Center

website

•

Global Win-Win Cooperation Center

(GPC Portal)

•

Seminars and training

•

Social contribution programs

•

Communication with local communities

nearby the company’s business sites

•

Recruitment

•

Family inviting events

•

Public hearings

•

Policy-making discussions and briefings

•

Annual Shareholders Meeting

•

Company briefing

•

IR meetings

•

Sustainability Management Committee

•

Website

Issues of interest

by key stakeholder

groups

•

Expanding the EV lineup

•

Investing in and developing technologies

related to improving the fuel efficiency

of ICEVs

•

Strengthening product safety and quality

management

•

Customer satisfaction

•

Brand image

•

Employee competency building

•

Employee human rights and diversity

•

Organizational culture and evaluation and

compensation

•

Labor-management relations

•

Health and safety in the workplace

•

Supply chain ESG risk management

•

Carbon neutrality & Expansion of renewable

energy

•

Application of eco-friendly materials and

technologies to products

•

Job creation and retention

•

Strategic social contributions

•

Upgrading the system for collecting and

recycling end-of-life vehicles/second life

EV batteries

•

Enhancing business site environment

efficiency

•

Assessing and protecting biodiversity

related to business activities

•

Business ethics

•

Building infrastructure

•

Responding to fuel efficiency regulations

•

Environmental investments, such as

electrified vehicles and renewable energy

power generation facilities

•

Strengthening ESG governance roles

•

Improving economic performance

•

Innovation

•

Protecting shareholder rights

•

BOD operation

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1. Introduction

Materiality Analysis

Materiality Analysis Process

Hyundai conducted a 5-step sustainability management materiality analysis to identify major reportable issues and to organize the content of each issue.

Priority level of each issue was determined by impact

on business (financial, strategic, operational impacts)

and importance to stakeholders (reputational impacts).

STEP 04.

Selecting material issues

Materiality

Analysis

Financial

impacts

Strategic

impacts

Operational

impacts

Reputational

impacts

We analyzed documented materials and quantified the

results of analysis for each category, in order to determine

the priority of the issues in the major sustainability

management issue pool.

STEP 02.

Analyzing issues

Analysis of impact on business

• Expert evaluation

Evaluation of the pool of topics’ business influence by

sustainability management experts

• Benchmarking of other companies in the same industry

Analyze material issues of recent sustainability reports

published by competitors

• Past sustainability report (2017-2021)

Analyze reported issues and the content of reports that were

published in the last five years

Analysis of importance to stakeholders

• Analysis of international standards

Analyze major sustainability initiatives in Korea and overseas,

including GRI, DJSI, and SASB, as well as ESG evaluations

• Media research

Analyze 9,729 articles from major media outlets in Korea

that were published in 2021

We conducted a double-materiality-based stakeholder

survey to simultaneously identify sustainability

managem

ent issues that we should manage for business

operation and issues with a high level of business/

financial influence from the stakeholder perspective.

By doing so, we identified sustainability issues of high

interest.

STEP 03.

Stakeholder survey (Double-Materiality)

Overview of stakeholder survey

Period

• February 21-25, 2022

Method

• Online survey

Target

• Outside stakeholders

• Hyundai employees

Details

• Evaluate ESG issues that have a high level of

business/financial influence on Hyundai

• Evaluate ESG issues that have a high level of

business/financial influence on stakeholders

To identify material issues that are material in business/

financial aspects and also have a high level of influence

on stakeholders, we analyzed sustainability management

trends by analyzing global economic, social, and

environmental issues as well as international standards,

and benchmarked sustainability reports in the same

industry. We also carried out media research and internal

status reviews to form a pool of 34 material sustainability

topics that influence our stakeholders.

STEP 01.

Forming a pool of topics

In relation to the major issues that were identified

through the materiality analysis, direction of issue

management, key outcome and mid-to-long term plans

are reported and disclosed.

STEP 05.

Materiality analysis results

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1. Introduction

Issues

Carbon neutrality &

Expansion of renewable energy

Strengthening ESG governance roles

Application of eco-friendly materials and technologies to

products

Supply chain ESG risk management

Customer satisfaction

Expanding the scope of product life cycle assessment (LCA)

Technological innovation

Brand image

Protecting shareholder rights

Strengthening product safety and

quality management

Organizational culture and evaluation reward

Building infrastructure

Expanding the EV lineup

Technology investment and development in

relation to improving fuel efficiency of ICEVs

Environmental investments, including electrified vehicles

and renewable energy power generation facilities

Improving global corporate value

Strategic social contribution

Participating in global ESG initiatives

Innovation

Job creation and retention

Assessing and protecting biodiversity related to business

activities

Workplace safety and health

Operational eco-efficiency

BOD operation

Labor-management relations

Risk management

Responding to fuel economy regulations

Employee human rights and diversity

Employee competency building

Personal information protection

Advancement of the system of collecting and

recycling end-of-life vehicles/second life EV batteries

Analysis of climate change physical/transition risk

Economic performance improvement

Business ethics

Management of Material Issues

Material Issues

Direction for Issue Management

Major Outcomes

Mid- to Long-term Plan

Target Year

Carbon neutrality &

Expansion of

renewable energy

• Set detailed plans to achieve carbon neutrality and transition to renewable energy, and implement

them

• Inevitable to transit from ICEVs to EVs due to the reinforced vehicle CO

regulations and the spread of

ban on sales of the ICEVs among the major countries

• Established and announced our goal to achieve carbon neutrality by 2045

• Joined the RE100 initiative and set the roadmap

• Launched IONIQ 5 based on “E-GMP”, a platform dedicated to electric vehicles, and the first EV model of

the Genesis brand

• Achieve carbon neutrality across the entire value chain by 2045

• Convert all electricity consumed at all Hyundai business sites around the world to renewable

energy by 2045

• Achieve 100% electrification in European market by 2035 and other major markets by 2040

2045

Supply Chain

ESG Management

• Set goal for preventing supply chain risk

• Establish supply chain ESG management policies and process

• Manage risks associated in areas of ethics, environment, labor/human rights, safety/health and

management system

• Achieved 100% safety and health system certification of tier-1 suppliers

• Advanced supplier ESG assessment (assessment indicators and due diligence)

• Helped high-risk suppliers make improvements (distribute safety and health guidelines and provide online

safety training)

• Complete the support for establishment of safety devices to prevent supplier accidents by 2024

• Conduct supply chain ESG assessment to all suppliers (2019-2023, conduct to 20% of tier-1

suppliers each year)

• Reduce supply chain carbon by at least 10% through energy conversion of tier-1 parts suppliers

and raw materials suppliers by 2030

2030

Technological

Innovation

• Develop smart mobility device and service based on AI, autonomous driving, big data/, connectivity,

etc.

• Innovate technologies to improve fuel efficiency and reduce CO

emissions

• Received the Prime Minister's Award at the Korea Technology Awards (for connected car computing system

technology)

• Improved fuel efficiency by more than 20% through engine downsizing, aerodynamic improvement,

driving resistance improvement, vehicle weight reduction, etc. (3rd generation G80)

• Developed an unmanned autonomous driving vehicle (IONIQ 5 robotaxi)

• Build electric vehicle maintenance function technologies and infrastructure at all Bluehands

across the nation by 2025

• Apply hydrogen fuel cells to all commercial vehicles by 2028

• Enhance software competitiveness, including electric vehicle autonomous driving and

connected technology, by investing KRW 12 trillion in the software area by 2030

• Comply with fuel efficiency/CO2 emission regulations by each country

2030

Stakeholder interest

Business impact

1.5

2.0

2.5

3.0

3.5

4.0

3.0

2.0

1.0

Supply chain ESG risk management

Strengthening product safety

and quality management

Expanding the EV lineup

Technological

innovation

Carbon neutrality

& Expansion of

renewable energy

Materiality Analysis Results

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1. Introduction

Independent Assurance Statement

Hyundai Motor Company (“the Company” or “HMC”) commissioned DNV Business Assurance Korea, Ltd. (“DNV”, “we” or “us”), part of

DNV Group, to undertake independent assurance of its Sustainability Report 2022 (the “Report”).

Our Opinion

On the basis of the work undertaken, nothing came to our attention to suggest that the Report does not properly describe HMC’s

adherence to the Assurance Principles described below. In terms of reliability of the performance data, nothing came to our attention to

suggest that these data have not been properly collated from information reported at operational level, nor that the assumptions used

were inappropriate. We believe that the Report adopts the ‘Core’ option of the GRI Standards.

Based on non-financial data, sustainability activities and performance data of 2021 generated from HMC, we have evaluated the adherence

to AA1000 AccountAbility Principles (AA1000AP) 2018 and assessed the quality of sustainability performance information. We have

reviewed that the Topic-specific disclosures of GRI Sustainability Reporting Standards 2020 which are identified in the process for defining

report content;

No.

Material Topic

Topic Standard

Carbon neutrality & Expansion of renewable energy

Non-GRI

Supply Chain ESG Management

414-2

Technological Innovation

Non-GRI

Without affecting our assurance opinion, we also provide the following observations:

The Principle of Inclusivity

HMC defined customers and dealers, employees, suppliers, local communities, government, and shareholders and investors as their major

stakeholder groups. The definition of each stakeholder and the approaches to engage with selected stakeholders are introduced in the

report, and stakeholder interests are reflected in the materiality assessment process. During the materiality assessment process, HMC

conducted an online survey targeting internal and external stakeholders, and DNV confirmed that the results of the survey were reflected

in the process of composing reporting content and improving management activities.

The Principle of Materiality

HMC has conducted the materiality assessment to prepare the Report. Based on the derived pool of 84 issues, a total of 34 reporting topics

were selected through business impact and stakeholder interest analysis. Among the reporting topics, the top three topics are selected as

material issues in consideration of financial impact, strategic impact, operational impact, and reputational impact and are reported in more

detail. HMC identified the importance of each issue from various sources, and newly added issues reflecting the latest ESG trends were

reviewed and reflected in the report. We have reviewed the materiality assessment process and noted relevant material topics prioritized

from the process are addressed in the report.

The Principle of Responsiveness

Hyundai Motor Group established an ESG management framework titled 'The Right Move for the Right Future' in March 2022, and

presented three major mid- to long-term directions and 15 key management areas. HMC reports in detail the company's performance,

future direction, and detailed activities in connection with the group strategy. In addition, HMC has established an ESG governance system

to effectively achieve the strategy. The Sustainability Management Committee within the BOD and the ESG Committee, a small meeting

group within the Hyundai Business Strategy Meeting, are formed to make decisions on major issues. Information related to these are

disclosed through the report.

The Principle of Impact

HMC discloses in detail the background of issue selection and progress on material topics that reflect stakeholders' interests and

expectations. At the end of the report, an ESG magazine was prepared to reinforce reporting on topics such as carbon neutrality

and robotics innovation. It is recommended to clearly set strategic KPIs to manage the impact of each material issue, and to present

performance and future plans in more detail. The assurance team confirm that the material topics selected through the materiality

assessment were fully reflected to the report, based on the physical and periodic reporting boundaries.

Reliability of Speciﬁc sustainability performance information

DNV conducted a review of compliance with the principles of AA1000AP(2018) of the Report as described above (Type 1 verification).

In addition, we have reviewed the reliability of the disclosure data (Type 2 verification) – ‘Industrial accident rate’, ‘waste generated

in operations’, ‘water consumption’. The assurance team has sampled data and tested accuracy and reliability of the sustainability

performance data of the Company and interviewed the responsible for the subject data handling and reviewed the data gathering process

with the supporting documents and records. Based on the test, the intentional error or misstatement is not noted. Data owners were

able to demonstrate to trace the origin of the data and to interpret the processed data in a reliable manner. The data was identifiable

and traceable. The Company reports the sustainability performance of the last three years and can be compared over time. Any errors or

unclear expressions found during the verification process were corrected prior to the publication of the Report.

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1. Introduction

Responsibilities of the Directors of HMC and DNV

The Directors of HMC have sole responsibility for the preparation of the Report. Our statement

represents our independent opinion and is intended to inform all stakeholders. DNV was not

involved in the preparation of any statements or data included in the Report except for this

Assurance Statement. DNV’s assurance engagements are based on the assumption that the data

and information provided by the client to us as part of our review have been provided in good faith.

DNV expressly disclaims any liability or co-responsibility for any decision a person or an entity may

make based on this Independent Assurance Statement.

Competence and Independence

DNV’s established policies and procedures are designed to ensure that DNV, its personnel and,

where applicable, others are subject to independence requirements (including personnel of other

entities of DNV) and maintain independence where required by relevant ethical requirements. This

engagement work was carried out by an independent team of sustainability assurance professionals.

This engagement work was carried out by an independent team of sustainability assurance

professionals.

DNV – Business Assurance

DNV Business Assurance Korea Ltd. is part of DNV Group, a global provider of certification,

verification, assessment and training services, helping customers to build sustainable business

performance.

www.dnv.co.kr/assurance

Scope and Approach

We performed our work using AA1000AS v3, Assurance Standard set by AccountAbility, and DNV’s assurance methodology VeriSustain™

(Ver. 5.0) which is based on our professional experience, international assurance best practices including the International Standard on

Assurance Engagements 3000 (“ISAE 3000”), and the Global Reporting Initiative Sustainability Reporting Standards (“GRI Standards”).

DNV provides Type 1 and the moderate assurance. But some part of performance data has been verified by Type 2 as described above.

The engagement excludes the sustainability management, performance and reporting practices of HMC’s subsidiaries, associated

companies, suppliers, contractors and any third-parties mentioned in the Report. We did not interview external stakeholders as part of

this assurance engagement. Economic performance based on the financial data is cross-checked with internal documents, the audited

consolidated financial statements and the announcement disclosed at the website of Korea Financial Supervisory Service (dart.fss.or.kr) as

well as HMC’s website (www.hyundai.com). The review of financial data taken from these sources is not within the scope of our work.

We planned and performed our work to obtain the evidence we considered necessary to provide a basis for our assurance opinion. We

are providing a ‘limited level’ of assurance. Limited depth of evidence gathering including inquiry and analytical procedures and limited

sampling at lower levels in the company were applied. The baseline data for environmental and social performance are not verified, while

the aggregated data at the corporate level are used for the verification.

Basis of our opinion

The assurance was carried out from May to June 2022. We undertook the following activities as part of the assurance process:

●

Challenged the sustainability-related statements and claims made in the Report and assessed the robustness of the underlying data

management system, information flow and controls;

●

Conducted online interviews with representatives from the various departments of the HQ and major plants;

●

Conducted document reviews, data sampling and interrogation of supporting databases and associated reporting system as they relate

to selected content and performance data;

●

Reviewed the process and the result of materiality assessment.

For and on behalf of DNV Business Assurance Korea Ltd.

Seoul, Korea

June 30, 2022

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1. Introduction

Assurance Statement

Relating to Hyundai Motor Company’s Scope 1 & 2 GHG emissions in Korea for the 2021 calendar year

This Assurance Statement has been prepared for Hyundai Motor Company.

Terms of Engagement

LRQA was commissioned by Hyundai Motor Company (HMC) to provide independent assurance on its Greenhouse Gas (GHG)

Inventory Report for the calendar year 2021 (the report) against “the guidelines on emission reporting and certiﬁcation under the

GHG emissions trading system” and the monitoring plan for the calendar year 2021 using “the veriﬁcation guidelines for GHG

emissions trading system”.

The report relates to direct GHG emissions and energy indirect GHG emissions.

Management Responsibility

LRQA’s responsibility is only to HMC. LRQA disclaims any liability or responsibility to others as explained in the end footnote. The

management of HMC is responsible for preparing the report and for maintaining effective internal controls over all the data and

information within the report. Ultimately, the report has been approved by, and remains the responsibility of HMC.

LRQA’s Approach

LRQA’s assurance engagement has been carried out in accordance with our verification procedure using “the verification

guidelines for GHG emissions trading system” to reasonable level of assurance.

The following tasks were undertaken as part of the evidence gathering process for this assurance engagement:

• Visiting sites and auditing management system to control the data and records regarding GHG emissions and energy uses

• Interviewing the relevant persons responsible for managing and maintaining data and associated records

• Reviewing the historical data and in formation back to source for the calendar year 2021.

Level of Assurance & Materiality

The opinion expressed in this Assurance Statement has been formed on the basis of a reasonable level of assurance, and at the

materiality of the professional judgement of the veriﬁer and at the materiality level of 2.5%.

LRQA’s Opinion

Based on LRQA’s approach, we believe that the report is prepared in accordance with “the guidelines on emission reporting and

certiﬁcation under the GHG emissions trading system” and the monitoring plan for the calendar year 2021 using “the veriﬁcation

guidelines for GHG emissions trading system” and the GHG emissions data in Table 1 is materially correct.

Dated: 24 March 2022

Il-Hyoung Lee

LRQA

17th Floor, Singsong Building, 67 Yeouinaru-ro, Yeongdeungpo-gu, Seoul, 07327, Korea

LRQA Reference: SEO6012382

Table1. Summary of GHG emissions

(Unit: tCO

eq)

Scope of GHG emissions

Year 2021

Direct GHG Emissions

474,331

Energy Indirect GHG Emissions

1,034,670

Total GHG Emissions

1,509,001

Note: This assurance engagement included Ulsan Plant, Asan Plant, Jeonju Plant, R&D Centers, Headquarters, Service Centers, Own Sales Branches (incl. Delivery & Release

Centers) and Genesis Sales Branches.

LRQA Group Limited, its afﬁliates and subsidiaries, and their respective ofﬁcers, employees or agents are, individually and collectively, referred to in this clause as ‘LRQA’. LRQA

assumes no responsibilityand shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever

provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice and in that case any responsibility or liability is

exclusively on the terms and conditions set out in that contract.

The Korean version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages.

This Assurance Statement is only valid when published with the report to which it refers. It may only be reproduced in its entirety.

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1. Introduction

Relating to Hyundai Motor Company’s Scope 1 & 2 GHG emissions overseas factories for the 2021 calendar year

This Assurance Statement has been prepared for Hyundai Motor Company.

Terms of Engagement

LRQA was commissioned by Hyundai Motor Company (HMC) to provide independent assurance on its greenhouse gas (GHG)

emissions of its overseas factories for the calendar year of 2021 (“the report”) against “the guidelines on emission reporting and

certiﬁcation under the GHG emissions trading system” of the Ministry of Environment using “the veriﬁcation guidelines for GHG

emissions trading system”.

Management Responsibility

LRQA’s responsibility is only to HMC. LRQA disclaims any liability or responsibility to others as explained in the end footnote. The

management of HMC is responsible for preparing the report and for maintaining effective internal controls over all the data and

information within the report. Ultimately, the report has been approved by, and remains the responsibility of HMC.

LRQA’s Approach

LRQA’s assurance engagement has been carried out in accordance with our verification procedure using “the verification

guidelines for GHG emissions trading system” to a limited level of assurance.

The following tasks were undertaken as part of the evidence gathering process for this assurance engagement:

•

Visiting HMC’s headquarters located in Seoul and auditing management system to control the data and records regarding GHG

emissions

•

Interviewing the relevant persons responsible for managing and maintaining data and associated records

•

Reviewing the historical data and information through sampling at an aggregated level.

•

Checking whether the scope 1 GHG emissions from HMMC fabrication plant were transposed correctly from the G HG

inventories which were veriﬁed by the third-party assurance providers other than LRQA.

Level of Assurance & Materiality

The opinion expressed in this Assurance Statement has been formed on the basis of a limited level of assurance and at the

materiality of the professional judgement of the veriﬁer.

LRQA’s Opinion

Based on LRQA’s approach, nothing has come to our attention that would cause us to believe that the direct GHG emissions and

energy indirect GHG emissions summarized in Table 1 below are not materially correct.

Dated: 28 April 2022

Il-Hyoung Lee

LRQA

17th Floor, Singsong Building, 67 Yeouinaru-ro, Yeongdeungpo-gu, Seoul, 07327, Korea

LRQA Reference: SEO6012382

LRQA Group Limited, its afﬁliates and subsidiaries, and their respective ofﬁcers, employees or agents are, individually and collectively, referred to in this clause as ‘LRQA’. LRQA

assumes no responsibilityand shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever

provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice and in that case any responsibility or liability is

exclusively on the terms and conditions set out in that contract.

The Korean version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages.

This Assurance Statement is only valid when published with the report to which it refers. It may only be reproduced in its entirety.

Table 1. Summary of GHG Emissions from HMC’s overseas factories in 2021

(Unit: tCO

eq)

Plant

HMMA

BHMC 2~3 Fab.

BHMC 4~5 Fab.

HMI

HAOS

HMMC

HMMR

HMB

HTBC

Total

Scope 1

31,688

53,776

27,064

27,519

27,697

34,287

37,843

8,135

1,626

249,635

Scope 2

162,856

106,721

57,921

169,619

24,310

43,150

44,804

7,913

8,274

625,568

Total

194,544

160,497

84,985

197,138

52,007

77,437

82,647

16,048

9,900

875,203

100

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1. Introduction

Relating to Hyundai Motor Company’s Scope 3 GHG emissions in Korea for the 2021 calendar year

This Assurance Statement has been prepared for Hyundai Motor Company.

Terms of Engagement

LRQA was commissioned by Hyundai Motor Company to assure its GHG Emissions Inventory for the calendar year 2021 (hereafter referred

to as “the Report”).

The Report relates to other indirect GHG emissions (Scope 3) that includes the following categories:

•

Purchased goods & services

•

Capital goods

•

Fuel- and energy-related activities

•

Waste generated in operations

•

Business travel

•

Employee commuting

•

Downstream transportation and distribution

•

Use of sold products

•

End-of-life treatment of sold products

•

Downstream Leased Assets; and

•

Investment

This engagement excludes verification of Scope 1 and 2 emissions in accordance with our contract with Hyundai Motor Company.

Hyundai Motor Company’s geographical boundary includes operations in all domestic and overseas sites. The main activities of the

organization include manufacturing of vehicles and the GHG emissions have been consolidated using operational control approach.

Management Responsibility

Hyundai Motor Company’s management was responsible for preparing the Report and for maintaining effective internal controls over the

data and information disclosed. LRQA’s responsibility was to carry out an assurance engagement on the Report in accordance with our

contract with Hyundai Motor Company.

Ultimately, the Report has been approved by, and remains the responsibility of Hyundai Motor Company.

LRQA’s Approach

Our verification has been conducted in accordance with ISO 14064–3:2006, ‘

Specification with guidance for validation and verification of

greenhouse gas assertions

’ to provide limited assurance that GHG data as presented in the Report have been prepared in conformance with

ISO 14064–1:2006, ‘

Specification with guidance at the organizational level for quantification and reporting of greenhouse gas emissions and

removals

’.

To form our conclusions the assurance engagement was undertaken as a sampling exercise and covered the following activities:

•

visited the headquarters in Seoul and reviewed processes related to the control of GHG emissions data and records

•

interviewed relevant staff of the organization responsible for managing GHG emissions data and records

•

verified historical GHG emissions data and records relating to operations in domestic and overseas sites at an aggregated level for the

calendar year 2021; and

•

verified the emission factors used with the source reference and confirmed its appropriateness

Level of Assurance & Materiality

In accordance with our contract agreement, the assurance was conducted at a limited level of assurance at a materiality of the professional

judgment of the Verifier. The opinion expressed in this Assurance Statement has been accordingly formed.

LRQA’s Opinion

Based on LRQA’s approach nothing has come to our attention that would cause us to believe that other indirect GHG emissions disclosed

in the Report as summarized in Table 1 below are not materially correct and that the Report has not been prepared in conformance with ISO

14064–1:2006.

Dated: 22 June 2022

Tae-Kyoung Kim

LRQA Lead Verifier

On behalf of LRQA

17th Floor, Sinsong Building, 67 Yeouinaru-ro, Yeongdeungpo-gu, Seoul, Korea

LRQA reference number: SEO00001059

101

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1. Introduction

Table 1. Summary of Hyundai Motor Company, GHG Emissions Inventory 2021

Scope of GHG emissions

Tonnes CO

Other indirect GHG emissions (Scope 3)

Purchased goods & services – raw materials of parts for all vehicles manufactured in domestic and overseas

18,359,619

Capital goods – computers & monitors purchased in domestic

139

Fuel- and energy-related activities – upstream emissions of fuels consumed in domestic and overseas (excluding electricity and steam purchased) (Overseas sites include HMMA, BHMC 2 ~5 Fabs, HMI, HAOS, HMMC, HMMR, HMB and HTBC)

149,556

Waste generated in operations – treatment of waste generated from operations in domestic (included research centres, Ulsan/Jeonju/Asan plants, and service centres)

1,911

Business travel – emissions of personal cars, buses, trains and domestic & international flights by employees working in domestic

7,069

Employee commuting – commuting buses in domestic

5,911

Downstream transportation and distribution – vehicles manufactured in domestic (Included shipping and land transportation by Hyundai Glovis)

838,575

Use of sold products - internal combustion engine vehicles sold in domestic and overseas (mileage of 150,000 km for 10 years) (electric vehicles and hydrogen vehicles are excluded)

80,887,513

End-of-life treatment of sold products – vehicles sold in domestic and overseas

810,794

Downstream leased assets – lessee companies in the headquarters building

804

Investments – scope 1 and 2 emissions of six investee companies where Hyundai Motor Company owns 20% or more shares, and which are listed on the stock market of Korea.

728,902

Notes:

1. This engagement excludes veriﬁcation of Scope 1 and 2 emissions in accordance with our contract with Hyundai Motor Company.

2. Scope 1 and 2 emissions for Hyundai Motor Company using an operational control approach have been veriﬁed for the same reporting period by LRQA in accordance with the guidelines on emission reporting and certiﬁcation under the GHG emissions trading system.

3. EF for calculation of air travel emissions don’t consider radiative force.

This Assurance Statement is subject to the provisions of this legal section:

LRQA Group Limited, its affiliates and subsidiaries, and their respective officers, employees or agents are, individually and collectively, referred to in this clause as 'LRQA'. LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever

provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract.

The English version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages.

This Assurance Statement is only valid when published with the Report to which it refers. It may only be reproduced in its entirety.

102

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

About This Report

Hyundai Motor Company has been publishing a sustainability report every year since 2003 in order to disclose both financial and non-financial performance, including its efforts to promote sustainable management, in an integrated manner and to

communicate with stakeholders. This 2022 Sustainability Report elaborates on its key performances achieved in the areas of ESG management strategy, environment, society and governance, and the issues associated therewith. Through this, we will

actively communicate with stakeholders to realize social value as a global leading company.

This report applies the “Core Option” of the Global

Reporting Initiative (GRI) Standards with appropriate

modifications. In addition, this report satisfies the four

principles – Inclusivity, Materiality, Responsiveness, and

Impact – of the AA1000APS (Accountability Principles

Standard) that includes the obligation to explain

sustainability management.

In addition, this report was prepared to align with the

information disclosure guidelines of the Task Force on

Climate-related Financial Disclosures (TCFD), Sustainability

Accounting Standards Board (SASB) and WEF IBC

Stakeholder Capitalism Metrics.

Publisher

Hyundai Motor Company

Headquarters: 12, Heolleung-ro, Seocho-gu, Seoul,

06797, Korea

Publication

Date

June 2022

Production

(Contact

Information)

Sustainability Management Team,

Hyundai Motor Company

Tel: +82-2-3464-8886

E-mail: ESG@hyundai.com

Reporting

Principle

GRI Standard (Core option), TCFD, SASB,

WEF IBC Stakeholder Capitalism Metrics

Reporting

Boundary

Hyundai Motor Company (also include some data

and information of Hyundai Motor Group)

Reporting

Scope

Economic (based on Korean International Financial

Reporting Standards), social and environmental

performance

Reporting

Period

January 1st, 2021 - December 31st, 2021

(also include some data and information from the

first half of 2022)

Reporting

Cycle

Annual (last report was published in June 2021)

Reporting Principles and Standards

This report covers activities undertaken from January 1st,

2021 to December 31st, 2021, including some key activities

conducted until the first half of 2022. As for quantitative

performance, if the results need to be tracked continuously,

we have used data for the past three years. The reporting

cycle for this report is one year. The previous report was

published in June 2021.

Reporting Period

This report covers the activities of the headquarters as well

as manufacturing plants, R&D centers, design centers, and

sales corporations operated by Hyundai Motor Company in

Korea and overseas.

Financial information is based on the consolidated financial

statements in accordance with the Korean International

Financial Reporting Standards (K-IFRS). Nonfinancial data

regarding environmental and social performance is based

on the separate figures of Hyundai Motor Company, and

some performances include those of Hyundai Motor Group.

In case the reporting scope differs, the reporting scope of

the information is indicated separately in the annotation.

Scope and Boundary of Report

This report has been assured by an independent assurance

corporation (DNV) to ensure the accuracy, objectivity and

credibility of the report preparation process and all the

information created, and the verification was completed

in accordance with international verification standards.

The financial information provided in this report has been

audited by an independent auditor, and assurance on

greenhouse gas emissions and energy usage was carried

out in accordance with the verification principles of the

guidelines such as “Administrative Guidelines for Operation

of Emission Trade System”.

Third Party Assurance

The UN Global Compact (UNGC) is an international

agreement that former UN Secretary-General Kofi Annan

suggested in 2000 to emphasize corporate execution of

social responsibilities, and consists of ten major principles

in the four areas of human rights, labor, environment, and

anti-corruption. Hyundai supports the ten principles of the

UNGC and strives to observe them in overall management.

UN Global Compact

103

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

A Mi Wu

An Na Jo

Ba Mi Kim

Bit Na Yoo

Bo Gon Go

Bo Hyun Yun

Bo Kyung Choi

Byung Mun Choi

Byung Il Jo

Chang Hee Kang

Chang Ho Yoo

Chang Je Kim

Chan Hee Lee

Cwang Il Lee

Da Hee Kim

Dal Su Park

Dong Gi Son

Dong Shin Kim

Dong Sung Kim

Don Soon Lee

Eu Gene Chang

Eui Hyun Seo

Eun Yeong Park

Gil Hoon Kim

Gun Hee Cho

Gwang Hyun Hahn

Gyeol Han

Hae Sung Jung

Han Ju Yun

Hee Jeong Park

Ho Deuk Song

Ho Seok Shin

Hoon Ha Seo

Hwan Hee Lee

Hwi Kyu Choi

Hye Je Lim

Hye Ju Jung

Hye Jung Noh

Hyeon Gu Kim

Hye Won Kim

Hyo Jun Kim

Hyun Ho Seo

Hyun Soo Kim

Hyun Wook Jeong

Hyun Joon Lee

Hyun Kyu Kim

Hyung Chul Jun

Im Pal Choi

Ja Young Song

Jae Cheol Choi

Jae Gon Lee

Jae Hyun Yoon

Jae Hyung Kim

Jae Sik Shim

Jae Won Lee

Jae Yun Shin

Jang Ho Kuk

Jang Hee Sim

Je Yeon Kim

Jee In Kim

Jeong Hyeon Jo

Jeong Wook Hur

Ji Hye Jang

Ji Hye Nam

Ji Hye Ok

Ji Hoon Gwak

Ji Man Lee

Jin Won Bae

Jin Wook Song

Jin Young Hwang

Jin Hyung Lee

Jin Kyung Kim

Jin Kyung Noh

Jin Soo Shin

Jin Woo Park

Ji Yeon Jeon

Jong Ok Kim

Jong Ryul Park

Jong Won Lee

Joon Seop Choi

Joong Hyuk Park

Jung Ho Park

Jung Woo Lee

Jun Dong Lee

Jun Ho Kim

Jun Seok Kim

Jung Won Kim

Kook Jin Hwang

Kyo Young Lee

Kyu Sang Choi

Kyung Moon Lee

Kyun Ghee Kang

Mi Dol Yu

Min Ho Choi

Min Chang Cha

Min Oh Park

Min Ok Park

Min Seok Kim

Min Seong Yoo

Min Young Kim

Mi Yeon Lee

Moon Sang Yoon

Moon Sue Park

Nae Hwan Hyun

Na Eun Yoo

Nam Su Han

Sang Bum Kim

Sang Jin Kim

Sang Woo Hwang

Se Jun Kim

Seok Ju Cha

Seok Beom Han

Seok Ho Kim

Seong Jae Lee

Seong Yeong Oh

Seong Yeop Kang

Se Ri Kim

Seung Il Kim

Seung Tae Kim

Seung Hoon Lee

Seung Kyum Ra

Seung Woo Cho

Si Cheol Roh

So Yeon Lee

Soo Hyeon Bae

Soon Bok Kim

Suk San Yoon

Sug Nam Hwang

Sung Joo Lee

Tae Hwan Kang

Tae Jung Lee

Tae Kyoo Lee

Won Yeop Lim

Woo Yong Choi

Wu Jin Park

Yeon Kee Min

Yeon Ju Ryu

Yong Tae Song

Yong Beom Jo

Yong Hee Park

Yoon Jae Lee

You Jin Jeong

Young Su Kim

Young Doo Choi

Young Jin Song

Young Pyoe Hong

Young Seung Jin

Yu Jeong Lee

Yun Ryeong Song

Yun Tae Kim

Contribution

(In alphabetical order)

Planning & Design

Hyundai Motor Company

Sustainability Management Team

Dong Woon Jung

Jae Kyoung An

Mi Jin Na

Min Kyung Kim

Won Jun Choi

Yoo Seong Choi

Yun Jae Lee

Hyundai Motor Company Brand Design Team

Seo Hee Park

Suk Gyu Choi

Korea Productivity Center

Hyung Yun Jeong

Jun Young Lee

Kwang Ho Jeong

Sang Woo Han

Talantone Creative Group

Ah Reum Min

Youn H. Park

104

ESG Magazine

2. Environmental

3. Social

4. Governance

5. ESG Factbook

1. Introduction

Progress

through Vision.

ESG Magazine

COVER STORY

2045 net-zero plan – an integrated climate change

solution that consists of three pillars of clean mobility,

next-generation platform, and green energy

Net-Zero Roadmap

Mobility Solution

Platform Solution

Energy Solution

INNOVATION

Human-centered robotics innovation

Robotics of Tomorrow

Robotics for Today

CONTRIBUTION

Change for the better, sustainable future for humanity

Co-existence of Humanity and Earth

Freedom in Mobility and Connection

CONTRIBUTION

COVER STORY

Contents

INNOVATION

Envision the

future mobility

enabled by

carbon neutrality.

Source: 6th Intergovernmental Panel on Climate Change (IPCC) Report

Source: Spreading like Wildfire: The Rising Threat of Extraordinary Landscape Fires (UNEP, 2022)

Hyundai x IAA 2021 | Powering Human Progress

COVER STORY

Global warming is progressing rapidly so that “climate crisis” is more

commonly used than “climate change”. Sea ice extent around the

North Pole shrank from 6.9 million km

in 1979 to 4.72 million km

2021

, about 21.8 times the landmass of South Korea. In California, large

wildfires, caused by rising temperatures, in 2021 scorched areas totaling

around 1,980 km

, three times the size of Seoul. Korea is no exception.

In March 2022, a wildfire in the eastern coast burned for 213 hours, the

longest in the nation’s history. Though the historic fire eventually was

extinguished to a great relief of many concerned citizens, it was clear

to all that forest fires were burning bigger and longer, posing a greater

threat to forests the world over. According to a UNEP report, climate

change will cause more wildfires, and if left unaddressed, will trigger

14% more large wildfires by 2030 and 50% more by the end of the 21st

century

As the climate crisis threatens the survival of humanity, net zero is

emerging as humanity’s common goal. According to the 2021 IPCC

Sixth Assessment Report, the global community as a whole is rather

accelerating than slowing climate change, and for Earth’s temperatures

to stabilize, we should achieve net zero. Net zero refers to the balance

between the amount of greenhouse gas (GHG) produced and the

amount removed from the atmosphere, through absorption by forests

and offsetting. Easier said than done, but done it must be as it is the only

path humanity can take that ensures its common prosperity, and this

path Hyundai pursues.

Under our brand vision of “Progress for Humanity”, we have been

searching for ways to realize mobility of humanity – a fundamental

value – without burdening the Earth. Leveraging our technologies,

we have been formulating mobility solutions for a sustainable Earth.

Our belief and sense of responsibility that the auto industry should

more proactively respond to climate change than any other industries

resulted in “2045 Net-Zero Roadmap” in September 2021.

The automotive industry, long classified as manufacturing, used to

be associated solely with CO

-heavy fossil fuels. Hyundai in 2019

commenced its transition to a “Smart Mobility Solution Provider”, going

beyond being an auto maker, and in 2021, announced a net-zero goal,

thereby accelerating the transition. Our net-zero goal is unique in that it

is a response to climate change based on eco-friendly technologies we

have accumulated. We have integrated solutions that expand beyond

the traditional areas of mobility to cover entire energy and other urban

infrastructures. Based on such solutions, we will go net zero across all

our mobility value chains, and by going a step further and developing

new eco-friendly mobility means, we will take the lead in the transition

to a low-carbon economy.

The 2022 Hyundai Motor Company ESG Magazine illustrates Hyundai’s

“Progress for Humanity”. For the irreplaceable Earth environment, for

the humanity of today, and for a sustainable future for which futures

generations will be grateful, the progress continues.

In Progress with Positive Energy.

Tank-to-wheel (TTW) that refers to the use of fuel in the vehicle and emissions during driving

Suppliers’ carbon emission that we aim to reduce and achieve net zero through collaboration with partners

Road to

carbon neutrality

Today, we live in an era called “Great Shift”. Having gone through three

industrial revolutions represented by the steam engine, electricity,

information communication technologies, respectively, we are entering

the era of the Fourth Industrial Revolution marked by AI and robots.

Amidst technologies that can replace fossil fuels with clean and unlimited

energy, Hyundai is focusing its strengths and wisdom on innovating the

environment with an eye toward reaching net zero by 2045.

Our net-zero goal covers all phases of vehicle life cycle, from procurement

of automotive parts to production and operations. In addition to

electrification and thus eliminating vehicle emissions, we will reduce the

carbon footprints of auto parts manufacturing through close cooperation

with suppliers and achieve net zero in a true sense of the word by having

all business sites 100% run on carbon-free energy. To this end, we have

established a detailed roadmap and will fully implement it using advanced

technologies and with a firm conviction.

2019

2030

2035

2040

2045

Business sites

(Plants / Buildings)

Removal / offset

Supply chain

emissions

from cars

emissions

100 Electrification of Genesis,

Expanding the use of renewable energy

100 Electrification in European market,

All Commercial vehicle electrification

in Korea

100 Electrification in main market,

Expansion of hydrogen technologies

and their application

Net-Zero

2045 Net-Zero Roadmap

Net-Zero Roadmap

CARBON

NEUTRALITY

Evolving

Sustainability

Vehicle emissions account for around 20% of the GHG being emitted around the world,

of which over 70% comes from road traffic

. Considering that both gasoline and diesel

are leading fossil fuels that power internal combustion engine vehicles, global net zero

is possible only when vehicles running on fossil fuels are replaced by those that run on

carbon-free energy. As a way not only to nimbly respond, but also take the lead the vehicle

electrification, Hyundai seeks to completely change the mobility ecosystem by using

vehicle-to-grid (V2G) technology, thereby reducing the global dependence on fossil fuels.

Source: International Energy Agency (IEA)

MOBILITY SOLUTION

Setting

the Course

If urbanization continues at its present pace, it is said that some 1.6 billion people around

the world will be living their summers at temperatures of 35

℃

and higher by 2050

Traffic congestion, another serious issue, causes city life to be more unbearable and road

accidents to increase. Resolving these and other related issues requires unconventional

mobility solutions. Hyundai is therefore accelerating the development of eco-friendly

power-based new concept mobility systems such as advanced air mobility (AAM) and

purpose built vehicle (PBV), and proposing new lifestyles of a future smart city free of

carbon emissions as well as of physical restrictions on mobility.

Source: UN Environment Programme (UNEP)

PLATFORM SOLUTION

Empowering

the Future

In reaching net zero, reducing the carbon footprints of auto production operations is as

important as manufacturing zero-emissions vehicles. Which is why Hyundai is focusing

on increasing the use of renewable energy, such as solar energy. Aiming to meet 100%

energy demand at all business sites with renewable energy by 2045, we are rapidly

moving forward with the transition to green energy while providing suppliers with net-

zero guidelines and urging them to act on their social responsibility. As such, Hyundai is

changing itself first so that the overall automotive industry can achieve sustainable growth

using eco-friendly energy as a main source of power.

ENERGY SOLUTION

3 PILLARS OF CARBON NEUTRALITY

Hyundai’s 2045 net-zero plan is an integrated climate change solution that consists of three pillars – clean mobility, next-generation platform, and green energy. In another word, net zero will be achieved through expansion of vehicle electrification,

development of innovative mobility platforms, and complete transition to eco-friendly energy sources. Following is the future of sustainable mobility Hyundai environs amid a global climate crisis.

Evolving

Sustainability

Extreme weather events have become more common across the world,

such as heat waves, snowstorms and typhoons, all related to global

warming. To preempt a full-scale climate crisis, we must act now. In

particular, if we fail to substantially reduce our dependence on fossil fuels,

we will be able to neither protect our livelihoods nor ensure a future for

generations to come.

Electrification is a key driver of Hyundai’s climate actions. Setting new

standards for eco-friendly vehicles and developing them over the years,

we are reorganizing our production and business structures into a carbon-

free mobility ecosystem and drawing a right path to carbon neutrality.

Moreover, as carbon neutrality cannot be achieved by some select

countries or companies acting alone, we are realizing carbon neutrality

for all by encouraging and supporting stakeholders to take climate action

as part of their daily lives. To enable parts supplier, vehicle assemblers,

and auto drivers to contribute to resolve the climate crisis, we expand our

space and invest our time in the future.

MOBILITY SOLUTION

From Vehicle

to Experience

On the Road to

Electrification

On the back of our technological prowess proven by

EV-exclusive brand IONIQ, we seek to achieve carbon

neutrality of vehicles we sell by transitioning our product

and operation structures to be electric vehicle-centered. We

plan to electrify the Genesis brand 100% by 2030, thereby

confirming the feasibility of our goal, and electrify all our

vehicles for the European market by 2035 and for the major

markets by 2040.

ELECTRIFICATION

Hyundai’s efforts for vehicle electrification began long ago. We started

with the SONATA EV (electric vehicle), our first EV model, in 1991; followed

it with the development of three versions of IONIQ – mild hybrid, plug-in

hybrid electric vehicle (PHEV), and battery electric vehicle (BEV) – in 2016;

launched the KONA EV in 2018; and then introduced the IONIQ 5 in 2021,

opening a new chapter in the history of electric vehicles.

The reason why we have established a detailed roadmap

by region, brand, and model is to make sure that our

goals do not end up a hollow declaration. Also, as for

electrification goals, we have ensured their practicality by

including production capacity, product competitiveness,

software technology and other key factors in the

development of the roadmap. Going forward, we will

take measured steps towards the goal at an increasing

speed by monitoring market changes in detail and nimbly

responding to changes.

In 2021, Hyundai sold 141 thousand EVs globally, an year-on-

year increase of 44%, reaffirming that the decision to hasten

the transition to electrification was a right one. Aiming to sell

1.87 million units in 2030, we will go along with rising global

consumption trends gravitating toward eco-friendly values and

set a standard for new automobile experience in a new era.

Vehicle Electrification Milestone and Roadmap

100% electrification

of the Genesis (total

electrification rate of 36%)

2030

100% electrification in

the European market

2035

100% electrification in

major markets (total

electrification rate of 80%)

2040

Achieve net zero

2045

ROADMAP

Launched the Sonata EV

1991

Launched the IONIQ EV

2016

Launched the KONA EV

2018

Launched the IONIQ 5

2021

MILESTONES

IONIQ

breaking new ground.

In addition to offering customers a distinctive EV experience,

IONIQ has communicated to all stakeholders a special

message asking them to come together and build a

sustainable future. IONIQ has a value that goes beyond

transportation thanks to the E-GMP, an integrated platform

modularized and standardized to enable the formation of

EVs varying in size and shape through expansion of the

wheelbase. The platform allows for extending driving range,

reducing charging time, and expanding the interior space. In

short, the innovative platform provides clear answers to all

questions consumers might have about choosing EVs.

Equipped with the vehicle-to-load (V2L) technology, the

IONIQ 5 offers value more than a means of transportation.

V2L is a bidirectional power feature that enables people

to use the battery in their EV as a mobile battery bank to

charge or use various home appliances, making a vehicle

an office on the road or movie theater on wheels. The next

step, the V2G technology, is expected to be available soon.

Using the V2G technology, customers can recharge their

cars when residential electricity is relatively affordable and

sell electricity from their car batteries back to the grid during

peak hours. Such flexibility constitutes wise consumption

from a customer perspective, contributes to the stability of

the power grid, and helps reduce fossil fuel demands, thus

benefiting all.

In 2020, IONIQ was reborn as Hyundai’s EV-exclusive brand. Succeeding the heritage of the IONIQ

model whose nameplate is a portmanteau of “ion” and “unique”, IONIQ has taken a new challenge of

taking the EV experience to the next level, excitement of which lies in the “E-GMP (Electric-Global Modular

Platform)”, a dedicated platform for Hyundai EVs. In 2021, we launched the E-GMP-based IONIQ

5, redefining

directions for sustainable future mobility to follow and signaling a full-fledged arrival of an EV era.

Up to 32 recycled PET bottles

Sugar cane and mixed corn

730

0.08 square meters of recyclable paperette

0.08

Each IONIQ 5 Contains

294

Wool

200

Flaxseed oil

2021 PROGRESS

IONIQ 5 – Global Award Winner

2022 World Car Awards

• World Car of the Year

• World Electric Vehicle of the Year

• World Car Design of the Year

2022 Car Buyer Best Car Awards

• Best Company Car

• Best Family Electric Car

Auto Express New Car Awards 2021

• Car of the Year 2021

• Mid-size Company Car

• Premium Electric Car

Top Gear Electric Awards 2021

• Best Design

2021 Car Design Review

• Production Car of the Year

2021 IDEA Design Awards

• Gold Prize

Hyundai IONIQ 5 | Answering the Call for Sustainability

Another element that makes the IONIQ 5 special is materials

from nature. The eco-friendly materials used for the IONIQ 5,

including recycled PET bottles, sugar cane, and flaxseed oil,

are informing many people of the strengths and possibilities

of sustainable materials, and such experience serves as an

opportunity to reflect upon the importance of environmental

protection for future generations. What is more encouraging

is that the IONIQ 5 is only the beginning. The soon-to-be-

introduced IONIQ 6 will be made of materials made solely for

people and the IONIQ 7 will be showcasing materials focused

solely on nature.

In addition, the IONIQ 5 wears colors of nature. As no colors

are more beautiful than those found in nature, it showcases

such colors inspired by nature as the dove grey of pebbles in

the Seom-jin River on the southern coast of South Korea, the

dark teal green of the verdant forest of Jeju Island, and the

mud grey of the mudflats of the west coast, which have been

fully restored of their natural beauty. As the IONIQ, launched

with sustainable values in mind, continues to expand its

lineup, the selection for sound value consumption will likely

widen further, use of eco-friendly materials and protection of

the environmental will more than likely improve the quality

of people’s lives, and these factors will combine to further

enhance progress for humanity.

XCIENT Fuel Cell

setting new standards.

Hydrogen is garnering attention as an energy source for a clean environment, and is the pivotal axis

of current industrial change. At the “Hydrogen Wave” held in September 2021, Hyundai Motor Group

declared its vision of building a hydrogen society by 2040 so that hydrogen energy can be easily and

conveniently used by everyone for everything everywhere, based on which it is accelerating the pace of

commercial vehicle electrification.

In a hydrogen society, fuel cell electric vehicles (FCEVs)

are more than an eco-friendly means of transportation.

Hydrogen fuel cells applied to FCEVs require a stable

performance, strong durability, and high output, and thus

become a criterion for judging new technologies. Hydrogen

energy for FCEVs is also infinite and its production process

is eco-friendly, which enables it to perform significant roles

in facilitating joint growth of relevant industries, including

energy, steel, chemicals, and new materials that are needed

for its infrastructure.

Hyundai Motor Group became the world’s first in 2013 to

mass produce FCEVs and has been continually developing

relevant technologies, unveiling new FCEV concepts. In

cooperation with the central and local governments, the

Group developed and supplied hydrogen-powered electric

buses, and became the world’s first to mass produce a large

hydrogen-powered electric truck and exported it to Europe.

In addition, we are carrying out R&D on hydrogen fuel cell-

based advanced air mobility (AAM), large vessels, and rail

cars, and making efforts towards the establishment of a

hydrogen charging infrastructure.

The area that Hyundai Motor Company especially focuses

on in relation to hydrogen mobility is commercial vehicles.

Hydrogen-electric mobility solutions’ fuel is hydrogen, which

has the highest energy density based on weight, and the

solutions provide a high loading capacity and long driving

distance compared to pure electric mobility solutions,

making them suitable for commercial vehicles that require

long-distance driving and heavyweight transport.

Hyundai Fuel Cell Electric Truck & Bus website

46 XCIENT Fuel Cell trucks were exported to Switzerland

in 2020 and recorded a cumulative driving distance of 3.8

million km as of May this year. Based on eco-friendliness as

well as the truck’s driving performance of stably operating

on mountainous areas in Switzerland, XCIENT Fuel Cell is

receiving a good response from local customers.

In case of hydrogen-powered electric buses, 193 units of the

ELEC CITY was adopted across the nation, beginning with

Changwon City in 2019. It successfully entered overseas

markets by being exported to Saudi Arabia in 2020, and was

adopted for a regular route of an intra-city bus in Vienna,

Austria in 2022, thus proving its marketability. Ensuring

fast charging and a long driving range, the ELEC CITY was

recognized as being able to operate stably even in difficult

road conditions in Vienna, where there is high traffic volume

and many traffic signals, and is expected to expand areas

where it is driven to include Graz and Salzburg.

Hyundai plans to unveil an extensive commercial vehicle

lineup to which hydrogen fuel cells are applied. We will also

widen the use of hydrogen energy to cover ships that use

hydrogen cells, trams, hydrogen forklifts, and construction

vehicles. Powered by hydrogen, an infinite clean energy,

hydrogen-powered electric trucks and buses are expected

to perform significant roles in our achievement of the net

zero goal and air environment improvements.

Setting

the Course

Whenever roads are jammed with traffic, many drivers wish they could

fly and move freely. The heat and fumes from vehicles congesting cities

are a burden to the Earth and humanity. Hyundai looks for solutions to

inconveniences and issues caused by urban traffic congestions in future

mobilities that can reduce environmental impact and enhance mobility.

The IONIQ 5 robotaxi, a next-generation mobility platform to be launched

in 2023, is a new concept fleet based on humanism, electrification and

autonomous driving technology combined. Mobility will become safer

and more pleasant for all as the new mobility solution, like the human

mind, pursues the maximum comfort of passengers and respects Earth’s

environment. Once the eco-friendly mobility platform becomes available,

carbon footprints will decrease and urban populations will breathe easier.

Moreover, the philosophy and technology of the IONIQ 5 robotaxi will be

expanded to future core projects of Hyundai, such as AAM and PBV. The road

to carbon neutrality goes through the next-generation mobility platform.

PLATFORM SOLUTION

An autonomous driving e-mobility vehicle taking passengers

to their destinations effortlessly, without a driver or

discharging CO

, is a reality closer than ever before. In 2021,

Hyundai announced that a fully autonomous IONIQ 5-based

robotaxi would be roaming the streets of major countries in

2023 and unveiled an actual one. The IONIQ 5 robotaxi is a

new concept mobility platform created in close cooperation

between Hyundai and Motional

, each leading electrification

and autonomous driving, respectively, the two most

innovative technologies in the area of mobility.

There are considerable benefits that a single IONIQ platform-

based, self-driving vehicle can generate. The most important

benefit is safety. The autonomous system to be applied to

the IONIQ 5 robotaxi is the product of decades of innovation.

We currently operate public robotaxi fleet in Las Vegas,

the US, where we’ve conducted over 100,000 public rides,

proving the safety of our autonomous driving technologies.

Motional also has been perfecting its autonomous systems

through thousands of rigorous tests. Such autonomous

driving technologies whose safety has been proven will

make mobility into a more efficient, trusting experience.

The second significant benefit is a greater freedom of mobility

for more people. Robotaxis will offer excellent accessibility,

affordability, and reliability to professionals wanting to make

the most of their commutes, to parents in a hurry to take their

children somewhere, and to the elderly and disabled suffering

from a lack of accessible transportation options.

A joint venture of Hyundai and Aptiv headquartered in Boston, US,

and one of the world’s leading developers of autonomous vehicles

Vehicle that is supplied in large numbers to the government, car-sharing

companies, rental car companies, and other corporations

IONIQ 5 Robotaxi

meet tomorrow’s technology, today.

Hyundai is pursuing new concept of mobility that enhances mobility yet minimizes environmental impacts. Although it is a

road no one knows where or how long it would take, we take on challenges and reap rewards, ceaselessly. In 2021, we chose a

robotaxis that self-drives on electric power as our next-generation mobility platform that will sustain our net zero vision, thus

accelerating the innovation of the platform with a 2023 launch in mind.

Say Hello to the IONIQ 5 Robotaxi

2021 PROGRESS

The third is that the electrification of fleet vehicles

, such

as the robotaxi, enables cities to consume less energy and

to solve traffic congestion, which in turn will reduce GHG

emissions more and faster than individuals purchase and

drive EVs. The more robotaxis are on the road, the more

they can absorb urban demands for mobility, thereby

accelerating the progress toward net zero. Once the IONIQ

5 robotaxi starts in 2023 to roam cities and platforms around

the world, the cities will be relieved of their suffering from

traffic congestions, and the realization of our net zero goal

will become more prominent.

Empowering

the Future

As addressing the climate crisis is a common task for humanity, we

need to act rather than talk and go beyond making plans and execute

them. In particular, as leading corporations are expected to take on

daring challenges, Hyundai takes on new challenges – RE100 aimed at

achieving 100% renewable electricity.

As RE100 encourages corporations to go carbon free 100%, Hyundai

joined the global initiative in 2022, submitting a plan to fully adopt

renewable energy by 2045. Although it is neither familiar nor easy, we

will complete the transition by working in unison with all stakeholders.

Such voluntary actions will result in more than financial gains, and

communities that will have experienced such a manifestation of

trust and solidarity can move together towards the bigger goal of a

sustainable development of humanity. On this path, Hyundai will fill all

space with an energy healthy for the Earth and humanity.

ENERGY SOLUTION

RE100

supporting the global initiative

as a global corporate citizen.

As Korea’s leading company and global corporate citizen, Hyundai supports the national effort to

achieve net zero by 2050. We also take part in the global effort to limit the increase of Earth’s surface

temperatures to 1.5

℃

above pre-industrial levels. Accordingly, we strive to reduce the carbon footprints of

our automobile production operations by accelerating the adoption of renewable sources of energy. Also,

by building state-of-the-art facilities that help improve energy efficiencies in production, adopting

the

latest in carbon reduction technology, and exploring other means, we seek to achieve net zero by 2045.

“Renewable Energy 100%” initiative bringing together the world’s most influential

businesses committed to 100% renewable electricity. Launched in 2014 by The

Climate Group, a global non-profit group, and Carbon Disclosure Project (CDP), a

global environmental management certification organization.

Together with major Hyundai affiliates – Kia, Hyundai Mobis,

and Hyundai Wia –we plan to make concerted efforts

to reduce carbon emissions through 100% adoption of

renewable sources of energy. To make our resolve public and

thereby official, we applied for membership of RE100

in July

2021, and in the following April, became a member of the

global initiative committed to 100% renewable electricity.

Even before its declaration to join RE100, Hyundai has been

expanding the adoption of energy-saving technologies

across production operations. A rooftop photovoltaic power

generation facility was installed at the Asan Plant in 2013,

producing around 13,000 MWh of electricity per year. In

2020, a photovoltaic power generation facility was set up at

the Ulsan Plant in collaboration with Korea Hydro & Nuclear

Power, generating around 12,500 MWh of electricity annually.

Hyundai’s joining RE100 is expected to further accelerate its

transition to renewable energy in a more systematic manner.

Planning to complete our renewable energy transition by

2045, we have chosen our factory in the Czech Republic, as a

first site to go renewable energy 100%, for its easy access to

renewable energy supplies. Other sites in India and the US are

to follow suit soon. In accordance with each target country’s

renewable energy supply as well as regulatory environments,

we will push forward our 100% renewable energy transition

ambition one site at a time, freeing all our overseas plants of

carbon footprints by 2045.

In addition to renewable energy power generation facilities,

we will purchase renewable energy certificates, sign power

purchase agreements (PPAs) with renewable energy power

suppliers, and take other measures deemed optimal to the

characteristics of each site. Also, by drawing up detailed

execution plans by year, we will fulfill our promises to the

nation and the global community.

Eco-friendly vehicles produced at clean energy-powered

plants roaming all around the world without emitting carbon

– this is the future mobility we seek to realize with our net

zero goal. Our efforts to achieve net zero will continue until a

world of truly sustainable and enjoyable for all is realized.

The climate crisis, unfolding wider and faster, can be stopped

only through action. Hyundai, seeking to achieve net zero

across all of its value chains by 2045 and thus enable the next

generation to live in a carbon-zero society, is acting upon its

goal. We are pursuing the goal with positive energy until a

world comes that is truly sustainable and enjoyable for all.

And our vision of sustainable future will become a reality

sooner when more people join our pursuit of the goal.

We held an “Expecting Generation One” campaign in

2021, asking all to join Hyundai’s efforts toward net zero

for “Generation One”, a first generation to live in a carbon

zero society. To spread our message even further, we joined

hands with the BBC, a global media platform, and exclusively

sponsored “2045: Memories of the Future”, a documentary

series produced by BBC Studios. The six documentaries

broadcasted on BBC World News tell stories about diverse

subjects, ranging from the future of energy to housing, food,

aviation, cities, and fashion, through the word of global

sustainability leaders. Complementing the docuseries is

a 30 second brand film created by BBC Storyworks and

narrated by BTS member RM. Through this film, we wanted

to communicate to a greater number of people that we all

have the responsibility to act against the climate crisis. As

explained in the film, nature teaches us much more when

people live with nature. Humanity can progress when we take

a good care of the Earth. When we all make concerted efforts,

our next generation will be living carbon free.

We are living in times when heroes are needed to protect

the Earth for future generations, and each one of us can

become a hero. Picking up litter while jogging, using tumblers

instead of disposable cups, buying shoes made of upcycled

plastic waste, or any other small yet responsible consumption

can help change the world. Together with numerous

heroes among all us, Hyundai will open wider the door to a

sustainable future Generation One hope for.

Generation One

our raison d'être.

Carbon Neutrality 2045 | Expecting Generation One

Innovation

Empowering future progress

centered around humanity.

All innovation efforts Hyundai undertakes are directed towards

progress for humanity. With an ardent sense of humanitarianism,

we closely examine what people need and invest in what has value.

Which is why Hyundai’s acquisition of Boston Dynamics

in June 2021

is more than another business development.

Robots now have become a familiar sight in daily life – they weld and

assemble cars, serve beverages at cafes, and keep our homes clean,

to mention a few examples. Robots are becoming ever useful, freeing

humans from repetitive work and saving lives from disasters, exploring

deep ocean trenches and conducting other highly dangerous

missions, all to the benefit of humans. Robotics engineering has great

potential to change human lives beyond the imagination of many.

Hyundai therefore acquired Boston Dynamics, thereby securing a

leadership position in the field of robotics, creating new value chains,

and opening a new chapter in the progress of humanity.

Through the acquisition of Boston Dynamics, Hyundai is integrating

and expanding its concepts of future mobility, including autonomous

driving, logistics, and AAM. The robots in the films celebrating the

acquisition are already a part of our daily lives. Boston Dynamics’

4-legged walking robot “Spot” has been helping with the non-face-

to-face treatment of COVID-19 patients at hospitals, and Spot had

also been sent to Chernobyl which has proved that robots can be a

reliable partner to humans in dangerous environments.

Progress for Humanity.

Hyundai x Boston Dynamics | As mobility evolves so does humanity

Spot does more than handle dangerous work. In a different film,

Spot is having fun dancing with BTS members. At CES 2022, it

appeared on stage together with Hyundai Motor Group’s Executive

Chair Euisun Chung and then left leisurely upon hearing “Thank you

Spot. You are a good friend”, which shows that it can be a pet friend

who knows how to share precious moments of life. The wearable

robot H-MEX that has helped a Korean National Team para-archer

Jun-beom Park stand on his own feet has been applied for a

medical device certification of the Korean Ministry of Food and Drug

Safety and the US Food and Drug Administration. The H-MEX can

enable paraparesis patients and other mobility-restricted people to

do things and go to places they could only dream about.

Upon the arrival of an era in which robots are fun, capable companions

of humans, current mobility services will be upgraded to a next

level. As a mobility company, Hyundai has always strived to enhance

people’s mobility. We take on new challenges believing that

humanity can reach new heights with the help of robots. As such,

we challenge our limits and there are no limits to challenges we take

on for people.

Expanding Human Reach,

new realities with Metamobility.

ROBOTICS OF TOMORROW

Hyundai’s robotics vision comprises “Metamobility”

combined concept of robotics and metaverse, “Mobility

of Things (MoT)” ecosystems wherein objects are given

mobility, and “intelligent robots” for humans. The core of

Metamobility is robotics redefined anew as a medium

that breaks down boundaries between the virtual and real

worlds as well as a new concept mobility. In a Metamobility

world, automobiles, AAMs, and other diverse mobilities

serve as smart devices connecting the real world with

the virtual world. Depending on user needs, a car can be

transformed into an entertainment or office space. On the

other hand, users can access the virtual world through a

digital twin

. For example, when users access their virtual

home in a metaverse, they can have a physical robot

feed and walk their real pet and can enjoy the experience

of the actions taking place in the virtual world through

synchronization with the real world.

As such, Metamobility seeks to expand mobility experiences

to virtual reality by connecting mobility and a metaverse

platform using robotics as a medium. In other worlds,

mobility ultimately enables people to overcome the

physical limitations of time and space – a world in which

human limitations are overcome as the real and virtual

worlds come together. At the celebration of the advance of

consumer electronics, we showed a Hyundai in a relentless

pursuit of innovation and progress to further expand the

human reach in the forefront of a new universe propelled

by robotics and the metaverse.

What Hyundai prepared for CES

2022 held in Las Vegas, the US, were not cars. At this much-anticipated

event held after two years of a COVID-19 induced hiatus, we did not unveil any new products. Instead,

Hyundai Motor Group’s Executive Chair Euisun Chung stepped on the platform together with robot

dog Spot and announced Hyundai’s robotics vision based on the theme, “Expanding Human Reach”,

presenting how robotics will fundamentally change the way we live, work and move in the future.

Consumer Electronics Show: Consumer electronics show where

major technology trends around the world can be identified

Digital Twin: Virtual representation that serves as the real-time digital

counterpart of a physical object or process

Hyundai x CES 2022 |

Expanding to New Realities with Metamobility

This module spins freely and moves flexibly, and attached

LiDAR and camera sensors recognize the surrounding

environment in real time. It can provide mobility to any object,

from a small table to a large container that it is attached to.

Users can customize the placement and the number of PnD

modules attached to the object and reconfigure a specific

space according to their needs. Also possible is a situation

in which a space itself comes to people, thus obviating the

need for people to visit the space in question. Expecting

such various cases for the use of PnD module as a personal

mobility in the form of PBV and as a logistics transport

solution, we created a video of a future based on PnD-

enabled mobility, and presented it at CES 2022. Imagining

a future MoT ecosystem, in which objects come to humans

rather than vice versa and spaces are connected with one

another and move for the convenience of humans, we have

reaffirmed the infinite possibility of robotics.

Mobility of things ecosystems based on robotics technology in which users designate space and time desired and assign mobility to objects to create a cyclical

mobility of the objects within a preconfigured city.

Moving humans

beyond limitation.

As a mobility company, Hyundai’s ultimate goal is to build MoT ecosystems

wherein all objects can

move without physical limitations. To clarify this vision is not a distant dream, at CES 2022 Hyundai

unveiled a robot that will move the world in a new direction. This special robot, named Plug & Drive

(PnD) module, is a holonomic platform that can move in all directions. The PnD module can be

described as a new concept platform designed to enable coupling with any object, as implied in the

name ‘Plug & Drive’, by combining driving, steering, braking, and suspension.

Our robotics vision is more than a blueprint about future

robots. It is about such realities surrounding our lives as

wearable robots enabling people to exert more power and

robot dogs exploring places beyond our reach. Going forward,

Hyundai will continue to develop various new robotics

technologies, with which we will break down all conventions

and prejudices and set a new standard for mobility.

Hyundai’s robotics is based on the philosophy of “Progress for

Humanity”. We focus on people-centric robotics technologies

that help people by freeing them from mundane work,

supporting their work, and producing goods and services.

Through robotics, we will completely transform the way we

work, live and move and thus reconstitute spaces.

Hyundai x CES 2022 |

Move Things Beyond Imagination

Exceeding Human Limits,

enriching people’s lives.

ROBOTICS FOR TODAY

A leading example is “DAL-e”, a customer service robot

employed at the Hyundai Songpa Daero Branch after

its introduction in January 2021. DAL-e is Equipped with

facial, voice, and action recognition, natural speech, and

autonomous driving technologies. It can turn 360° and move

freely while detecting and avoiding obstacles. We are also

developing an EV automatic-charging robot that quickly

locates an electric vehicle’s charging port to automatically

insert the charger and removes it after charging is completed.

The automatic charging robot is expected to free EV drivers

of the inconvenience of handling the heavy charging cable

and charging gun as well as of the anxiety of high voltage

associated with charging EVs.

In addition, we have developed a “Factory Safety Service

Robot” by combining Boston Dynamics’ quadruped robot

Spot and Hyundai Robotics Lab’s AI-based Processing

Service Unit. The robot was in a pilot operation at Kia’s

AutoLand Gwangmyeong factory. Equipped with 3D LiDAR,

thermal camera, front camera, and other various sensors and

deep learning-based real-time data processing technologies,

the robot performs tasks such as detecting whether doors are

open or not, high-temperature risks and trespassing.

Meanwhile, Hyundai is working together with Kia to build a

smart factory ecosystem that connects people, nature, and

technology under the brand name of “E-FOREST”. The letter

“E” refers to our resolve to advance the mobility industry

Environment in a manner more Efficient and Economical

than ever before. It also refers to our commitment to

achieving innovation for Everyone in a bid to deliver foremost

Excellence. FOREST stands for an ecosystem embracing

all these factors. To realize all the objectives suggested in

the brand name, Hyundai is pursuing flexible, innovative

vehicles (Auto-Flex), AI and big data-based intelligent control

(Intelligence), human-friendly smart technology (Humanity),

and carbon neutrality through eco-friendly workplace (Green).

The agricultural sector is no exception to automation.

Agricultural robots deployed to increase agricultural

productivity and crop yields are embedded with cutting-

edge technologies, such as AI, sensors, and data analysis,

and help resolve agriculture-related issues, such as food

and labor shortages. In addition to UAVs, automatic

harvesting systems, and unmanned ground vehicles that

help managing extensive farmlands, wearable robots have

recently been gaining attention for they are appropriate

for small to mid-sized farms in general and orchards

in particular, as workers mainly perform manual work.

Our Robotics Lab has been working on wearable robot

development in collaboration with Hyundai Rotem. In

October 2021, we unveiled three types of wearable robots

– vest type (VEX), chair type (CEX), and A-frame carrier

type (H-Frame) – at the International Agriculture Exhibition,

and will soon become a first in Korea to commercialize

wearable robots for agricultural use.

Wearable robotics technology is directly applied to the

human body. Once wearable robots become a part of daily

life, work efficiency and productivity will increase at industrial

sites, as the case of worker injuries and worker fatigue will go

down. They will enable people to easily pick up heavy objects

in daily activities. In order for robots’ ESG values to garner

more attention and disseminate farther, Hyundai will share

its philosophy and technologies with partners in Korea and

abroad and expand the scope of cooperation.

As robots are increasingly viewed as capable of helping humans overcome their limits they have

become more ubiquitous. Hyundai is closely collaborating with various partners to discover even

more everyday applications for robots.

Welcome to the Family with BTS

Contribution

Empowering better progress,

driving our actions forward sustainably.

“Progress for Humanity” is a key value that all Hyundai employees

uphold as well as a goal everyone should pursue in unison for the sake

of the environment, society and co-existence. We therefore place

people at the center of creating shared value (CSV) and continue our

efforts towards change for a sustainable future.

Manifesting this commitment toward sustainable future, in January

2022 we launched “Hyundai Continue” an initiative that encompasses

all our global CSV activities. Unfolding under the manifesto,

“Connected as one, we start to connect”, the initiative pursues three

objectives – harmonious co-existence of humanity and Earth, freedom

in mobility and connection, and hopes for future generations.

First, for co-existence of humanity and Earth, we are increasing efforts

for reducing carbon footprints and addressing climate change from

the perspective of resource circulation and ecosystem restoration.

Specifically, we have been supporting the restoration of marine

ecosystems in Europe and tropical rain forests in Brazil. In particular,

some of the plastic wastes collected through the marine restoration

operations are upcycled and used as auto interior materials. “The

Journey of PET”, a video unveiled together with the project, is not

about imaginary subject matter. The story of how plastic bottles,

after years of floating in the ocean, are “rescued” and upcycled

into materials for the interior of eco-friendly vehicles is a record of

Hyundai’s journey towards a sustainable future exploring resources

and technology to preserve the connection between Earth and people.

Second, Hyundai strives for sustainable methods that would enable

anyone to move freely. We help physically impaired victims of auto

accidents drive again using a virtual driving simulator and support

children’s safe commute to/from school. Lest physical disabilities

cause mobility difficulties, we develop new mobility services for the

people with limited mobility and continue other efforts to realize

freedom in mobility and connection.

The Journey of PET

Lastly, with the aim of creating an environment that would encourage

future generations to have hope, dream big and take on challenges

accordingly, we carry out various activities for children, teenagers, and

youths in local communities of the world around our business sites.

Leading examples include “Hope on Wheels”, which has since 1998

been supporting pediatric cancer research in the US, and “H-Mobility

Class”, a core technology talent-nurturing program launched in

2020 for undergraduates and graduates studying natural sciences or

engineering.

Based on our key value, “Progress for Humanity”, we have been

contributing to the resolution of social issues by leveraging our eco-

friendly mobility capabilities and technologies, and carrying out

diverse CSV activities for local communities and future generations.

We will continue to connect people with the Earth, offer freedom in

mobility, and ensure a better future for future generations; and such

resolves are implied in the infinite symbol of the Hyundai Continue

logo. However, we cannot do this alone. The future we dream of will

become a reality when employees, global partners, customers, local

community members and many more people are connected; when

many more efforts come together; and when we move forward

encouraging one another toward common goals. Hyundai will carry

on this virtuous cycle of connection.

Inspired by Nature,

Caring for the Earth

The name “NEXO”, which has led the popularity of

hydrogen-powered EVs, refers to “water spirit”. The

“IONIQ 5”, the first model of the EV-exclusive brand

IONIQ, wears colors of nature. Hyundai’s “Solar Roof”,

ushering in an era of self-charging EVs, offers the

unlimited clean energy as an energy source. Our EV

designs are in sync with nature, and eco-friendly

technologies are either inspired by nature or based on

nature’s principles.

Nature is a foundation of life, essential for humanity’s

survival and prosperity, as well as a driver that

enables sustainable development. To protect and

cherish the Earth, we continue our efforts to coexist

with the Earth.

Harmonious co-existence of humanity and Earth

Hyundai x Healthy Seas

keeping our ocean clean, together.

CO-EXISTING WITH THE OCEAN

FOR THE NEXT GENERATION

Future generations have every right to enjoy a pristine marine

environment. In order to protect their rights to beautiful

ocean, Hyundai continues to expand collaborations with local

communities and NGOs, aimed at preserving Earth’s ecosystems.

On the occasion of June 8, 2021, World Oceans Day, we signed

a partnership with two organizations dedicated to marine

environment preservation and sustainability, and accordingly,

we supported the large-scale cleanup by Healthy Seas of waters

around Ithaca, Greece. We also provided non-profit Divers Alert

Network (DAN) with Kona Electric vehicles for its safe DAN Europe

Sustainable Tour.

HYUNDAI X HEALTHY SEAS

Ithaca is a small island in Greece blessed with an awe-inspiring

natural landscape dotted with relics of an ancient civilization.

In 2012, a nearby fish farm went out of business, leaving behind

fishing nets and other equipment strewn in the surrounding

sea, then in 2020, a major storm hit the island, sweeping

thousands of tons of industrial materials into the sea, including

plastic pipes, concrete blocks, and rusty industrial wastes. To

help restore the Mediterranean jewel’s natural beauty, in 2021

Healthy Seas launched a large-scale marine ecosystem clean-

up supported by Hyundai.

Afterwards, we enabled clean-up activities on 11 occasions in

seven countries in Europe, including the UK, France, Germany,

Spain, Italy, Greece, and the Netherlands. We provided

vehicles for transport and brought in cranes and other heavy

machinery for picking up large pieces of trash, leading to the

collection of a total of 78 tons of waste. The retrieved fishing

nets were all transformed by Aquafil, a textile manufacturer,

into ECONYL®, a nylon textile used to make socks, swimwear,

sportswear, carpets, and IONIQ 5 floormats, to the delight of

eco-conscious consumers.

Hyundai x Healthy Seas | The Journey to Ithaca

Our first activity as partners was large-scale marine ecosystem restoration

and the clean-up in Ithaca, Greece. This was followed by 11 clean-up

dives in seven European countries. 72 divers from across Europe worked

together and collected more than 78 tons of waste. Of these wastes, nets

were changed into textile by another partner, Aquafil. A significant part of

that marine litter was recycled, while the nylon fishing nets were handed

to our partner Aquafil to be transformed, together with other nylon waste,

into ECONYL® yarn, the material IONIQ 5 floormats are made of.

We will return to Ithaca in 2022 and restore more beaches and marine

ecosystems with the aim of finishing the job we started in 2021. We feel

reassured to have Hyundai as a partner that we can gather our strengths

with for a common goal. We hope to engage in closer cooperation to

generate a positive effect, both for the environment and for society.

Veronika Mikos

Director of Healthy Seas

2021 PROGRESS

Performance of Hyundai x Healthy Seas in 2021

waste collected

Tons

divers involved

Person

(UK, France, Germany, Spain, Italy, Greece,

the Netherlands)

Countries

Activities

• Planted 23,250 trees, including pine trees and zelkova trees

• Absorb 225 tons of carbon dioxide and 1,100 kg of fine dust per year

2016-2020

• Donated 9,000 air-purifying plants

(elementary school classrooms)

• Absorb 30% of fine dust and 20% of

ultra-fine dust

2019-2020

• Planted 3,400 trees,

including camellias

2021

IONIQ Forest Milestones

IONIQ Forest

keeping our green race, together.

PLANTING TREES FOR THE NEXT GENERATION

Clean air is essential for building a better world for the next

generation. Hyundai acts for “Generation One”, a first generation

to live in the coming net zero era. In 2016, we joined hands with

Tree Planet to create an IONIQ forest in a closed landfill of Incheon

city by planting 23,250 trees. Over the five years, the trees have

grown over the height of average adults, absorbing 225 tons of

carbon dioxide and 1,100 kg of fine dust per year, and growing into

a forest. For two years in 2019 and 2020, we brought a forest into

the classroom. We donated around 9,000 plants to 33 elementary

schools in Seoul and Incheon to be used as air purifiers for 924

classrooms. Distributed to each classroom in batch of 10 plants,

the natural air purifiers absorbed 30% of fine dust and 20% of

ultra-fine dust in the classroom, helping the young students

breathe cleaner air.

IONIQ FOREST SINSIDO

In 2021, Hyundai began a new attempt’ through the IONIQ

Forest project. We visited a beautiful Sinsido island, located

some 50 km southwest of Gunsan City, North Jeolla Province,

and in cooperation with Sinsido National Recreation Forest,

began an “IONIQ Forest Sinsido” project restoring forest trails

and preserving the island’s biodiversity. Together with Tree

Planet, we planted 3,400 trees on the island, including 300

camellias, visualizing a Sindido looking more beautiful and

pristine in a few years.

Thanks to the IONIQ Forest Sinsido Project, the island has

become a tourist destination to enjoy and protect nature at the

same time. Visitors to Sinsido experience eco-friendly life during

their brief stay on the island without leaving a trace. As more

people visit Sinsido and take part in zero-carbon activities, the

air will become cleaner. Acting on this belief, we will continue

to plant trees for the benefit of future generations together with

people who love forests and treasure the Earth.

IONIQ Forest Sinsido

Environmental issues are getting more serious. If we

forget that humans are also part of nature, we will be

able to neither resolve environmental issues nor ensure

a sustainable tomorrow.

Hyundai and Tree Planet have been cooperating for

social innovation years before environmental issues

gave rise to global movements headed by ESG. I

believe social innovation is based mainly on a market-

business-partnership. Market can be defined as an area

where social issues arise and increase, while business

defined as innovative, sustainable solution creation,

and partnership as people sharing a clear philosophy

and strong ability to define and resolve issue. We have

been building a partnership with Hyundai since 2016,

creating meaningful changes in consideration of these

three factors.

Tree Planet has learned how to get citizens involved

while interacting with them over the past ten years or

so, and also become aware of the value of partners’

ability to execute their commitments. The IONIQ

Forest project, in which we had some 1.5 million

people participate together with Hyundai, has shown

that an innovative and sustainable solution can be

discovered when people’s participation meets partners’

cooperation. In line with ESG trends, we will continue

our partnership with Hyundai from a long-term

perspective and create more ESG trends.

Hyung-soo Kim

CEO of Tree Planet

Embracing Responsibility,

Toward Universal Mobility

Vitalize, Enable, Care. These are the new values of

future cities Hyundai unveiled at CES 2020 along

with its human-centered mobility vision. Accordingly,

we have since been focusing on developing mobility

solutions that help people significantly reduce travel

time and overcome urban boundaries, use their

commuting time more meaningfully and achieve

more goals, and form new communities and connect

with one another.

In promoting the core value of caring cities in

particular, we are focusing on “Universal Mobility”

research. Pondering sustainable ways for the mobility-

impaired and all others to move freely whenever

needed, we continue our efforts to make unrestricted

mobility and connection into a reality.

Freedom in mobility and connection

EnableLA

enabling all to move, forward.

UNIVERSAL MOBILITY BEGINS

WITH ENABLELA

Freedom of movement should be enjoyed by all. This natural

right should not be infringed on the account of a physical

disability, age, financial insufficiency, or any other conditions.

Which is why Hyundai has started developing new mobility

services for the mobility-challenged.

In 2021, Hyundai in cooperation with Kia launched “EnableLA”,

a ride-hailing service for wheelchair users and people with

accessibility challenges in Los Angeles, US. As implied in the

name, the service embodies Hyundai’s hope and resolve to

realize caring cities that enable everyone to move free of their

physical limitation, starting in LA.

When a customer requests for awheelchair-accessible

ride service using the dedicated mobile app or calling a

designated number, a professional driver trained in the field

of assisting the mobility-impaired picks up the intended

passenger(s) and drives them to their destinations in

comfort and security. The ride-hailing app was developed

by ButterFLi, an LA-based mobility platform provider for

people with accessibility challenges. The Hyundai Palisade

models used in the service are modified to comply with the

US Americans with Disabilities Act (ADA) and to provide

the mobility-impaired with all the convenience and safety

features possible. The height of the vehicle’s interior space

is increased and safety devices are added, in addition to the

installation of a floor and a wheelchair ramp in the vehicle’s

rear which enables passengers to get on the service vehicles

without getting out of their wheelchair. The inside is equipped

with UV-free antimicrobial lights as well as disposable masks,

hand sanitizers, and disinfecting wipes, thus enabling the

passengers to use the service without a concern even during

the COVID-19 pandemic.

FUTURE CARING CITIES CONFIRMED

BY ENABLELA

EnableLA is the first pilot program implemented as a part of

the “Universal Mobility” research project Hyundai has been

conducting to realize future caring cities. The pilot program

was run for six months to February 2022 and given a high

level of passenger satisfaction. After the pilot service, all

service vehicles were transferred to ButterFLi so that the local

program partner could continue to offer the EnableLA service

in LA. Beginning with EnableLA, we will identify service

and vehicle issues to be improved by communicating with

mobility-impaired individuals, and will thus set directions

for Universal Mobility to advance going forward. We will

particularly focus on technology improvements to be made

inside the vehicles with an eye toward applying better

solutions to future vehicles and services and thus serving

mobility-impaired individuals better.

As such, in the future cities that are completed with our

technologies, we envision freedom of movement available

to all people, including the mobility-impaired.

Hyundai will

create new mobility means so that all people can experience a

complet

e freedom of movement and truly enjoy the moment

of doing it.

2021 PROGRESS

Envision the future

mobility enabled by

Hyundai’s innovation

and contribution,

centered around

humanity.

Hyundai is here to do the right thing for humanity.

By choosing carbon neutrality, a more pressing value for the future,

by readily investing in things of value and expanding the scope of cooperation,

by connecting the world with mobility and adding value to time and space,

we create a mobility ecosystem that is beneficial to all.

We have always faced the future ahead of others.

Delivering on freedom of movement through technology and

innovation and thus realizing “Progress for Humanity”,

Hyundai promises a sustainable encounter with future generations.

In Progress with an Eye to the Future.