Hyundai Transys to supply reducers to Saudi Arabia’s Ceer

[Courtesy of Hyundai Transys Inc.]

Hyundai Transys Inc., a reducer manufacturer for electric vehicles (EVs), is set to supply reducers for Ceer Motors, a Saudi Arabian EV brand.

According to industry sources on Monday, Hyundai Transys is finalizing contract details with Ceer, including production volumes and supply plans, with the contract valued in the millions of dollars. The deal is Hyundai Transys‘s first order from a non-Hyundai Motor Group automaker.

Reducers are essential EV components alongside motors and batteries that control vehicle speed by adjusting power from the battery to the motor, similar to transmissions in internal combustion engine vehicles.

Founded in 2022 by Saudi Arabia’s Public Investment Fund (PIF) and Taiwan’s Foxconn Technology Co., Ceer aims to release electric sedans and SUVs by 2025. Even though the company has yet to unveil any prototypes, global auto parts suppliers are fiercely competing for contracts as Ceer is central to Saudi Arabia’s new business strategy.

Saudi Crown Prince Mohammed bin Salman (MBS) announced the Saudi Vision 2030 in 2016, which aims to reduce oil reliance and foster new industries, including EV manufacturing. The crown price chairs Ceer, and key Saudi ministers sit on its board, with the company appointing James DeLuca, former CEO of Vietnam’s VinFast Auto Ltd., as its CEO in late 2022.

Hyundai Transys began producing reducers primarily for Hyundai Motor Co. and Kia Corp. in 2021. Despite the competitive market that is dominated by companies like Bosch Ltd., BorgWarner Inc., and Magna International Inc., Hyundai Transys is achieving positive results, thanks to the continuous investment and organizational strengthening it has implemented since 2021.

The company‘s quarterly report shows its annual EV powertrain production capacity grew from 410,000 units in 2021 to 920,000 units in 2023, with a goal of 1.12 million units in 2024. These reducers are supplied to Hyundai Motor Group EV models including the Ioniq 5, EV6, and electrified GV70.

Hyundai Transys reshuffled its R&D structure in 2024 to enhance its EV business, shifting from internal combustion engine-focused R&D to electrification and expanding from two to five electrification research labs.

The Ceer contract is also expected to create synergy with Hyundai Motor Group’s plans in Saudi Arabia. Hyundai Motor is building a CKD plant in King Abdullah Economic City (KAEC), which will have an annual capacity of 50,000 units by the first half of 2026 and is a joint venture with PIF. Hyundai Motor Group Executive Chairman Euisun Chung attended the CKD joint venture signing ceremony in October 2023, highlighting the group‘s interest on the Middle Eastern market.

With Hyundai Transys supplying reducers to Ceer and Hyundai’s CKD plant both in KAEC, there is speculation that Hyundai Transys could open a reducer factory in the region. Hyundai Transys currently operates internal combustion powertrain plants in China, India, and Mexico, and may foresee additional reducer opportunities with another EV plant in KAEC by U.S. automaker Lucid Motors Inc.

According to Future Market Insights, the EV reducer market was valued at $1.98 billion in 2023 and is projected to grow at an annual rate of 26.6 percent until 2033.