Hello. This is Michael Yun, Head of IR Group.

Welcome everyone to Hyundai Motor Company's 2026 Q2 business results conference call. On behalf of Hyundai Motor Company, I appreciate your time for participating in today's call.

Please refer to the presentation HMC 2026 Q2 Business Results on our IR website. This presentation includes quarterly highlights, sales performance, and profit analysis.

For quarterly summarized cash flow statement and detailed regional sales breakdown, please refer to the appendix. First is Q2 highlights.

Despite stagnant industry demand in the US, one of our key markets, our market share in the US rose by 0.2 percentage point year-over-year to 6.3%, maintaining market share in the 6% range for the five consecutive quarters. In response to strong hybrid demand, the global hybrid sales reached a record quarterly high of 188,000 units, and the share of global hybrid sales recorded an all-time high of 18.9%.

In the US market, the share of hybrid sales reported 26.2%, continuing its growth momentum. Finally, despite unfavorable business conditions with demand slowdown, market share growth in major markets and robust hybrid sales led to the highest second-quarter revenue on record.

Next is the sales performance. In the second quarter of 2026, global wholesale sales totaled 992,000 units, down 6.9% year-over-year, primarily due to a decline in global industry demand and part supply issues.

Retail sales totaled 999,000 units, representing a 4.2% decrease from the previous year. Next, I will go over details about our wholesales by key markets.

In the US market, sales increased 0.9% year-over-year, totaling 265,000 units, while industry demand remained largely flat with a 0.5% increase from the previous year. Demand for electrified vehicles supported by factors such as elevated fuel prices continued to drive sales.

Electrified vehicle sales increased 2.5% year-over-year, reaching 81,000 units. Hybrid sales accounted for a record-high 26.2% of total sales.

Amid weaker consumer sentiment caused by uncertainties surrounding interest rate cuts and persistently high inflation, demand concentrated on practical vehicle segments such as mid-sized sedans, resulting in sedan sales increasing 9.6% YoY. In Europe, sales decreased by 10.9% YoY, totaling 144,000 units.

Optimization of product mix drove SUV sales to rise 0.4% YoY, and hybrid sales increased by 17.8%. Despite challenging sales environment, mix improvement was achieved by focusing on high-margin vehicles.

Strong hybrid sales continued in Europe as well, driving electrified vehicle sales up 3.7% YoY to 75k units. To respond to growing demand for electrified vehicles, we plan to strengthen our EV lineup and further expand sales momentum in the market through the launch of the all-new IONIQ 3 in the second half of the year.

In the domestic market, sales decreased by 16.4% YoY to 158,000 units due to production disruptions caused by a fire at a major parts supplier. However, EV sales rose 30.8% YoY, driven by government incentives for eco-friendly vehicles and IONIQ lineup.

However, due in part to hybrid supply constraints, total electrified vehicle sales declined 7% YoY to 64,000 units. In the second half of the year, with the rollout of key new models including the Grandeur hybrid, Avante hybrid, Tucson hybrid, and Genesis hybrid models, we plan to restore sales momentum and further expand electrified vehicle sales.

Next, I will explain the sales analysis by vehicle types. Global SUV sales, including Genesis, totaled 611,000 units, accounting for 61.6% of total sales.

While EV sales declined 12.7% YoY, hybrid vehicle sales increased 11.3%, continuing their strong growth trajectory and driving overall sales performance. As a result, total electrified vehicle sales rose 1.7% from the previous year to 266,000 units.

This concludes the discussion on sales, and I will now provide an explanation regarding profits and losses. First is income statement.

Consolidated revenue increased by 1.9% YoY to ₩49.2 trillion, and operating income decreased by 20.8% YoY to ₩2.9 trillion. In the automotive division, revenue decreased by 2.1% YoY due to lower sales caused by the global demand slowdown and disruptions in part supply.

Operating profit decreased by 11.5% YoY due to higher incentives and unfavorable mix resulting from production disruptions of high-margin models. Revenue from the finance division increased by 15.7% YoY, and operating profit increased by 16.2%, driven by a continued high penetration rate and growth in managed assets in the US market.

Net income decreased by 11.1% YoY to ₩2.9 trillion as a result of operating profit decline. Next is quarterly revenue and operating income analysis.

Revenue benefited from favorable exchange rate, contributing ₩2.7 trillion, while decreased global wholesales resulted in a negative volume effect of ₩2.25 trillion. Additionally, rising incentives resulted in a negative mix effect of ₩1.01 trillion.

Combined with growth in the financial segment, total revenue rose 1.9% YoY. Despite the record-high second-quarter revenue, positive foreign exchange impact was reduced to ₩238 billion due to higher quarter-end exchange rates relative to the quarterly average exchange rate.

In addition, sales decrease in Middle East region and sales disruptions caused by part supply issues resulted in a negative volume effect of ₩542 billion. Regarding the mix effect, despite favorable contributions from increased sales of high-margin models including hybrids, a negative impact of ₩569.9 billion was recorded due to higher incentive spending resulting from intensified competition in major markets.

As unfavorable business conditions and intensified market competition negatively impacted our profitability, operating profit decreased by 20.8% YoY to ₩2.8 trillion, resulting in an operating profit margin of 5.8%. The last part is SG&A and net profit.

Our Q2 cost of goods sold ratio recorded 82.2%, an increase of 3.3 percentage YoY due to the rise in material costs. SG&A recorded ₩5.9 trillion, a 6.8% increase compared to last year, due to higher sales warranty provisions resulting from the increase in quarter-end exchange rates.

Finally, our net profit decreased by 11.1% to ₩2.9 trillion as a result of operating profit decline. This concludes the end of the presentation of the 2026 Q2 business results.

Thank you for listening. Next, Executive Vice President Seung Jo Lee, the Head of Planning and Finance Division, will assess the company's business results in Q2.

Good afternoon. This is Seung Jo Lee, Executive Vice President and Head of Finance Division.

I will now present Hyundai Motor Company's 2026 Q2 business performance as well as details regarding the Q2 dividend. In the second quarter, unfavorable business conditions persisted due to geopolitical issues, US tariffs, and inflation.

Production disruptions caused by component supply issues from both domestic and overseas suppliers combined with decreased sales in the Middle East region resulted in global wholesale volume declining 6.9% YoY to approximately 992,000 units. Despite these challenges, we achieved continued top-line growth driven by robust sales in the North American market and record-high hybrid vehicle sales.

Additionally, favorable FX effects from the continued weakness of the Korean won contributed to a record-high quarter revenue of ₩49.2 trillion, representing 1.9% growth YoY. Next is our operating profit.

Production disruptions occurred primarily in Genesis due to component supply issues from suppliers. This not only resulted in lower sales volumes, but also negatively impacted the product mix.

Combined with increased incentive spending to respond to intensified competition in major markets and clear inventory of aging models ahead of new model launches, operating profit reached approximately ₩2.85 trillion. The operating profit margin declined 1.7 percentage point YoY to 5.8%.

Our domestic plant, which is the largest facility among all global plants, experienced a supply interruption of engine valves due to a fire at our component supplier. This resulted in production delays affecting Hyundai's major volume models and Genesis vehicles.

To minimize production losses, we made efforts to shift production to alternative vehicle models. By May, we successfully completed the development and application of substitute engine valves across all products.

However, since most of the affected vehicle models were high-margin vehicles, the product mix deteriorated in the second quarter, which had a negative impact on operating profit. Additionally, a fire at Hyundai Mobis India plant caused temporary production disruptions at our HMI plant.

To minimize the impact of these domestic and international production disruptions, we maximized the use of existing inventory in the second quarter, and we expect to recover these losses in the second half through expanded production. Due to the Middle East conflict and inflationary pressures, prices of key raw materials such as plastics have risen sharply.

In the second quarter, raw material costs increased by around ₩400 billion. However, to offset this impact, we have implemented company-wide material cost reduction initiatives, successfully offsetting approximately 50% of the negative impact from raw material price increases.

We continue to pursue these cost-reduction efforts. As major raw material prices have begun to trend downward in the second half of the year, we anticipate that the negative impact on profitability from rising raw material costs will be further reduced in the second half.

In addition, I will explain the major factors affecting our financial results, including incentives and foreign exchange effects. First, we expanded incentives in response to the evolution of the US IRA and aggressive market entry and sales expansion of Chinese electric vehicles in Europe.

Additionally, ahead of new model launches in the second half, we executed incentives to clear inventory of aging models, which resulted in expanded incentive spending in the second quarter. However, as major new models are launched in the second half, we are targeting a normalization of incentive spending in the second half.

Finally, regarding currency exchange rates, as the Korean won continued to weaken, the average exchange rate increased compared to the same period last year, resulting in a favorable currency exchange effect. However, the quarter-end exchange rate also increased, which created a negative currency change effect on credit provisions, offsetting a significant portion of the positive effect.

In this manner, HMC has endured an increasingly challenging business environment, including unfavorable operating conditions across the entire automotive industry and temporary component supply disruptions. Based on our diversified powertrain and regional portfolios, we have demonstrated rapid and flexible responsiveness to changes in internal and external business environments to minimize negative impacts.

As a result, alongside revenue growth, our profitability has continued to improve following the turnaround that began in the first quarter, and we have recorded relatively favorable performance in the second quarter. We aim to continue improving our performance in the second half and demonstrate our market competitiveness.

The component supply issues mentioned earlier have normalized at this point, and we plan to recover the production losses from the first half through expanded production in the second half. Additionally, in the second half, we have scheduled the launch of the Hyundai Grandeur facelift hybrid sales and the Avante full model change as well as new Genesis models.

Through these new model launches and sales, we expect profitability recovery to accelerate in the second half of the year. To this end, we are maintaining our annual operating profit margin guidance of 6.3% to 7.3% without downward revision from our initial guidance at the beginning of the year.

Next, I will explain the second-quarter dividend. Based on the value-up program announced in August 2024, we plan to implement a quarterly dividend of ₩2,500 per share for both common and preferred shares in the second quarter.

The record date for the second-quarter dividend is August 31st, and the payment date is September 30th. Geopolitical issues, intensifying competition, and tariff policies continue to create a challenging business environment, and global automotive companies are facing unprecedented difficulties.

Nevertheless, our company will pursue recovery of first-half production losses through expanded production alongside the full-scale launch of new models in the second half, and through company-wide efforts including active implementation of contingency plans, we will achieve the annual guidance presented at the beginning of the year and strive to demonstrate our fundamentals in the global market. Thank you for your attention.

Next, Vice President Hyung-Seok Lee, the Head of Planning and Finance Division of Hyundai Capital, will assess the Q2 results for the finance business.

Good afternoon. I am Hyung-Seok Lee, Head of Finance at Hyundai Capital.

I'll present finance business' second quarter 2026 results and outlook for the second half. Despite continued external uncertainties in the second quarter, including prolonged geopolitical risk stemming from the Iran conflict and increased exchange rate volatility in both domestic and global markets, Hyundai Capital and Hyundai Capital America maintained stable performance.

This was supported by close collaboration with the group and a strong captive asset portfolio. Let me now walk you through the results of each company, starting with Hyundai Capital.

Leveraging strong credit profile and funding competitiveness, we continued to support the group's vehicle sales through financing programs. As a result, the share of the automotive finance maintained 81% of total earning assets in the second quarter.

Despite intensified market competition, earning assets grew 3.8% YoY, driven by the expansion of dedicated EV financial products and joint sales promotions with the OEMs. Despite external uncertainties, interest income increased on the back of the solid asset growth.

However, lower gains from the sale of nonperforming loans resulted in operating revenue remaining largely flat YoY. On the expense side, interest costs increased due to higher borrowings supporting asset growth.

Nevertheless, we minimized funding cost pressures by diversifying our funding mix through new funding instruments and foreign currency borrowings despite the higher interest rate environment. Also, while delinquency rates have been rising across the financial industry, our delinquency ratio improved by 11 basis points YoY to 0.78% as of the end of June.

Although lower credit costs reflected improved asset quality, total operating expenses increased 3% YoY, mainly due to higher SG&A expenses, including payroll costs, and additional provisions related to leased assets. As a result, operating profit declined 23% YoY.

However, driven by improved performance at overseas affiliates such as the UK, France, and Germany, equity earnings increased 26% YoY. Consequently, our net income increased 2.3% YoY.

Looking ahead to the second half, along with prolonged geopolitical uncertainties, increased volatility in funding markets following the Bank of Korea's recent base rate hike on July 16th will create challenges for us. To navigate this environment, we'll further strengthen funding stability through optimized financing strategies tailored to market conditions, including favorable foreign currency borrowings and funding opportunities linked to investment demand from tech companies.

At the same time, we'll continue to focus on high-quality assets and rigorous credit risk management to minimize risk. We also plan to successfully complete the launch of our India finance subsidiary, which is currently in the final stages of preparation, and further expand our operations in Australia and Indonesia.

We'll continue to strengthen our role as the group's global mobility finance partner and reinforce our captive finance franchise. Next is Hyundai Capital America, or HCA.

Supported by strong vehicle sales from the group, driven by robust demand for hybrid vehicles in the US market, HCA maintained a high penetration rate, resulting in 11% YoY growth in total earning sales. Operating revenue increased 21% YoY, driven by continued asset growth and higher finance and lease income.

Operating expenses increased 22% YoY, reflecting higher lease depreciation expenses as well as increased interest expense associated with larger funding requirements to support asset growth. While delinquency rates were higher than a year ago due to ongoing macroeconomic uncertainty, quarterly delinquency trends continued to improve following the first quarter.

Also, we continue to maintain a high-quality portfolio with prime customers representing 88% of total assets. Based on this, HCA's operating profit increased 9.7% YoY, while net income increased 9.76%, delivering solid financial performance.

In the second half, market volatility in the US will increase, driven by persistent inflationary pressures and geopolitical conflicts. Nevertheless, leveraging its strong credit ratings and funding competitiveness, the company has secured ample liquidity and is well prepared for potential market disruptions.

In the second half, we'll continue to work closely with the group to support vehicle sales financing, respond flexibly to changing market conditions. This concludes the presentation on the financial business.

Thank you for your attention. With that, we will conclude the presentation and take your questions.

지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와

Now, Q&A session will begin. Please press star 1, that is star and 1, if you have any questions.

Questions will be taken according to the order you have pressed the number star 1. For cancellation, please press star 2, that is star and 2 on your phone.

다음으로 질문해 주실 분은 다올투자증권의 유지웅 님입니다. The first question will be provided by Jiwoong Yoo from DAOL Investment & Securities.

Please go ahead with your question. 네.

안녕하세요. 저 다올투자증권의 유지웅입니다.

질문 기회 주셔서 감사드립니다. 오늘 이제 실적 설명 잘 들었고요.

두 가지 질문 드려보겠습니다. 일단은 이제 영업이익률 가이던스 유지 말씀 주셨는데요.

혹시 연간 판매 가이던스도 이제 유지가 되는 건지 궁금합니다.

2분기에 저희가 생산 차질이 꽤 있었는데, 주로 제네시스 차종들의 영향이 있었고, 그리고 판매가 빠진 지역을 보면은 이제 유럽도 이 2분기에는 이제 숫자가 좀 많이 내려간 거 같습니다. 그래서 저희가 3분기나 4분기에 단순히 이제 생산 2분기 부진 만회를 위해서 생산을 늘린다고 해서 제네시스 판매량이나 아니면 유럽에서의 판매량을 바로 이렇게 올릴 수 있는 것인 있는 상황인지, 회사에서는 이제 지역별로 봤을 때 저희가 이제 3분기 4분기 생산을 당연히 늘리시겠지만 지역별로 요렇게 이제 문제없이 소화가 될 수 있는 상황인지 어떻게 보고 계신지 궁금하고요.

두 번째로 유럽 질문 드리겠습니다. 유럽은 보면은 산업 수요는 이제 증가를 해서 이제는 미국보다 더 큰 시장이 이제 돼 버린 거 같습니다.

그래서 반면에 저희 같은 경우에는 1분기에도 이제 역성장이 있었는데 2분기에도 유지가 된 거 같아 좀 아쉬운 거 같고요. 아이오닉 3랑 이제 투싼 투입 말씀을 하셨습니다.

그리고 하반기에 이제 투입이 된다고 말씀을 주셨는데 이러한 상황들을 이제 바꿀 수 있는 게임 체인저가 될 수 있는지는 아직 좀 조심스러운 상황인 거 같은데요. 그중에서 투싼이 더 볼륨 모델이니까 당연히 이제 중요할 거 같고 혹시 현행 NX4 대비해서 투입 물량이 이제 증가하거나 생산 캐파가 증가가 되는 걸로 이제 예상을 하고 계신지 궁금하고요.

그리고 현재 믹스 악화가 거의 유럽에서만 지금 발생을 하고 있는 거 같습니다. 뭐 물론 이제 타 지역에서도 아쉬운 부분이 있겠지만 유럽이 일단은 이제 1분기에 이어서 계속 좀 어려운 상황인 거 같은데 하반기에는 이런 분위기가 이런 차종들이 이제 신규로 투입이 되면서 분위기가 바뀔 수 있는 상황으로 보고 계신지 궁금합니다.

이상 두 개 질문드렸습니다. 감사합니다.

This is Jiwoong Yoo from DAOL Securities. I'd like to thank you for giving me this chance to ask questions.

I'd like to appreciate your previous explanation regarding financial results of the second quarter. I do have two questions.

If I play my first question first, you've mentioned that you are going to maintain the guidance for the OPM for the year 2026. I'm wondering you are also maintaining the annual guidance for the annual sales figure as well.

If you look at the results of the second quarter, there were some production disruption that were happening around Genesis model as well, and if you look at the results by region, the second quarter's result in the European region was quite sluggish. Of course, I think that you're going to make more efforts to make up for this in the third quarter and fourth quarter, and I'm wondering if these efforts are going to raise the sales figures in these areas and the Genesis as well, and if you think it will be stable and safe to say that you can deal with the situation in the third quarter and fourth quarter.

My second question is related to European region. I believe that the industry demand in the European region is rising, the size of the European market is higher and larger than that of the US.

Then if you look at our situation and result in the first quarter and second quarter, there was a negative growth in the first quarter and the result was quite sluggish in the second quarter, so that's something I feel quite regrettable. If I may say this, I think that if you launch new models like IONIQ 3 and Tucson and you mentioned that you are going to make profit in the second half, I'm wondering if you think this is still valid statement or not.

I think the Tucson will be more important because this is a volume model, if you think the production capacity will increase compared to NX4. I'm thinking that mix deterioration is mainly happening in Europe, and of course, this can be applied to other regions as well, but I think still the European region is still suffering, do you think there will be a different view toward the second half for this region with new launches that you've explained?

예, 그 첫 번째 질문에 대해서 말씀 생산 차질 물량이 굉장히 많이 있었고 그 부분에 대해서 재고를 리퀴데이션 하면서 차질 물량을 도매 물량 차질을 파악하기 위해서 최선을 다했습니다. 근데 상반기에

2분기하고 상반기에 생산 차질 물량을 전부 다 도매로 만회하기에는 조금 물량 차질이 커서 어려움이 있었는데 하반기에는 전체 차질 난 물량을 국내 공장뿐만 아니라 인도 그다음에 타 공장에서 해외 번역 공장에서 만회하는 계획을 수립을 하고 진행을 하고 있습니다. 그래서 지금 연간 가이던스를 지금 상황에서는 달성을 하기 위해서 노력은 지금 하려고 하고 있는데 지금 전망치나 뭐 여러 가지를 봤을 때는 그거에 조금 못 미칠 수도 있을 것으로 예상을 하고 있습니다.

하지만 저희가 작년에도 그랬고 24년도에도 그렇고 25년도에도 그랬지만 판매 대수는 저희가 연간 가이던스를 달성하지 못해도 영업이익률 가이던스는 달성을 해 왔고 매출액은 지속적으로 고부가가치 차종 하이브리드 믹스 증가 등으로 인해서 매출액은 초과 달성을 해 왔습니다. 그런 관점에서 봐주셨으면 좋겠습니다.

Let me answer your first question first. You asked about if you are going to maintain our sales guidance for the annual basis while we maintain our OPM guidance.

We think that the production disruption caused by several issues was quite significant in the first half, and we made our efforts to deal with this situation by liquidating the inventory that we have. We are still making efforts, but our efforts that we've done so far during the first half of this year was not actually enough to cover up.

We are currently implementing our countermeasures by utilizing our domestic production line as well as our overseas production lines in India as well, we are going to make more efforts to meet our annual guidance. If you look at our external forecast and others, still they are instead we need to make up for it.

If you look at our history last year and 2024 as well, sometimes we couldn't meet the guidance for the sales figure, but we were sure to maintain and achieve the OPM guidance, and also it is true that we overachieve our top-line revenue guidance by producing more high value-added and hybrid vehicles. 예.

좀 더 첨언을 드리자면 지금 시점에서 연간 판매 목표 가이던스를 바꾸겠다는 의미는 아니고요. 그거를 위해서 최선을 다할 거고 그거를 위해서 계획은 수립되어 있습니다.

근데 이제 점진적으로 상황 저희가 더 계속 시장 상황 모니터링할 거고요. 그거에 따라서 저희가 이제

8월 말에 CID가 계획되어 있습니다. 그때 되면 좀 더 정확한 숫자를 가지고 시장하고 소통할 수 있을 것으로 생각합니다.

If I add a little bit more, I'm not saying that we have to change our annual guidance for the sales figure. We're going to do our utmost effort to achieve the sales guidance and others that we communicated with the market, and we're preparing for the initiative and countermeasures for that.

We will continue to monitor the market situation, and since we are going to hold the CID the end of August, we are going to share more details and accurate numbers when we have that event. 예, 두 번째로는 질문에는 유럽 시장에 대해서 이제 우려를 표명을 하셨고 유럽 시장의 어떤 하반기 예측에 대해서 질문을 주셨는데요.

유럽 시장에서는 저희가 이제 기존

IC 볼륨 모델인 코나하고 투싼이 에이징이 됨으로써 상반기에는 상당히 좀 판매하는 데 어려움을 겪었습니다. 또한 중국 전기차의 공세가 상당히 공격적으로 나와 가지고 전체적인 산업 수요가 증가되는 부분에 상당한 영향을 미쳤다고 생각합니다.

전기차에서도 저희가 어떤 그 아이오닉 5 뭐 이런 모델하고 코나 EV 이렇게 제한적인 모델로 시장 대응을 해 왔고 그다음에 저희가 이제는 그 중국차에 대응하는 B세그 EV 모델이 부재를 했었는데 말씀 주신 것처럼 저희가 아이오닉 3 모델을 런칭을 준비하고 있습니다. 그 런칭은 저희가 가격 경쟁력을 최우선으로 생각을 해서 물론 원가 절감을 최대한 해서 수익성하고 밸런스를 맞추겠지만 시장에서 판매될 수 있도록 판매되는 데 경쟁력을 갖고 출시될 수 있도록 그렇게 지금 진행을 하고 있습니다.

Your second question was around your concerns about our performance in the European market. Also you asked about the forecast for the second half of this year.

We are operating ICE volume models like Kona and Tucson, and they are aging, because of that, we had a difficult time in the first half. Also, we are facing very aggressive entry by the Chinese players with their EV lineups, and that has contributed to enhancing the overall industry demand in Europe.

On the other hand, we had to operate a limited number of lineups like IONIQ 5 and Kona in Europe, whereas we didn't have a proper model for the B-segment, which can be against the Chinese players. Like you have mentioned, we are making preparation for new model launches, including IONIQ 3 and Kona, and also, we are going to make sure that those models will be equipped with competitive price so that we can be producing and introducing competitive models for the consumers.

Also, that will be achieved by taking the balance between profitability and cost. 그다음에 이제 신차 출시 관련해 가지고는 저희가 이제 하반기에 유럽에서도 아이오닉

3 말씀드렸던 신차 출시가 있고 그다음에 B-SUV에 대한 신차 출시가 하반기에 예정은 돼 있습니다. 근데 연말에 몰려 있기 때문에 그 물량은 극히 제한적일 것으로 생각하고요.

아이오닉 3 같은 경우는 약 2만 대 이상의 하반기 판매 계획을 갖고 있고 투싼 같은 경우에는 저희가 이것도 4분기에 출시가 예정돼 있습니다. 그래서 실질적으로 하반기에 물량을 회복하는 데는 조금 제한적일 것으로 생각은 하고 있습니다.

그래서 유럽의 어떤 지금 시장 상황을 봤을 때 우리가 목표했던 거 대비해서 유럽에서 100% 달성하기는 상당히 어려운 상황인 건 맞습니다. 하지만 내년도 하반기에 신차 출시된 거 하반기에 4분기에 출시된 거 이런 것들을 기점으로 해서 내년도에는 풀이어로 저희가 팔 수 있기 때문에 내년도에는 성장이 예상되고 있습니다.

With respect to new model launches, what we are preparing for in the second half of this year will include IONIQ 3 and B-segment SUV. Then the timeline is concentrated in the latter half of this year toward the year end, it will have limited impact to increasing our yearly-based sales figure.

For IONIQ 3, we are expecting around 20,000 units in the latter of this year. This is our sales target.

The Tucson will be launched in the fourth quarter of this year, there will be the limited impact to increasing our overall annual sales figure, and that revenue generation will be created in earnest from next year. It is true that it will be difficult to achieve 100% of what we are committed to, but with the new model launches scheduled for the fourth quarter, starting from the next year, we'll be able to sell those vehicles on a full-year basis, and we can expect a growth in the European market.

또한 유럽에서도 하이브리드 판매 믹스가 지금 증가가 되고 있거든요. 그 하이브리드 판매가 믹스가 올라가면서 수익성 측면에서는 도움이 되고 있는 것도 사실입니다.

Also the proportion of HEV is increasing in Europe as well, and it is having a positive contributing impact to our profitability level. 네, 그럼 다음 질문 받겠습니다.

다음으로 질문해 주실 분은 키움증권의 신윤철 님입니다. The following question will be presented by Yoonchul Shin from Kiwoom Securities.

Please go ahead with your question. 네, 안녕하세요.

키움증권 신윤철입니다. 질문 기회 주셔서 감사드립니다.

두 가지 질문드리겠습니다. 일단 그 언론 보도상으로는 소프트뱅크의 보스턴 다이내믹스 풋옵션 행사 관련해서 많이 좀 언론 보도가 다뤄지고 있었던 반면에 이제 소프트뱅크랑 현대차그룹 쪽에서는 공식적인 공시나 보도자료 배포가 현대 확인한 바로는 확인되고 있지 않습니다.

그래서 이제 소프트뱅크 잔여 지분 관련해서 현대차그룹 공식 입장이 어떻게 되시는지 좀 궁금하고요. 그렇게 결정하신 배경도 함께 설명 부탁드리겠습니다.

네, 그리고 두 번째는 방금 이제 아이오닉

3 유럽 하반기 출시 강조해 주셨는데요. 기아가 1분기 실적 발표에서 말씀해 주신 바로는 이제 EV 신차 출시 초기에 ICE나 하이브리드 대비 높은 충당부채 설정하고 있다고 말씀 주셨습니다.

그래서 현대차도 같은 정책을 펼치고 계시는지가 궁금하고, 워낙 이제 2만 대 방금 말씀해 주실 정도의 볼륨 모델이다 보니까 이게 좀 손익에 오히려 좀 초기에는 부담이 될 수도 있지 않을까 싶어서 여쭤봅니다. 감사합니다.

Hello, I'm Yoonchul Shin from Kiwoom Securities. Thank you for the opportunity.

I have two questions. First is regarding the Boston Dynamics put option.

According to the media outlets, they say that Hyundai Motor is making the final preparations for the BD put option exercise. However, there was no official statement from the Hyundai Motor Company.

I would like to know what the official statement, official announcement regarding the SB remaining option, and I'd also like to hear about the background of the decision-making. My second question is regarding the IONIQ 3 and Europe.

You mentioned that the IONIQ 3 will be launched in Europe in the second half of this year, and according to the first-quarter earnings call of Kia, the new car will be launched, and when the new car is launched, then there is a policy regarding the provisions in the initial stage regarding ICE vehicles. I wonder whether you will apply the same policy to IONIQ 3 that will be launched in Europe because it's a 20,000-unit volume model, I would like to know the initial policies regarding the IONIQ 3 launch in Europe.

예, 안녕하세요. 저 구자영입니다.

지금 여쭤보신 그 소프트뱅크 풋옵션에 대해서는 행사 그 소프트뱅크가 사실

2026년 7월 초에 풋옵션 행사한 것은 맞습니다. 근데 지금 현재로서는 각 주주사가 신중하게 의사 결정을 하고 있기 때문에 그 이후로 추가로는 더 지금 현재로서는 말씀드릴 수 있는 게 없습니다.

Hello, I'm Zayong Koo from IR office. According to answer your questions about the SoftBank put option exercise, yes, the SoftBank did exercise a put option in the early July of this year.

However, because each shareholding company is making decisions in a very discreet manner and in a very careful manner, I cannot give you more details at the current stage, please understand that. 예, 두 번째 질문에 대해서 답변은 이승조 부사장인데요.

설명을 드리겠습니다.

EV 신차, 그러니까 아이오닉 3가 나오면서 충당부채 설정이 좀 많이 될 수밖에 없는 상황으로 알고 계신데 그 부분이 수익성에 부담이 되는지 뭐 이 부분을 질문해 주셨는데요. 충당부채 설정이 ICE보다 금액적으로 많은 건 맞습니다.

왜냐면 그 PE 부품이라고 아시겠지만 전동화 부품에 대한 단가가 높고 배터리 단가가 높기 때문에 이런 부분에 대한 판매 보증 충당부채를 똑같은 비율로 설정을 한다 그래도 정액으로 볼 때는 많이 쌓을 수밖에 없거든요. 그래서 EV의 수익성이 현재는 ICE보다 낮을 수밖에 없는 상황인 겁니다.

Yes, I'm Seung Jo Lee. Let me answer your second question.

You asked that the provision about the provisions that will be applied to the new IONIQ 3 EV and whether that will have a burden on the future profitability. Yes, it is true that the provision amount of EV 3 will be higher than the ICE model in amount, and this is because the PE parts such as electrification parts and battery parts, their unit cost is higher than the ICE models.

Even with the similar level of sales warranty and provision, the amount is bound to be higher than that of EV. That is why the profitability of EV is lower than the profitability of ICE models.

추가적으로 좀 더 설명을 드리자면 저희가 이제

PE 부품에 대한 그 품질 비용을 절감하기 위해서 여러 가지 다각적인 노력을 하고 있습니다. 뭐 잘 아시겠지만 배터리를 재제조해서 다시 활용한다든지 배터리에 대해서 파셜 수리를 한다든지 그다음에 저희가 이제는 그 플레이오프 시스템이나 이런 시스템으로 이제 전개가 되면서 일단 시스템 업그레이드나 뭐 이런 부분은 OTA를 통해서 저희가 업그레이드를 하면서 그 공임이나 이런 부분을 줄여 나가는 활동을 하고 있습니다.

Additionally, we are making a multifaceted effort to reduce quality costs in terms of PE components. We are, as we are reworking battery, we are doing the partial repair of battery, and also we are doing developing cloud system and reducing the labor cost in upgrading the system OTA.

That, we are making a various efforts to reduce quality costs. 시간 관계상 마지막 질문 받도록 하겠습니다.

마지막으로 질문해 주실 분은 한화투자증권의 김성래 님입니다. The last question will be presented by Sungrae Kim from Hanwha Investment & Securities.

Please go ahead with your question. 네.

안녕하세요. 한화투자증권의 김성래입니다.

네, 질문 기회 주셔서 감사드리고요. 세 가지 질문드리고 싶은데 두 가지는 좀 금액적인 부분 좀 여쭤보고 싶고요.

마지막은 주주 환원 관련해서 좀 여쭤보겠습니다. 첫 번째 질문은 이제 그

OP 브릿지나 주요 증감 사유 분석에 있는 그 부정적 믹스 효과 아까 이제 금액적인 부분도 다 설명해 주시긴 했는데요. 여기서 인센티브하고 그리고 차종 믹스 두 가지를 좀 구분했을 때 각각의 금액적인 영향이 어떻게 되는지 좀 궁금하고요.

두 번째는 뭐 관세에 대한 부분들은 이제 영향이 어느 정도 이제 기저가 잡혔기 때문에 크게 이슈가 되진 않으- 않지만 그래도 좀 추정에 좀 도움받기 위해서 이번 분기 관세 영향 어떻게 나왔는지 좀 궁금하고요. 세 번째는 이제 3년간 4조 원 이제 자사주 매입 관련해 가지고 그 방향성 말씀해 주실 때 그 지금 우선주하고 보통주하고의 그런 괴리를 좀 줄이는 차원에서 이제 그 우선주주들 어느 정도 이제 보완해 줄 수 있는 형태로 하겠다라고 말씀해 주셨는데 일단은 지금 저희가 뭐 상반기 누적으로 했을 때 그 지배주주 순이익이 지금 6.1조 원 정도가 되고 있고 이제 연간으로는 뭐 가이던스 타면 더 올라갈 수는 있겠지만 어찌 됐건 간에 지금 최소 배당을 고려를 하게 되면은 주주 환원에 대한 일단 그 자사주 매입에 대한 그 규모 자체가 좀 타이트한 부분들은 맞잖아요.

그래서 이거를 3년간 4조 원 매입할 수 있는 방향성이 계속 유지될 수 있는지 좀 궁금하고요. 두 번째는 그리고 아까 얘기했던 것처럼 이제 우선주에 대한 주주들 차원에서의 어떤 그런 방향성들이 지금 사실은 1분기 때 이제 발표해 주셨던 내용들에서 이제 그 자사주를 매입한 것들은 사실은 그런 우선주주들을 좀 우대하는 형태는 아니었던 걸로 좀 보여지거든요.

그래서 이런 방향성들이 향후에 어떻게 좀 업데이트될 수 있는지 좀 예, 알고 싶습니다. 감사합니다.

Thank you for the opportunity to ask question. This is Kim Sungrae from Hanwha Securities.

I have three questions. My first two questions are related to cost.

My first question is entering around the deteriorating mix impact, and you've gave us the explanation by providing the breakdown between incentive and mix, I'd like to hear more from you if you can explain if we can understand more details about this. Also, of course, the tariff issue has been already set, and there can be ongoing issues with respect to tariffs still, if you can remind me once again or give me an update regarding the tariff impact in the second quarter, that will be also appreciated.

My third question is related to share buyback. If I look at your company's direction for shareholder return policy, you intend to close the gap between preferred stock and common stock.

If we look at the cumulative number of share buyback so far in the first half of this year, it can be understood that the controlling shareholders' net income will be around ₩6.1 trillion. Of course, on the annual basis, it can go up a little bit more, but it is safe to say that your purchasing amount so far is quite tight considering how much of treasury shares you've bought so far for the purpose of shareholder policy.

I'm wondering if you are going to maintain the previous direction to set the target of around ₩4 trillion for this purpose. Also with respect to the direction that you need to give more priority for the prior preferred stocks for their shareholders, I'm wondering if this direction is still valid or not.

예, 첫 번째 질문에 대해서 말씀드리겠습니다. 금액적으로 브레이크다운을 요청하셨는데요.

저희가 이제 믹스가

0.6조 정도가 악화된다고 했는데 거기에는 그 파워트레인 믹스가 악화된 부분 제네시스라든지 팰리세이드 이런 부분이 생산 차질로 인해서 그 믹스가 악화된 부분이 약 0.2조 정도 됩니다. 0.2조.

그다음에 가격 인상하고 인센티브 증가하고 네팅을 치면은 순 인센티브 증가가 약 0.4조 정도 됩니다.

Let me answer your first question. You asked about the breakdown of the financial figures that we've explained.

The mix deterioration can amount to ₩0.6 trillion, and out of ₩0.6 trillion, ₩0.2 trillion stemmed from the powertrain deterioration, including production disruption, including Palisade and Genesis. If you understand the absolute impact of or absolute number of the net incentive including the price hikes, it can be translated into ₩0.4 trillion.

예, 첨언해서 말씀드리면 이 믹스 효과가 있고 이제 여러 가지 효과 있는데 저희가 하이브리드 판매 믹스를 지속적으로 증가시켜 왔다고 말씀드렸는데 지금 하이브리드 판매가 증가되면서 전년 동기 대비해서 본다 그러면 하이브리드 믹스로 개선된 게 그 부분도 상당 부분 있습니다. 금액적으로 보면 한

0.4조 정도 됩니다. 그래서 전체적으로 뭐 여러 가지 요인에 의해서 믹스가 파워트레인 믹스가 좀 악화는 됐지만 하이브리드만 본다 그러면 그 부분에서는 한 0.4조 정도의 개선 요인이 있었고 이거는 지속적으로 하이브리드 믹스로 올려갈 거기 때문에 파워트레인 믹스 개선은 하반기에는 생산 차질이 만회되면서 상당히 긍정적인 효과로 플러스 효과로 나올 것으로 예상을 하고 있습니다.

If I add a little bit more, there can be other factors with respect to the deterioration of mix. I can say that the proportion of the HEV is increasing, and also our sales figure for the HEV actually went up on a YoY basis, and also that made a positive contribution to the mix as well, and the amount can be translated into ₩0.4 trillion.

Overall, there can be multiple factors, but there were some negative factors because of the powertrain deterioration. I can say once again the contributing factor from the HEV can be translated into ₩0.4 trillion, which is very positive for our side.

Since we expect that the proportion of HEV is going to go up, this will have a positive impact in the latter half this year since we are going to not have any impact from the production disruption that we had in the past. 두 번째 질문에 대해서 말씀드리겠습니다.

관세 효과에 대해서 물어보셨는데요.

1분기에 저희가 관세로 납부한 게 0.9조 정도 됐었습니다. 2분기에도 비슷한 수준 0.9조 정도의 관세 납부액이 발생을 했고요.

참고로 말씀드리면 작년 3분기에는 약 1.8조, 4분기에는 1.5조 정도 납부를 했기 때문에 3분기 4분기 하반기로 가면은 관세 효과는 그 임팩트는 작년 대비해서는 적어질 것으로 저희가 예상을 하고 있습니다.

Your second question was about tariffs. The tariff payout amount in the first quarter was ₩0.9 trillion, and the payout for the second quarter was flattish on a QoQ basis at the amount of ₩0.9 trillion.

For your reference, the payout for the third quarter was ₩1.8 trillion, and for the fourth quarter, it was ₩1.4 trillion. If we compare the numbers on a YoY basis in the latter half of this year, the tariff impact will decline.

세 번째 질문 말씀 세 번째 질문에선 주주 환원 정책에 대해서 말씀을 주셨습니다. 전체적인 그 자사주 매각, 매입 계획에 대해서 물어보셨고 두 번째로는 이제 우선주하고 보통주의 괴리율에 대해서 저희가 이제 좁혀 나가겠다고 말씀드렸던 건데

1분기에 저희가 좀 그 자사주 매입을 할 때 사실은 우선주에 조금 더 비중을 두셨습니다. 그게 이제 전체적인 규모가 작다 보니까 거기에 이제 표시가 안 났을 뿐인데 그 당시에도 보통주 대비해서 약 20% 25% 정도의 추가적인 매입을 했었고요.

그게 저희가 뭐 시장에 약속했던 부분에 대한 어떤 뭐 뭐 그 방향성에 대한 어떤 그 조금 뭐라고 할까요? 방향성에 대한 거에 대한 답이라고 생각하시면 될 거 같고요.

전체적인 그 주주 환원 정책에 대해서는 지금 항상 저희가 상시적으로 검토를 하고 있지만 특정 사안에 대해서는 공시 이슈나 어떤 그 법적인 문제 등을 고려했을 때 지금 이 자리에서 발표하기에는 말씀드리기에는 제약이 있다는 점 양해를 부탁드리고요. 저희가 말씀드린 것처럼 8월 하 8월 말에 인베스터 데이가 있습니다.

그때는 저희가 구체적인 주주 환원 정책에 대해서 시장과 좀 더 정교한 숫자와 방향성을 가지고 소통할 수 있도록 하겠습니다.

Let me answer your third question. I believe that there were two parts of your question.

First part of your question was related to our plan to share repurchase, and second part of your question was related to close the gap between preferred stock and common stock. When we repurchased the treasury stock in the first quarter, we gave a high proportion to the purchase amount of preferred stock, but the amount was not really big.

That's reason why it was not really well represented. When we calculated the number, we set the proportion of the preferred stock to be 25% higher than the portion for the common stock.

Maybe this can answer your question with respect to the direction of the shareholder return policy that we've communicated to the market. Regarding the overall shareholder policy, we it is quite very difficult for us to disclose specific matters since it will be related to disclosure issues and legal concerns, please understand this.

When we have the CID this August, we are going to make sure we can give you more accurate numbers and more details with respect to the shareholder return policy. 마지막으로 말씀드리고 싶은 사항이 있는데 저희가 이제

1분기에 5.5% 영업이익률이고 2분기에 5.8%, 1분기에 작년 4분기 대비해서 턴어라운드하고 2분기에 계속 성장 추세를 이어갔습니다. 지금 저희가 연간 가이던스를 달성하겠다고 말씀드린 거는 아시겠지만 그거를 달성하기 위해서는 3분기 4분기가 계속해서 성장을 한다는 의미를 담고 있고요.

작년 3분기가 저희가 5% 중반대의 영업이익률을 했습니다. 그래서 3분기 때는 작년 전년 동기 대비해서 성장이 충분히 가능하다고 생각하고요.

4분기도 역시 마찬가지입니다. 그리고 뭐 타 OEM, 자동차 산업 전체적으로 전반적으로 지금 경영 환경이 좋지 않아서 다 어려움을 겪고 있습니다.

근데 상대적으로 저희는 굉장히 양호한 실적을 얻었다고 생각을 하고 있습니다. 뭐 지금 2분기 실적이 다 나온 건 아니지만 1분기 실적이나 가이던스 발표나 이런 거를 봤을 때 여러 가지 저희가 타 경쟁사 대비해서 뒤처지지 않는 아주 양호한 성적을 거두고 있다고 말씀드릴 수 있겠고요.

그거에 대해서는 하반기에도 지속적으로 추진해서 저희가 그 업계 자동차 업계에서 상위권에 속하는 영업이익률을 달성할 수 있도록 노력하도록 하겠습니다.

If I elaborate a little bit more about our OPM record, it was 5.5% in the first quarter last year and 5.8% in the second quarter last year, and we made a turnaround in the first quarter of this year, and we are going to have a solid OPM in the second quarter showing a growing trend. To meet the annual guidance, of course, we need to make more efforts in the third quarter and fourth quarter, and there should be continuous growth in these quarters.

If we compare what we are expecting for this year on a YoY basis, we can fully say that there will be growth, and this is applied to the fourth quarter as well. Please understand that all the OEMs are going through very tough time and challenging market environment, but on the other hand, relatively speaking, we were able to post quite solid performance.

Of course, the first-quarter result and guidance, I talked about these numbers, and of course, the second quarter's, the financial results are not fixed in stone, but I'd like to mention once again our performance that we recorded was quite solid, and it's not lagging behind other competitors. We will continue to implement the measures that we've taken so far in the second half as well, and we're going to make sure that we can achieve a top-tier OPM in this auto industry.

이것으로

2026년 2분기 현대자동차 실적 발표 컨퍼런스 콜을 모두 마치겠습니다. 경청해 주셔서 감사합니다.

This is the end of the second quarter 2026 earnings conference call of HMC. Thank you for your listening.