Supernal, Hyundai Motor Group's U.S.-based advanced air mobility (AAM) subsidiary, recently laid off 80% of its workforce. The mass layoffs follow the departures of C-level executives including the CEO and CTO last year. Industry observers say Hyundai Motor Group, which has designated hydrogen and robotics as new growth engines, is stepping back from its future aviation business.
According to foreign media reports on June 3, Supernal cut 296 employees, representing 78% of its approximately 380-person workforce. The company will retain only 70 to 80 essential personnel.
The mass layoffs are linked to last year's executive exodus. President Jaiwon Shin, who oversaw the AAM business, left in August last year. Chief Technology Officer David McBride and Chief Strategy Officer Jaeyong Song subsequently resigned. In January this year, Chief Financial Officer Iksoo Chun departed Supernal to assume a role as Hyundai Motor Group's Asia-Pacific global finance head.
Supernal was established in the U.S. in 2021 as an independent entity with investments from Hyundai Motor (44.44%), Hyundai Mobis (33.33%), and Kia (22.22%) to capture the AAM market. The company aimed to launch commercial air services in the U.S. by 2028 through development of electric vertical takeoff and landing (eVTOL) aircraft. At CES 2024 two years ago, Supernal unveiled a full-scale model of its next-generation aircraft, the S-A2, drawing attention from the mobility industry.
The decision to cut 80% of staff reflects Hyundai Motor Group's move to reduce investment in future aviation. The group has already invested 2.32 trillion won ($1.7 billion) in Supernal. However, Supernal recorded cumulative losses of 1.73 trillion won from 2022 through the third quarter of last year. With eVTOL yet to be commercialized, the company generates no revenue while incurring substantial R&D and personnel costs.
Dim prospects for AAM commercialization also contributed to Hyundai's pullback. Although Supernal successfully completed test flights of the S-A2 in California in March last year, internal assessments reportedly raised concerns about technical readiness and safety. Rigorous FAA certification requirements and infrastructure delays have cast doubt on the 2028 commercialization target. In the U.S., startups Lilium and Volocopter filed for bankruptcy due to business development setbacks and aircraft deployment delays.
Consequently, the future mobility focus emphasized by Chairman Euisun Chung is shifting toward autonomous driving and robotics. The strategic decision reflects a move to downsize the costly aviation business with uncertain profitability while concentrating resources on hydrogen mobility, robotics, and autonomous driving, where results are becoming visible.
Hyundai Motor Group stated the layoffs do not represent a withdrawal from future aviation but rather a long-term foundation-building effort. A Hyundai Motor Group spokesperson said, "Future aviation remains part of the Group's future mobility vision, and Supernal will continue as the core organization for AAM development. We will establish a foundation for long-term success and strengthen capabilities in next-generation mobility technology."