Hyundai Motor Co. has unveiled the first compact electric vehicle (EV) concept under its Ioniq sub-brand at IAA Mobility 2025 in Munich. The company says the Ioniq Concept Three represents the next step in the company’s electrification journey, signaling its expansion into the compact EV category and complementing its existing midsize and large EV models.

The Concept Three reflects Hyundai Motor’s ambitions in Europe’s B-segment, a critical market for compact EVs. Its design also underscores the brand’s commitment to delivering a “meaningful, emotionally resonant” experience in an accessible and practical package.

“Returning to IAA Mobility after four years away is a true milestone, and such an occasion deserves a milestone car,” said Xavier Martinet, President and CEO of Hyundai Motor Europe. “Concept Three represents the next step in Hyundai Motor’s electrification journey. With its compact dimensions and Art of Steel design language, it embodies our vision of delivering mobility that is practical, accessible, and emotionally resonant.”

Reminiscent in theme to Hyundai’s previous Veloster model, the new car is meant to address Europe’s surging demand for compact EVs driven by urbanization, sustainability regulations, and the growing need for space-efficient solutions. The concept measures in at 4287 mm (168.8 in) long, 1940 mm (76.4 in) wide, and 1428 mm (56.2 in) tall on a 2722-mm (107.2-in) wheelbase.

The design team behind the car was led by Simon Loasby, Senior Vice President and Head of Hyundai Design Center, and Hyundai Design Center Europe’s Nicola Danza, Head of Exterior Design; Raphael Bretecher, Head of Interior Design; and Emilie Grimm, Advanced CMF Designer.

The concept’s genesis was a challenge from SangYup Lee, Executive Vice President and Head of Hyundai and Genesis Global Design, and Loasby to the European Design team.

“In Europe, you see all these fantastic hatchbacks—so how do we compete?” said Loasby. “We started with side-view silhouettes. One silhouette just jumped off the screen. We called it the ‘Aero Hatch.’”

The design starts low at the front for aerodynamic advantage, then rises into a distinctive roof profile with an acceleration point just behind the rear passengers, giving them maximum headroom. From there, it flows down into a prominent ducktail spoiler.

“And really, who doesn’t love a ducktail spoiler?” said Loasby. “The result is aerodynamic efficiency and a hatchback with its own unique typology.”

The Art of Steel theme began with a conversation Loasby had with Lee. He pointed out that Hyundai might be the only car manufacturer that produces its own steel.

“That sparked the question: how can we celebrate steel?” said Loasby. “And if we do, how can we design something that not only looks like steel but also expresses the best qualities of the material? In a way, the ‘Art of Steel’ is about the artistry of curving, bending, and moving steel to create volume.”

The question was answered with a body having an anodized-effect Tungsten Gray finish. The “sculpted body creates enveloping forms” using three main surfaces, with intersecting lines meant to add visual tension.

“The authenticity of the way we treated the steel fits perfectly,” said Manuel Schoettle, Exterior Designer of Concept Three. “It just felt natural, making the Concept Three extremely pure, and hopefully it will bring a smile to your face.”

Another design element meant to bring a smile to users’ faces is Mr. Pix, a character integrated throughout the car, meant to evoke emotional connection. He gets his name from the brand’s Parametric Pixel lighting, which is featured on both front and rear exterior of the concept, but the pixels are now more expressive, forming a gradient that adds depth and visual rhythm to the design.

Similar to The Boost character created for Hyundai’s Insteroid concept from the 2025 Seoul Mobility Show, the design team was challenged to imagine a character for the new concept. They chose to “celebrate the pixel” with the playful little figure who shows up in the clusters, headup display, screens, instrument panel ends, and even the pixel board up front.

Lemon-tinted glass and wheels and anodized-effect body link the concept’s exterior and interior, with the cabin defined by soft Moonbeam Yellow and grey tones playing across shifting textures intended to create a space that’s both calm and expressive. Embracing soft volumes and user-focused layouts is meant to foster a sense of serenity and clarity and features modular BYOL (Bring Your Own Lifestyle) widgets that allow customers to personalize their ride.

According to Loasby, the interior architecture is all about safety—keeping the driver’s eyes on the road and hands on the wheel. That’s why the designers raised the driver information above the steering wheel, as close to the eyeline as possible, and positioned it slightly further away to make it easier to focus on.

“We’ve also clustered the small screens in the Concept Three around the steering wheel, so they’re right at your fingertips,” said Bretecher. “You don’t want to be searching through a screen for a basic function. That’s why screen reduction is so important.”

The interior envisions the use of sustainable materials such as ocean waste textiles and lightweight aluminum foam to underscore Hyundai Motor’s long-term vision to reduce environmental impact while delivering premium design.

“Because it’s a concept car, we don’t have to put the materials through the same testing as a production model,” said Grimm. “That means we can showcase innovations such as aluminum foam; UV-absorbing, yellow-tinted glass; and seat trims made from recycled ocean waste—a material we currently only use for carpets and floor mats in production cars. And if you look at the floor, you’ll see a special paint finish that uses recycled aluminum powder.”

The aluminum foam visible at the ends of the doors and along the dashboard is Bretecher’s favorite material on the concept: “It has a striking visual quality, but it’s lightweight and contributes to the door’s structure.”

Strategically, Hyundai Motor views Europe as a hub of innovation in the EV era, and the region’s demand for compact, sustainable vehicles positions the region at the center of the company’s global electrification goals. The brand is in the process of transitioning its European production facilities to renewable energy while extending the integration of recycled and sustainable materials into vehicle designs.

Key elements of its electrification roadmap for Europe include offering an electrified version of every model in Europe by 2027 and releasing 21 global EV models by 2030.