Call it the “cold feet” era of the electric vehicle race.
Since the latter part of the last decade, nearly every major car company made a big show of their aggressive plans to expand their electric lineups, with some even committing to going all-EV. But for a lot of reasons, that path is proving considerably more difficult and protracted than they expected.
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Hyundai, Kia pull ahead
The electric race is proving to be a kind of chicken race, but Korea's automakers say they aren't blinking—and have big plans reset what they do through battery-powered cars.
Dealer networks have been reticent to get on board. High interest rates have turned buyers off to EVs’ often more expensive prices, as have continued concerns about charging. Some new models have gotten lukewarm receptions from longtime fans. Pivoting their century-old industry to one focused on batteries and software has been exceptionally tough, and investors have balked at the enormous capital costs involved.
And with the world’s top EV seller seemingly focused on AI and robotaxis instead—not to mention a looming U.S. presidential election where one candidate seems dead-set against the technology—many automakers may be seeing this moment as one where they can ease off the accelerator a bit.
But easing off isn’t in the cards at Hyundai, the Korean automaker’s American CEO told InsideEVs recently. And the proof has been reflected in sales numbers that fuel plans for future growth.
“We're sticking firm with our plans and our long-term electrification strategy,” Hyundai Motor America CEO Randy Parker said in an interview. “No pun intended, but we're gonna keep our foot on the accelerator. If consumers start to think about purchasing any EV, I want them to consider Hyundai first.”
The success of Hyundai has proven to be a kind of bright spot in an uneven and unpredictable year for EV adoption. And the same has been true lately of its corporate sibling Kia.
Both brands have had good news to share in recent weeks. May brought Hyundai its best month ever for the Ioniq 5 crossover, with sales up 82% over the same period last year. Kia had a similar “best month ever” story for all of its electric vehicle sales, including the critically acclaimed EV9 three-row crossover.
Even the Kia EV6—whose facelifted version has not yet gone on sale—has seen a significant increase in year-to-date sales over 2023. And while it’s about a year away from sales in North America, the compact Kia EV3 has already made a big splash with prospective buyers seeking more affordable electric options.
And all of that is before the Hyundai Motor Group’s big North American production push, which begins in earnest soon. The first Kia EV9 rolled off the assembly line last week at the automaker’s West Point, Georgia plant. The following day, Hyundai announced the Ioniq 5 would be made at the new joint “Metaplant” in the same state as well later this year. (Hyundai and Kia are both owned by the Hyundai Motor Group; while they share hardware, top corporate leadership and some production facilities, they operate as separate entities.)
“With model development in line with consumer needs and strong vehicle supply, Kia continued its sales growth momentum in May,” said Eric Watson, Kia America’s vice president of sales, in a recent news release. “Kia offers a balanced mix of electric, hybrid and ICE models that are meeting customer demands, and we expect to see increased showroom traffic and transactions through dealers.”
Parker said that Hyundai’s EV lineup is already being heavily advertised in a new campaign airing during the NBA playoffs. While other automakers have taken pains in recent months to play up their hybrid lineups—”Which we have,” Parker said—as EV sales have ups and downs, the CEO said right now Hyundai wants to “drive the EV narrative.”
“At the end of the day, if you want to reduce your carbon footprint, it's got to be done through EVs,” Parker said. “I don't think any [automaker] right now is really touting EVs as performance vehicles like we are.” And the hybrids are doing well too, especially the Santa Fe Hybrid crossover; “Hotter than a pistol, can't keep them in stock right now,” he said.
And like Kia, which openly admits that it “relaunched the brand” in 2021 with a new logo and cars like the EV6, Hyundai is also using its electric cars to get people to think differently about a company once known for cheap subcompacts. High electric ranges, compelling designs and Tesla-rivaling battery tech have changed a lot of perceptions about both brands.
“Ultimately, what we're trying to do is improve the brand image, the awareness and the consideration for the brand,” Parker said. “But at the same time, we want to make sure that we give consumers confidence when they purchase an EV from us.”
For that, he said, “the proof is in the pudding.”
“We're adding American manufacturing jobs,” Parker said. “And we're addressing the top EV concerns, the number one of which is the purchase price.”
Georgia (And Tax Credits) On Hyundai’s Mind
Indeed, cars like the Ioniq 5 and Ioniq 6 have been known for their aggressive lease deals. As of this writing, the crossover—which offers up to 303 miles of range—can be leased for $229 a month and $3,500 due at signing for an SEL model. The Ioniq 6 sedan can be had in 361-mile SE form for just $189 a month and $1,999 down, which gets a buyer one of the higher-range EVs on the market right now at any price.
Leasing has been a big hit for Hyundai, Parker said. Around 60% to 70% of both EVs get leased, he added, which is much higher than the brand’s other cars. (He declined to elaborate on leasing rates for other Hyundai models but said they are "much, much lower.") He has told InsideEVs in the past that both models continue to be profitable at those lease prices, although the extent of their margins is unclear.
That situation is also born out of necessity. Because the Ioniq models are currently built in Korea and not North America, they do not qualify for the $7,500 EV tax credits unless they are leased—contrary to what the automaker believed would be the case with the Biden Administration’s new rules. After that decision happened, Hyundai’s EV sales began to lag behind those of Ford, but these leasing deals have helped propel the Korean company back to the front of the race.
As Bloomberg recently reported, Ford, General Motors and Hyundai could each hit 100,000 EVs produced this year, something only Tesla has done to date. (Reaching that sales mark, however, may be a different story; with a total of 20,971 Ioniq vehicles sold by the end of May, it may only be achievable if Kia’s results are counted as well. Neither brand breaks out sales data for electric versions of its gas vehicles, like the Kia Niro EV and Hyundai Kona Electric.)
At the same time, GM is just now ramping up production of more affordable models like the Blazer EV and Equinox EV after a year of technical headaches. And while Ford continues to post strong sales of its F-150 Lightning and Mustang Mach-E, adoption isn't happening as fast as it predicted, and now the Blue Oval brand is pushing back plans for future models and singing a different tune about hybrids. In other words, the race to 100,000 EVs could be Hyundai and Kia's to lose.
And the Metaplant in Georgia could be their ace in the hole. Due to go online in October, the Savannah-area factory has a capacity to build up to 300,000 Hyundai, Genesis and Kia EVs annually, adding more than 8,000 jobs in the coming years.
And that situation around tax credits and leasing is evolving quickly. With the EV9 and soon Ioniq 5 being U.S.-built, both cars should eventually be able to qualify for at least some of the tax credits when purchased.
Parker seemed confident that would be the case for the Ioniq 5, but wants to wait until the ink is dry; “If they were coming off [the production line] now, they would qualify, but I can never predict the future,” he said.
Planning For Ioniq 9 Too
Even if Hyundai’s EV models somehow don’t get the tax credit, Parker said plans continue unabated. Unlike competitors, plans for new models aren’t being pushed back. Hyundai is still on track to release a three-row crossover called either the Ioniq 7 or Ioniq 9 later this year.
And while the company hasn’t said where it’s going to be built, the success of the similar Kia EV9 in the U.S. and this country’s endless appetite for three-row crossovers makes it seem like an obvious contender.
Parker declined to give more details about that crossover, or speak to what could become an inter-family rivalry between Hyundai and Kia for market share in the electric three-row space. But he did say it’s worth waiting for. “We've got high expectations, and we think the car is gonna perform extremely well,” he said.
Contact the author: patrick.george@insideevs.com
