Suppose you happen to be the sort of person who worries about Hyundai's profit margins when you can't sleep at night. In that case, the automaker's American CEO doesn't want you to be too concerned about the bottom line when you see aggressive zero-down, $239-a-month lease deals on the electric Ioniq 6 sedan.
"We don't sell cars that are not profitable," Hyundai Motor America's CEO Randy Parker told InsideEVs in a wide-ranging interview today at the New York Auto Show. "That's a big strategy strategy of ours. We don't sell cars at losses."
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Hyundai's EV push is working
While other automakers have demurred on EV plans somewhat after a few quarters of slowing growth, Korea's Hyundai, Kia and Genesis have not been among them. The company has a huge array of gas-powered cars but plans to roll out several new EV models in the next few years.
It's a fair question to ask, given how many automakers are losing money on EVs, especially ones sold at more mainstream, below-luxury prices. Parker's answer is especially interesting considering the lease price of a base Ioniq 6 SE—at least until the start of April—makes it about the cheapest new vehicle to lease in the U.S. But it works, Parker said, because both the Ioniq 6 and Ioniq 5 models are profitable.
"The market has gotten a lot tougher in 2024," Parker said, alluding to the rate of EV adoption proving to be slower than many automakers initially expected. "Our deals are basically a consequence of just being competitive in the marketplace. We know we've got a great product. But we also know that consumers are looking for affordability, especially when it comes to EVs."
Parker added, "We came up with this lease to ensure we didn't lose our sales momentum."
That does seem to be working well for the Hyundai Motor Group in the U.S. Including its Kia sibling and Genesis luxury division, the conglomerate sold more EVs in the U.S. last year than General Motors or Ford, and that was before the Kia EV9 even hit its sales stride. Additionally, Hyundai's larger three-row SUV, the Hyundai Ioniq 7—or Ioniq 9, depending on who you ask—is also set to debut this year. (Parker declined to comment on the car's anticipated name change.)
"We're keeping everything within our budget," Parker said of Hyundai's lease deals. "I've got a very tough boss and he's not gonna let me get outside of my incentive budget, but for now, it's working for us."
It's also working because Hyundai's EVs—all of which are built in Korea at the moment—do not qualify for any EV tax credit, which remains a kind of sticking point for the company. According to Parker's own boss, the Korean automaker got assurances their cars would qualify from the Biden Administration, only for that to not end up being the case. Instead, Hyundai has benefitted from the $7,500 tax credit being applied to leases, and the company's dealers also offer the same as a cash incentive.
That will change as Hyundai opens its new "Metaplant" in Georgia in the fourth quarter of this year. While Parker demurred when asked what EV (or EVs) that plant will build, he said those cars will qualify for tax incentives when they come off the line. And they can't come soon enough, he said.
"One of the things that's holding me back right now is capacity," Parker said. "It's the only way we can grow." Parker added that a program to sell Hyundai's cars via Amazon, then check out with financing and delivery via a local dealer, will be open to more customers in "late summer."
The New York Auto Show saw Hyundai's EVs win a number of awards, but this year, the cars that made their debut were gas-powered: the updated Hyundai Tucson SUV and Santa Cruz truck. More hybrids are coming to the portfolio as well.
But when asked if Hyundai had any plans for range-extended EVs—cars built from the ground up to be electric vehicles, but that also carry some kind of internal combustion engine to serve as a generator—Parker said those may be in the cards.
"I can't release any details, but most definitely," he said. "We're studying this as we speak."
A number of competitors are eyeing range-extended EVs as future options; a few examples include the new Ram 1500 Ramcharger and the upcoming Mercedes CLA-Class, not to mention the old BMW i3. In theory, this will allow automakers to keep building EV platforms but also offer customers options for fueling to help with range concerns.
But Parker said he's confident about where things are going.
"I want to make that very clear, we're all in when it comes to EVs," he said, adding that Hyundai has the flexibility to make more hybrids if demand skews that way.
"Hybrids, you know, they're fine," he said. "It's a good transition for a lot of people. But if you really want to become carbon neutral, it's got to be done through EVs."
Contact the author: patrick.george@insideevs.com
