Hyundai bets big on deep discounts to survive EV plateau

Hyundai Motor Co. is going all out to revive drivers’ interest in electric vehicles with significant price cuts in the US, the world’s second-largest EV market, amid dwindling EV demand.

According to the automotive industry on Tuesday, Hyundai Motor has rolled out the 2024 model of its mid-sedan EV IONIQ 6 in the US, with price tags much cheaper than those of their predecessors.

The IONIQ 6 SE Standard is priced at $38,615, down $4,100 from the previous model. The IONIQ 6 SE RWD is sold at $43,565, while the AWD price is set at $45,950. These are each $3,050 cheaper than their old versions.

The prices of its highest trims SEL and Limited have also each been reduced by $2,450.  

Such deep price cuts come amid the ongoing EV price war triggered by EV giant Tesla Inc. to revive the fizzling EV boom.

EV PRICE WAR

EVs have been piling up on dealer lots in the US this year after the recent EV enthusiasm led by wealthy early adopters has come to an end.

Budget-minded car shoppers are shunning expensive EVs in a high-interest rate environment despite the US government's handsome subsidies for EV purchases under the Inflation Reduction Act (IRA).

To fight back against the plateauing EV demand, Tesla has aggressively lowered its popular EV models’ price since early this year, leading others to follow.

Some global carmakers have even pulled back on their ambitious EV production goals amid growing concerns about EV market growth.

According to US-based automotive research firm Kelly Blue Book, the average new EV price dropped to $47,899 in September from over $50,000 early this year.

Considering that Hyundai Motor’s EV models are not subject to the IRA’s EV subsidies, its big price reduction campaign is expected to help the Korean auto giant woo American drivers to buy its EVs.

It has also lowered the monthly lease price of the IONIQ 5 and 6 by $50 for each model, leading its EV leasing prices to their lowest level yet. The leasing price of the IONIQ 6 SE Standard is now set at $299 per month, down from $349.

Hyundai Motor has been aggressive in marketing its EVs with car leasing and rent companies because IRA tax credits are available to EV fleets.

NO EV OUTPUT CUT

Its efforts seem to have paid off somewhat.

In the third quarter, Hyundai Motor sold 21,638 EVs, including luxury marque Genesis EV models, in the US. They made up 9.8% of its entire car sales in the market, more than doubled from a year ago when its EV share was a mere 3.4%.

Hyundai Motor said last week that it had no plans to cut EV output despite the overall EV market slowdown after surprising the market with its highest-ever quarterly operating profit for the July-September period.

The stellar result was largely owed to robust sales of pricey cars, sport utility vehicles and eco-friendly cars, including hybrids and electric vehicles.

Its global green car sales in the quarter rose by a third from a year ago to 168,953 units, while the US market also played a key role in boosting its overall third-quarter global car shipments, the company explained.

Write to Sungsu Bae at baebae@hankyung.com


Sookyung Seo edited this article.