Hyundai, Kia sell 2nd largest number of electric cars in US

Hyundai Motor Company and Kia are ranked No. 2 following Tesla in the U.S. electric market in the first half of this year despite the effects of the U.S. Inflation Reduction Act (IRA). Their strategy of targeting the lease market, which is eligible for subsidies regardless of the IRA, is believed to have been effective.

According to Motor Intelligence, a market research company, on Sunday, Hyundai Motor Company and Kia sold the second largest number of electric cars – 38,457 units – in the U.S. electric market in the first half of this year, following Tesla, which sold 336,894 cars, despite the disadvantage of being excluded from the IRA subsidies. The South Korean companies achieved good performance despite the implementation of the IRA, which provides subsidies of up to 7,500 dollars to the U.S. electric car and battery companies.

General Motors was slightly behind Hyundai Motor Company and Kia by selling 36,322 cars even though its sales of electric cars increased by more than four times compared to the previous year's first half. Volkswagen sold 26,538 electric cars, which is more than double the sales figure of the same period last year, and was ranked No. 4 in the U.S. Ford Motor Company, which was ranked in second place last year in the U.S. electric market, dropped to No. 5 by selling 25,709 cars.

CNBC said that it is especially noticeable that Hyundai Motor Company and Kia rose to No. 2 even though their cars are excluded from tax incentives in accordance with the IRA.

It is believed that the South Korean automakers’ outstanding performance is the result of their strategy to respond to the IRA by increasing the sales of commercial cars. The IRA has an exception that commercial electric vehicles are eligible for tax incentives even when they are not produced in North America. The Hyundai brand has increased leasing of its electric vehicles from roughly 2% to begin this year and has now hit more than 30%, according to Hyundai Motor America CEO Randy Parker.


Jae-Hyeng Kim monami@donga.com