Hyundai Motor EV sales in U.S. drop after IRA ends credit

Hyundai Motor's Ioniq 5. [HYUNDAI MOTOR]

Hyundai Motor EV sales in the United States have fallen since the Inflation Reduction Act (IRA) went into effect.

The company sold 1,306 Ioniq 5s into the market in September, compared to 1,984 in July.

Under the terms of the IRA, buyers of EVs assembled in the United States are eligible for a $7,500 tax credit for vehicles purchased after Aug. 16, 2022, extending an existing program that offered a $7,500 tax credit for EV purchases regardless of origin.

Buyers of foreign assembled EVs, such as the Ioniq 5, are no longer qualified for the tax credit.

The Ioniq 5 first retailed in the United States in January. In the first month, 2,414 were sold.

In September 2021, 1,770 of the earlier version of the Ioniq were sold in the United States.

Kia sold 1,440 EV's last month in the United States, a 22 percent drop from August sales.

Year-on-year Hyundai Motor's overall sales in the United States rose 11 percent to 59,465 vehicles. In August, the total was 64,335 units.

"This is the best-ever September and Q3 retail sales result for the brand," Randy Parker, Hyundai Motor America CEO, said in a statement.

Hyundai Motor plans to build an EV assembly line in Georgia, but the plant won't be completed until 2025. Kia has no plans to build an EV production plant in the U.S.

Without the tax credit, Korean-made EVs lose their price competitiveness.

Tesla's Model 3 retails for $46,990, whereas Hyundai Motor's Ioniq 5 retails for $39,950. These prices are after subsidy.

Without the $7,500 subsidy, the Ioniq 5 costs $47,450, making it more expensive than its competition.

In the first quarter, Hyundai Motor had 9 percent of the U.S. EV market and Tesla 75.8 percent.

The Korean government has been trying to convince the White House and Congress to put a hold on the tax incentives until the plant is completed.

Georgia Senator Raphael Warnock introduced a new bill, the Affordable Electric Vehicles for America Act, that would grant a grace period to automakers like Hyundai Motor.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]