[Car Talk Forest] Ioniq 5 and Model Y Ready for Launch... Focus on Price and Charging Infrastructure

Reform of Zero-Emission Vehicle Subsidy System... Hyundai and Tesla Pricing Policies Also in Focus

[Asia Economy Reporter Yu Je-hoon] This year is being called the ‘first year of electric vehicle popularization.’ Global automakers are also putting great effort into launching new products. Among them, the spotlight is on Hyundai Motor Company’s crossover utility vehicle (CUV) Ioniq 5 and Tesla’s affordable sports utility vehicle (SUV) Model Y, both set to be released in the first half of the year. Can the Ioniq 5 break through the stronghold Tesla has built in the electric vehicle market?

The biggest battleground between the Ioniq 5 and Model Y is expected to be ‘price.’ On the 21st, the government reformed the zero-emission vehicle subsidy system, deciding to provide full subsidies for vehicles priced under 60 million KRW and only 50% for vehicles priced between 60 million and 90 million KRW. The intention is to focus support on affordable vehicles rather than luxury ones to popularize eco-friendly cars.

[Image source=Yonhap News]

The current price of the Model Y sold in the United States ranges from $49,990 to $59,990 (approximately 55 million to 66 million KRW). It is expected to be somewhat higher than the price of the compact sedan Model 3 currently sold domestically (54.7 million to 74.7 million KRW).

In this case, the electric vehicle subsidy for the Model Y may be halved. Even with national and local government subsidies combined, it would amount to around 5 million KRW, making the actual purchase price fall in the 50 to 60 million KRW range. This is a factor that may cause hesitation among the general public, whose financial situation is not easy. In fact, the most popular Long Range trim of the Model 3 received a national subsidy of 8 million KRW last year, but this is expected to drop significantly to 3.41 million KRW this year.

The price of the Ioniq 5 has not been disclosed yet. However, considering Hyundai’s aim to make this year the first year of electric vehicle popularization, the dominant view is that it will be priced in the 50 to 60 million KRW range, which qualifies for full subsidy. Although there may be exceptions depending on the trim, this could be an attractive point as the actual vehicle purchase price could be reduced to the 30 to 40 million KRW range.

Since electric vehicles require charging, consumers cannot ignore the charging infrastructure of Hyundai and Tesla. Hyundai plans to install a total of 120 ‘Hi chargers’ nationwide in urban areas and on highways this year. Hi chargers are ultra-fast electric vehicle chargers equipped with 350 kW charging technology. The first charging station Hyundai opened this year is the ‘EV Station Gangdong’ located at SK Networks Gildongchaeum in Gildong, Gangdong-gu, Seoul, where eight Hi chargers were installed. It is known that the Ioniq 5 can be fully charged in 30 minutes using a Hi charger.

Tesla also plans to add ultra-fast electric vehicle charging facilities called Superchargers at 27 locations nationwide this year. Considering that five Superchargers are installed at each location, about 130 chargers are expected to be added in total. However, it is still uncertain whether Tesla will install the V3 Superchargers capable of 250 kW charging.