Ioniq 5 Released, Concerns Over Subsidy Exhaustion Arise

Hyundai Ioniq 5

[Asia Economy Reporter Changhwan Lee] Hyundai Motor's first dedicated electric vehicle, the Ioniq 5, has officially begun delivery to domestic customers. However, concerns over parts supply and the early depletion of electric vehicle subsidies remain significant.

According to the automotive industry on the 1st, Hyundai started delivering the Ioniq 5 in order of reservation numbers from the pre-order volume on the 28th of last month. The Ioniq 5, which began pre-orders on February 25, set a record of 23,760 units on the first day. It is reported that a total of about 40,000 units have been pre-ordered since then.

Although vehicle delivery to domestic customers has officially started, it is uncertain whether the entire pre-order volume will be delivered within this year. This is due to concerns over parts supply as well as subsidy issues.

The Ioniq 5 experienced production disruptions due to problems in some of Hyundai Mobis's facilities that produce the drive motors. Production was also halted from the 7th to the 14th of last month due to a shutdown at the Ulsan Plant 1. Hyundai reduced the planned production of the Ioniq 5 for this month from 10,000 units to 2,600 units, and it is reported that the delivery of drive motors has not yet normalized.

The electric vehicle subsidy situation is also unfavorable. Due to production delays causing late deliveries, there is a possibility that some contracted units may not qualify for subsidies. According to the Ministry of Environment, as of the 29th of last month, the subsidy application rate compared to the announced number of electric passenger car subsidies is 80.2% in Seoul and 58.4% in Busan.

As subsidies began to be distributed in earnest in March, Tesla swept up about 3,000 units, and with the delivery of the Model Y expected next month, concerns are further escalating. Last year, subsidies from major local governments including Seoul, Busan, and Sejong were mostly depleted by the end of September.