The 'Xteen' Generation Emerging as Major Players in Electric Vehicle Leasing

Faster Understanding of New Technologies with Purchasing Power... Hyundai Capital Accelerates Its Strategy

[Asia Economy Reporter Yu Je-hoon] As the presence of electric vehicles (EVs) grows in the automotive market, the 'X-teen Generation,' referring to those born in the 1970s, is emerging as a major force in the electric vehicle leasing market. Hyundai Capital is actively responding by launching leasing products that consider the consumption characteristics of the X-teen Generation, who possess purchasing power.

According to the Korea Automobile Manufacturers Association (KAMA) on the 27th, last year Hyundai Motor Company and Kia's electric vehicle sales increased by 98.1% compared to the previous year, reaching 348,783 units. As a result, Hyundai and Kia's global electric vehicle sales ranking rose by one step, entering the top 5.

The rapid rise of electric vehicles is clearly reflected in domestic statistics as well. According to the Ministry of Land, Infrastructure and Transport's vehicle registration statistics, as of the end of March this year, out of 25,071,80 registered vehicles in Korea, electric vehicles accounted for 258,253 units, surpassing 1% of the total vehicle share. Notably, this number increased by 74.9% compared to the same period last year.

The electric vehicle trend is also evident in the car leasing market. Car leasing offers lower monthly payments than installment plans and provides convenient additional services such as tax benefits and vehicle management, leading to a rapid increase in users. The domestic car leasing and rental market has an average annual growth rate of 14%.

Electric vehicle leasing is a product born from the combination of two major emerging trends: eco-friendly mobility and car leasing. Because these two big trends are combined, the growth rate is even more explosive. According to Hyundai Capital, as of the end of last year, the proportion of electric vehicle leases among all car leases was 7.42%, more than five times higher than in 2020 (1.47%). The leasing share of hybrid vehicles also nearly doubled compared to the previous year. Conversely, the share of internal combustion engine vehicles dropped significantly from 94.80% to 85.52%.

In particular, the X-teen Generation holds a significant share in the electric vehicle leasing market. The term X-teen Generation was introduced by Professor Kim Nan-do of Seoul National University as one of the top 10 trends in 2022, referring to those born in the 1970s, previously called the X generation. Although the so-called MZ Generation has recently received great attention as the main driver of new consumption trends, industry insiders explain that considering actual purchasing power and economic strength, the generation that deserves more attention than the MZ Generation is the X-teen Generation. The X-teen Generation is characterized by a superior ability to absorb new technologies and trends compared to previous generations, valuing rationality while not hesitating to spend on themselves or their Z-generation children.

According to industry sources, electric vehicle leasing strongly appeals to the X-teen Generation as a product that is both rational and embodies new values and paradigms. Hyundai Capital's analysis of actual electric vehicle leasing customers shows that as of the end of last year, those in their 40s accounted for the largest share at 34.73%, followed by those in their 30s (24.26%) and 50s (23.31%). The 40s age group also showed the largest increase in share compared to the previous year.

Hyundai Capital has closely analyzed the consumption characteristics and lifestyle of the X-teen Generation and incorporated them into its electric vehicle leasing products. First, Hyundai Capital's electric vehicle leasing allows the payment of acquisition tax and automobile tax in installments, reducing the initial lump-sum burden. Additionally, it offers lower monthly payments than installment plans, making it popular among the X-teen Generation, who prioritize economic rationality.

Currently, electric vehicles are characterized by active development of related new technologies and rapid technological advancement. Therefore, the cycle for new car releases is short, and there is abundant demand for vehicle replacement. Considering this, Hyundai Capital operates products that waive early termination fees if the contract period of 24 or 36 months is fulfilled. Electric vehicle subsidy benefits are also attractive. Using Hyundai Capital's electric vehicle leasing, customers can conveniently secure nationwide local government subsidies through proxy application for subsidies and receive priority subsidy application based on their residence.

Furthermore, Hyundai Capital provides charging fee discounts to help customers operate electric vehicles economically. New customers using Hyundai Capital electric vehicle leasing through Hyundai Motor Company and Kia sales representatives can receive a 50% discount on charging fees when using the 'SS Charger' fast chargers operated by Estraffic, and a 20% discount when using fast chargers operated by Korea Electric Power Corporation. The discount benefits are provided up to a combined monthly maximum of 300 kWh at the two charging stations, offering an annual discount of up to approximately 560,000 KRW.

A Hyundai Capital official stated, "Electric vehicle leasing embodies two major trends that are rapidly rising not only in Korea but also in the global market, attracting great attention," adding, "We are developing and launching various products and services tailored to the X-teen Generation, who are leading these new trends."