"Hyundai Motor Joins Price Competition with Tesla, Slashes Price by 5.5 Million Won"

Responding to Price Cuts by Competitors Including Tesla

Hyundai Motor Company has initiated price cuts for electric vehicles in the United States. This comes amid a contraction in the global electric vehicle market and the onset of a price-cutting competition triggered by Tesla.

According to industry sources on the 31st, Hyundai recently launched the 2024 model of the mid-size electric sedan 'Ioniq 6' in the U.S. The price of the new Ioniq 6 has been significantly reduced by $2,450 to $4,100 (approximately 3.3 to 5.5 million KRW) compared to the previous model.

In particular, the model with the largest price cut is the entry-level Ioniq 6 SE Standard. The price of this vehicle is $38,615, which is $4,100 cheaper than the previous model. The higher trims, SEL and Limited models, saw price reductions of $2,450 each.

Hyundai Motor Company Ioniq 6 Photo by Yonhap News

Hyundai appears to be aiming to increase its market share in the U.S. electric vehicle market through aggressive price cuts. Unlike competitors such as Tesla, Hyundai is not eligible for benefits under the U.S. Inflation Reduction Act (IRA).

Vehicles eligible for IRA benefits can receive subsidies of up to $7,500 (approximately 10.17 million KRW) in the form of tax credits, which Tesla and others have used to reduce vehicle prices.

Earlier, Tesla responded to the influx of low-priced Chinese electric vehicles by lowering prices from the beginning of this year, and other automakers have joined this trend, sparking a price competition in the electric vehicle market.

Meanwhile, the growth of the global electric vehicle market, including the U.S. and Europe, is showing signs of slowing down. Accordingly, U.S. automakers such as Ford and GM have partially postponed their electric vehicle investment plans and are adjusting their pace.

There are also warnings that continued price cuts by electric vehicle manufacturers may not be sustainable.

Harald Wilhelm, Chief Financial Officer (CFO) of German automaker Mercedes-Benz, stated at an analyst briefing on the 26th of last month (local time), "The market has stagnated due to severe price competition. Some companies are selling electric vehicles at prices lower than internal combustion engine vehicles despite high production costs," adding, "It is hard to imagine that the current situation is sustainable for everyone. The electric vehicle market is quite brutal."