[Hyundai Way Secret ⑤] Hyundai Motor's EV Trio Defies 'IRA Tilted Playing Field', Closely Chasing Tesla

Hyundai Motor and Kia Target US Market with Ioniq 5, EV6, and EV9
Tesla and Hyundai Motor Market Share Gap Narrows Annually
Hyundai Motor's US Market Share Hits Double Digits for the First Time
Tesla's 50% Share at Risk... Full-Scale Competition Begins Next Year

"Hyundai is doing pretty well."

This is what Elon Musk, CEO of Tesla, said on his X (formerly Twitter) account in June 2022. As of 2024, does Musk's evaluation of Hyundai Motor still hold true? Looking at the trend of Tesla's market share in the U.S. electric vehicle market, it seems there is little time for Musk to be complacent with the phrase "doing pretty well."

On the 9th, Asia Economy commissioned the Korea Automobile Mobility Industry Association (KAMA) to investigate the U.S. electric vehicle market share from January to July over the past five years. The gap between Tesla and Hyundai has narrowed from 75 percentage points in 2020 to 40 percentage points in 2024.

In the U.S. electric vehicle market from January to July this year, Hyundai Motor and Kia achieved a double-digit market share (11.1%) for the first time ever, securing second place. Meanwhile, Tesla, which ranked first during the same period, dropped to 51.1%. According to data from another market research firm, Cox Automotive, Tesla's U.S. electric vehicle market share fell below half (49.5%) for the first time in its history as of the second quarter.

◆ Hyundai’s U.S. Electric Vehicle Plant Operation... Full-Scale Competition Starting Next Year= When Musk posted that tweet in the first half of 2022, Tesla's influence in the U.S. was still solid. It held a 65% market share and expanded the market size. However, as of July this year, just two years later, Tesla's share dropped to 51.1%. Instead, Hyundai Motor and Kia, the second-ranked companies (11.1%), have squeezed into the space left by Tesla's decline. The strong sales of Hyundai Ioniq 5, Kia EV6, and this year, the Kia large SUV EV9, which sold over 10,000 units, contributed significantly.

Hyundai has set next year as the start of full-scale competition with Tesla. The electric vehicle-only plant in Georgia, U.S., is expected to begin pilot operations as early as October this year, and full production could completely change the market landscape. Currently, Tesla receives about 10 million KRW in electric vehicle subsidies under the U.S. Inflation Reduction Act (IRA). In contrast, Hyundai, which sells electric vehicles produced in Korea in the U.S., does not receive these subsidies. It is competing on a kind of 'tilted playing field.' Hyundai Motor Group expects that selling electric vehicles produced at its U.S. plant starting next year will enable more aggressive market share expansion.

Hyundai has secured not only price competitiveness but also technological superiority. Comparing the same class of high-performance electric vehicles from the two brands, Hyundai Ioniq 5 N outperforms Tesla Model Y Performance in maximum motor output, top speed, zero to 100 km/h acceleration time (zero to sixty mph), and charging speed.

The Ioniq 5 N’s zero to 100 km/h acceleration time is 3.4 seconds, 0.3 seconds faster than the Model Y Performance’s 3.7 seconds. In terms of charging speed, the Ioniq 5 N can charge from 10% to 80% in 18 minutes, while the Model Y Performance charges from 5% to 55% in 15 minutes. This is because Hyundai’s maximum charging power is 350 kW, higher than Tesla’s 250 kW.

◆ Toyota Challenges in Hydrogen Vehicles= Hyundai also holds competitiveness in the hydrogen fuel cell vehicle sector. It is regarded as the only company globally that challenges Toyota’s dominance. Hyundai succeeded in mass-producing hydrogen fuel cell vehicles for the first time in the world in 2013 and launched the hydrogen fuel cell passenger car Nexo in 2018. In 2020, Hyundai also succeeded in mass-producing the world’s first hydrogen fuel cell heavy-duty truck, the Xcient Fuel Cell truck.

At the same time, Toyota released the first-generation Mirai sedan hydrogen fuel cell vehicle in 2014. Having lost the title of ‘world’s first mass-produced hydrogen vehicle’ to Hyundai, Toyota hurriedly announced the second-generation Mirai model (released in 2020) ahead of Hyundai’s second-generation Nexo. The currently sold second-generation Mirai has somewhat better specs and features than the first-generation Nexo from six years ago.

Hyundai plans to launch the new second-generation Nexo full-change model in May next year. The new Nexo will be equipped with a 2.5-generation hydrogen fuel cell system. The driving range per single charge is expected to increase significantly compared to the current system (609 km). Especially, the evolution of the hydrogen fuel cell system is expected to contribute to building a hydrogen society.

Jang Jae-hoon, President of Hyundai Motor, recently said, "The hydrogen fuel cell system is continuously evolving and advancing," adding, "After the 2.5-generation, the third generation will come out, and it will expand applications not only to automobiles but also to other fields such as industrial batteries and generators."

Japanese companies such as Toyota and Honda are also actively participating in hydrogen fuel cell development. Toyota has partnered with BMW to jointly develop the third-generation hydrogen fuel cell system. The next-generation fuel cell system is expected to be first installed in BMW hydrogen fuel cell vehicles as early as 2028.

Honda has teamed up with General Motors (GM) to target the North American hydrogen fuel cell vehicle market. Since January this year, the two companies have started mass production of jointly developed hydrogen fuel cell systems at the Detroit plant in the U.S. Honda plans to launch the CR-V hydrogen fuel cell vehicle equipped with this system in the U.S. within this year.