"Hyundai Motor Group to Face IRA Impact from Early Next Year... Urgent Measures Needed After US Midterm Elections"

"Half a Year Until Hyundai Motor and Kia Acquisition... Subsidies Received Until the End of This Year"
Response Measures Must Be Developed by the First Half of Next Year After the US Midterm Elections

[Asia Economy Reporter Kiho Sung] Since the enactment of the U.S. Inflation Reduction Act (IRA), Hyundai Motor Company and Kia have shown fluctuating results in electric vehicle sales in the United States. Industry insiders and experts explain that the monthly sales figures are based on the time the vehicle is delivered to the consumer, so they do not immediately reflect the impact of the Inflation Reduction Act. However, they advise that from the first half of next year, the decline in sales due to the Inflation Reduction Act may become more pronounced, so measures should be prepared promptly after the U.S. midterm elections.

According to Hyundai Motor America (HMA) on the 3rd, the October sales volume of the electric vehicle Ioniq model was 1,580 units (Ioniq 5: 1,579 units, Ioniq: 1 unit). This is a 21% increase compared to the 1,306 units sold in September. It is also an increase compared to the 1,517 units sold in August, after the Inflation Reduction Act excluded Korean-made electric vehicles from subsidy eligibility.

On the other hand, according to data from Kia America (KA) website, the EV6 sales volume in October was 1,186 units, down by 254 units from 1,440 units in September. This represents a 17.6% decrease month-over-month. The September sales of the EV6 had already decreased by 21.7% compared to August (1,840 units). The decline has been continuous since August.

While Hyundai and Kia have received different sales results, industry experts point out that it is still difficult to confirm a direct impact of the Inflation Reduction Act on sales figures.

Currently, purchasing a Hyundai or Kia electric vehicle in the U.S. requires an average waiting period of about six months after the contract. In other words, the vehicles sold in October were contracted around April to May. Since the U.S. Inflation Reduction Act took effect on August 16, vehicles contracted before that date are still eligible for subsidies.

Additionally, it should be noted that all Hyundai and Kia electric vehicles sold in the U.S. are produced entirely in Korea and then exported. Professor Pilsoo Kim of Daelim University’s Department of Future Automotive Studies explained, "All Hyundai and Kia electric vehicles sold in the U.S. are produced domestically and then transported by sea over about a one-month period. In the short term, the numbers may drop depending on how many units were shipped from Korea."

Experts suggest that considering these factors, the effects of the Inflation Reduction Act will become more apparent starting from the first half of next year. Therefore, they emphasize the need to prepare concrete countermeasures from after the U.S. midterm elections (November 8) through the first half of next year. According to foreign media, contracts for Hyundai and Kia electric vehicles have decreased by about 30% since the implementation of the Inflation Reduction Act.

Professor Kim stated, "There may be changes in the U.S. political landscape after the November midterm elections, which could provide an opportunity to revisit the legislation. For now, companies need to absorb the shock caused by subsidy exclusions and resolve related issues before the law’s effects fully materialize in the first half of next year, after the midterm elections."

This content was produced with the assistance of AI translation services.