Hyundai is joining the ranks of automakers like Ford and GM in prioritizing hybrid vehicles over electric vehicles (EVs) in the short-term. The South Korean automaker has confirmed plans to boost hybrid production at its Georgia factory, which was previously slated for electric model production. This decision comes after Hyundai experienced a significant rise in demand for hybrids during the first quarter of the year.
In the first quarter, Hyundai’s hybrid sales accounted for over 20 percent of Korean sales and just under 11 percent of U.S. sales. Meanwhile, its EV sales experienced a decline compared to the previous year. In Korea, EV sales dropped by around half, and in the United States, they fell by more than a full percentage point.
One potential reason for the fluctuating demand for EVs could be Hyundai’s lack of eligibility for federal tax credits. However, this situation is expected to change when Hyundai begins manufacturing vehicles at its Georgia plant later this year. This development will make the company’s EVs eligible for federal tax credits, likely bolstering their appeal to consumers.
While the current numbers may seem disappointing for EV sales growth, it’s important not to make doom and gloom predictions just yet. In March, Hyundai had a tremendous month for EV sales, doubling its figures compared to the previous month. Furthermore, overall sales for the automaker were up in the first quarter. This indicates that there is still potential for growth in the EV market.
Hyundai’s electric models are known for their competitive features, including impressive range estimates, useful technological innovations, and eye-catching designs. These factors contribute to their appeal among consumers who are considering purchasing an EV.
Following a similar path, Hyundai’s sister company, Kia, recently announced an increased focus on hybrid models and cheaper electric options. Kia cited slowing demand for EVs and the need to compete with a growing number of Chinese vehicles on the market. The company will also begin producing EVs in the United States later this year, which will make them eligible for tax credits and potentially boost sales.
In conclusion, Hyundai’s decision to prioritize hybrid production over EVs aligns with the strategies of other major automakers. While EV sales may have experienced a temporary decline, there is still potential for growth in the market. Hyundai’s competitive electric models and Kia’s plans for hybrid models and cheaper electric options demonstrate their commitment to the overall goal of electrification. With the upcoming eligibility for federal tax credits and the expansion of EV production in the United States, both Hyundai and Kia are positioning themselves for future success in the evolving automotive industry.
