Hyundai Motor Group hints to join EV price battle amid intensifying competition

Kia Corp.’s EV6 [Courtesy of Kia]

“In the intensifying competition of electric vehicle (EV) prices, it is crucial to prioritize safeguarding the market rather than profitability and make a frontal breakthrough,” said Kia Corp. Chief Financial Officer Joo Woo-jeong as he announced the carmaker’s second-quarter results on Thursday. “We see the ongoing price competition in the EV market as a strong challenge.”

His remarks indicate that the Hyundai Motor Group is also likely to join the discount competition in the EV market.

According to the automotive industry sources on Sunday, the EV price competition that is putting pressure on global car manufacturers, including Hyundai Motor Group, was triggered by Tesla Inc., the world’s leading electric vehicle company, at the end of last year. Since end-2022, Tesla has repeatedly lowered prices in major markets such as the U.S. and China. From May, the company has been offering discounts of over $1,300 on inventory Model 3 vehicles in the U.S. Elon Musk, the chief executive officer of Tesla, also expressed his willingness to sacrifice margins for the time being to increase vehicle production.

As a result, many car companies that were previously adhering to a “hold-on” strategy are now following suit. Ford Motor Co. reduced the price of the base model of its electric pickup truck F-150 Lightning, which used to be sold for $59,974, by 17 percent ($9,979). Ford has also reduced the price of the electric sports utility vehicle Mustang Mach-E by about 8 percent. While the industry sees Ford’s decision as helpful for expanding sales, there is a possibility that profitability may worsen, leading to continued losses in the EV business. General Motors Co. (GM) also reduced the starting price of the Cadillac EV Lyriq in China to 379,700 yuan from 439,700 yuan, a 14 percent reduction. German automaker Volkswagen AG has decided to reduce the prices of its ID. series in China by 8 to 27 percent.

In response to this, the Hyundai Motor Group plans to expand its EV lineup by model category. “Following the EV6, Kia has a full lineup of electric cars, including EV9 and EV5. We will try to maintain our current competitive advantage,” said the Kia CFO.

The Hyundai Motor Group plans to increase the number of electric vehicle models to 31 by 2030, comprising 11 from Hyundai Motor Co., 13 from Kia, and seven from Genesis. This diverse lineup is considered a strength in the EV discount competition, as it allows the group to maintain profitability for models outside the segment where price competition is intense.