Hyundai Motor, Kia on alert as Chinese EV makers reshape market

(Hyundai Motor Group)

South Korean automakers Hyundai Motor Co. and Kia Corp. are facing challenges amid the intensifying competition in the electric vehicle (EV) industry led by Chinese vehicle manufacturers, according to industry insiders on Tuesday.

The automakers are also under tightened environmental regulations in Europe, making business more difficult just as their local peers like Volkswagen and Stellantis.

“The rapid growth of the EV market has slowed due to the inconvenience of charging and high EV prices,” said an insider from the automotive industry on Tuesday. “Competition also intensifies as affordable Chinese EVs have started entering the export market.”

The official noted that it is an emergency not only for Europe but also for Hyundai Motor and Kia.

Lee Hang-koo, director of the Jeonbuk Institute of Automotive convergence Technology (JIAT) urged Korean automakers and parts suppliers to jointly respond to a crisis.

As the automotive paradigm shifts towards software-centered products and services, Lee emphasized that Chinese companies are driving disruptive innovation in the global market.

He highlighted the need for thorough preparation, especially given the comprehensive nature of the automotive industry and its extensive impact on related sectors.

Hyundai Motor‘s EV sales saw the largest drop in Europe in the third quarter of 2024.

Kia also experienced a significant decline in Europe, although its EV sales increased year-on-year thanks to the introduction of new models such as the EV3 and EV9 in Korea and the United States.

The weak EV sales in Europe were led by a decline in EV demand and the growing presence of Chinese EV manufacturers.

Hyundai Motor and Kia, however, have sufficient technology to overcome industry struggles, insiders noted.

“Chinese EVs have yet to enter North America, and Europe is considering tariffs and other barriers against Chinese EVs,” Kim, Kyoung-you, a senior research fellow at the Korea Institute for Industrial Economics & Trade (KIET), said. “If EV demand rebounds, it could present an opportunity for Hyundai Motor and Kia.”