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Hyundai’s electric vehicle, the Ioniq 6. (courtesy of Hyundai Motor)

After recording its highest-ever first quarter performance in the US market this year, the Hyundai Motor Group’s electric vehicle (EV) sales have fallen due to the effects of the US’ Inflation Reduction Act (IRA).

On Tuesday, the group announced that its US sales during the first quarter of this year (January to March) totaled 382,354 vehicles. This reflected 198,218 sales of Hyundai Motor units — including its luxury Genesis brand — and 184,136 sales of Kia vehicles.

The respective totals were up by 15.6% and 21.8% from the same period in 2022. Both individually and combined, it was the companies’ highest-ever first quarter sales performance.

But in terms of EV sales, the total amounted to 14,703 vehicles — down by 6.5% from the same quarter in 2022. Hyundai Motor saw a 25% increase with 8,623 vehicles sold, while Kia’s sales of 6,080 vehicles represented a 31.1% drop.

The decline appeared to result from the company missing out on purchasing credits following implementation of the IRA.

According to the law, tax credits of up to US$7,500 are offered for purchases of EVs produced in North America. But due to stringent conditions such as the requirement that batteries must be produced and assembled in North America, Hyundai and Kia models are not eligible. Even the Genesis GV70, which began production last February at a factory in Alabama, is not eligible for the credits.

Analysts suggested that while Hyundai Motor was able to increase its sales through new models such as the Ioniq 6 and the Electrified GV70, Kia’s lack of new models meant that it bore the full brunt of exclusion from the credits. Hyundai Motor currently sells six EV models in the US, while Kia sells two.

The Hyundai Motor Group plans to work toward finding new avenues by expanding the percentage of commercial EV sales — including leases and rentals, which are eligible for tax credits under the IRA — from 5% to 30%.

By Ko Han-sol, staff reporter

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