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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] Hyundai Motor has announced a temporary suspension of production for its electric vehicles (EVs), the Ioniq 5 and Kona Electric, due to a slowdown in demand. The production halt will take place at the Ulsan Plant Line 12 from February 24th to 28th, marking the first such suspension this year.
The decision comes as both domestic and international demand for electric vehicles remains sluggish, showing limited signs of recovery. In an internal memo, Hyundai Motor stated, "Due to the electric vehicle 'chasm,' sales of the Ioniq 5 and the backlog of orders have been decreasing." The company also indicated that the demand for electric vehicles is expected to decline further due to anti-EV policies, such as the recent withdrawal of the electric vehicle mandate by the Trump administration in the United States.
Despite efforts to boost sales through various promotional activities, including enhanced financial benefits like the “Hyundai Electric Vehicle Standard,” “Lease Promotion,” and “Hyundai EV Zero-Burden Promotion,” the company stated that it is still struggling to overcome the current slowdown. "Even though we've been working diligently with promotional activities and improved sales conditions, it's still difficult to overcome the chasm," the memo continued.
The company emphasized that the decision to halt production was made after facing mounting inefficiencies and challenges in maintaining normal operations. "We have continued to operate Line 12 despite the challenges, but we have now reached a point where it is no longer sustainable," said Hyundai Motor.
The domestic sales of the Ioniq 5 have been underperforming, particularly in South Korea, with just 75 units sold in the past month, partly due to uncertainties surrounding government subsidies for electric vehicles. In contrast, sales of the Ioniq 5 in the United States have shown a strong increase, with 2,250 units sold last month, marking a 53.6% year-on-year growth.
Additionally, Hyundai has been expanding local production in the U.S. to meet the requirements of the Inflation Reduction Act (IRA) and to prepare for potential tariffs under the Trump administration’s “universal tariff” policy. Hyundai began producing the Ioniq 5 at its U.S. plant, MetaPlan America (HMGMA), starting in October of last year.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
