October 05, 2022 13:31
Hyundai and affiliate Kia's electric car sales in the U.S. plunged more than 10 percent last month due to a prolonged global chip shortage.
The debacle comes even before U.S. state subsidies for EVs made outside North America are scrapped in the coming months.
Hyundai on Monday said it sold just 1,306 Ioniq 5s in the U.S. in September, down 14 percent from August and 34 percent from July respectively.
Kia also sold only 1,440 EV6s last month, down 22 percent from August and 16 percent from July.
The carmakers said their sales, which had thundered along at 2,000 to 3,000 units earlier this year, fell because there is less demand for the carmakers' all-electric cars, which were released last year. The global supply crunch for auto semiconductors is also still making it hard for the carmakers to keep up with overall demand.
Their combined sales of both EVs and combustion-engine cars in September stood at 120,642, down 11 percent from August.
Pundits predict that the Inflation Reduction Act, which went into effect on Aug. 16, will make things even worse since the scrapping of tax credits will make their electric cars less competitive.
The Biden administration and Democratic Party are promoting the IRA as a major legislative achievement ahead of midterm elections in November, which means it is unlikely to be significantly amended. Both the Ioniq 5 and the EV6 no longer qualify for U.S. tax credits of up to US$7,500 as they are produced in Korea.
However, U.S. leaders have signaled a grace period for Korea automakers while they complete production facilities in the U.S.
There is also a silver lining in Hyundai's global sales, which soared 24.4 percent on-year to 355,040 cars last month, while Kia's increased 11 percent to 249,146.
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