Elon Musk Notices As Hyundai Quietly Climbs The EV Sales Charts

The hottest things in the auto industry right now - the most electric electrics - come from Hyundai Motor Co and Kia Corp. 

Earlier this year, South Korean automakers introduced two new battery-powered vehicles, the Hyundai Ioniq 5 and its sibling, the Kia EV6, which quickly surpassed the Nissan Leaf, Chevrolet Bolt, and every other electric vehicle on the market that was not made by Tesla.

Hyundai and Kia sold 21,467 of these two vehicles in the United States this year through May, outselling even the hot Ford Mustang Mach-E, which was purchased by 15,718 drivers.

“From an EV perspective, they’re really just kind of cleaning the floor,” said Edmunds analyst Joseph Yoon. “I honestly don’t know if any dealers around me have any in stock.”

Tesla continues to sell far more vehicles, but it took the company a decade to deliver as many electric vehicles as Hyundai and Kia have in a matter of months. Musk was also impressed.

To be sure, Hyundai is not a startup. According to Steve Kosowski, manager of long-term strategy at Kia America, the design of the current hits began about six years ago. Kia considered a car similar in size and scope to the Chevrolet Bolt, which had just hit the market at the time. Ultimately, Kosowski and company approved something much larger, sportier, and swankier - albeit at a slightly higher cost.

“The thinking was, with the platform we have and the market understanding we have, let’s put together a really bold, breakthrough proposition,” he recalls. “We’re going to make a statement that Kia is here.”

The timing was ideal. EV adoption is increasing in the United States, owing to a rise in both climate concern and gasoline prices. And, despite a surge in demand for battery-powered vehicles, there aren't many to choose from. Only a few of the 30 or so models on the US market can be had for less than US$45,000 (RM198,000), and the majority of those are relatively small, dated cars like the Nissan Leaf.

The Ioniq 5 and EV6 both have the cargo space of a small SUV, which is the size and shape of vehicle that has recently taken over US garages. Both cars are built on the same modular platform, use the same motors and batteries, and have similar top speeds. 

They also have a couple of novel features in the space: regenerative braking pedals and bi-directional power (yes, you can run power tools or charge another EV with one of these machines).

Starting around US$40,000 (RM176,000), they are attracting buyers with smaller budgets who would otherwise buy a starter sedan, according to Edmunds' Yoon. Nonetheless, they are plush enough on the inside to attract buyers from the top of the market, as drivers trade in luxury cars with internal combustion engines.

According to Kia, roughly three out of every four EV6 buyers have previously driven a car from another brand, and only one out of every ten has previously owned a plug-in vehicle. According to Bloomberg Intelligence, the current waitlist for the EV6 is about six months long, and the average transaction price is a few thousand dollars above the sticker price, indicating that most buyers are willing to pay a premium.

According to Kosowski, the new Hyundai products capitalise on "Tesla fatigue," as the first-mover sedans and SUVs become ubiquitous even beyond coastal states. Also, Hyundai owners are sticking with what they know - according to Edmunds, roughly 60% of those who recently traded in a Hyundai or Kia stayed with the brand.

Hyundai intends to launch a new battery-powered vehicle every year for the rest of the decade and is investing US$16.5 billion (RM72.60 billion) in South Korean EV production. By 2030, the automaker hopes to control 12% of the global EV market, or 3.2 million cars and trucks.

"They definitely have an advantage," Yoon says. "It will be interesting to see if Toyota and Subaru can catch them." - According to Bloomberg