South Korea’s Hyundai and Kia have suffered from declining electric vehicle sales and market share since implementing the Inflation Reduction Act in the US in August 2022.
Hyundai, Kia market share declines
The market share of these two brands under the Hyundai Group declined to 4.4% on average in Q4 2022. It represents a notable decline from their market share of 12.5% in January 2022, Business Korea reports, citing data obtained by Kim Hae-jae on Wednesday.
According to the report, Kim is a Trade, Industry, Energy, SMES, and Startups Committee member under the National Assembly.
Fortunately, the South Korean brands’ market share has slightly rebounded so far in 2023. Refer to the data below:
- January: 5.2%
- February: 5.9%
- March: 6.1%
- April: 7.9%
- May: 8.9%
- June: 8.2%
Their Jan-June market share demonstrates a notable increase from the 4.4% record in Q4 2022. However, the brands still have to completely rebound to their pre-IRA records.
Reuters also reported last year that Hyundai and Kia sold over 39,000 EVs in the US in Jan-Jul 2022. However, the IRA stopped this sales momentum since going into effect in August.
Alarmingly, the IRA has also caused the brands’ global market share to drop. The Global Electric Vehicle (EV) Sales Trends revealed that Hyundai and Kia’s market share declined 1.2 percentage points to 4.9% in the first half of this year.
“Even though the demand for EVs has increased with the implementation of the IRA, our companies are suffering. Given the proven impact of the IRA on our country’s EV industry, the government should actively develop countermeasures.”
Kim Hae-jae, Trade, Industry, Energy, SMES, and Startups Committee member
Tesla gains advantage
Leading American automaker Tesla gained a significant edge in the US electric vehicle industry, owing to the incentives offered by IRA.
Tesla’s EV sales reached 336,892 units in the US in the first half of 2023, up 30% YoY. This significant growth is largely due to the impacts of the IRA, considering that Tesla EVs qualify for federal tax credits of up to $7,500.
For reference, here are the top-selling EV brands in the US in H1 2023:
| Brand | Jan-June 2023 Sales | Jan-June 2022 Sales | YoY % Change |
| Tesla | 336,892 | 259,790 | 30% |
| Hyundai-Kia | 38,457 | 34,518 | 11% |
| General Motors | 36,322 | 7,820 | 365% |
| Volkswagen Group | 26,538 | 12,424 | 114% |
| Ford | 25,709 | 22,979 | 12% |
See Also:
- Tesla battery suppliers enjoy shares growth amidst IRA tax credits
- Tesla price cuts partly offset by federal tax credits
- Local power battery production continues to expand, driven by a clause in IRA
- Tesla exceeds Q2 delivery estimates driven by price cuts and federal credits
- Tesla expects to meet the requirements for the Inflation Reduction Act fully
Tesla, indeed, is the largest beneficiary of the IRA’s EV incentives. In fact, Tesla models have been acknowledged as the most American-made vehicles in 2023. As we all know, the IRA requires automakers to locally produce their offerings to benefit from the federal incentives.
All that said, Hyundai and Kia must work on establishing domestic production in North America to fully recover its market share.
