Hyundai Halts Production of Ioniq 5 and Kona Electric Due to Dwindling EV Demand
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Synopsis
Hyundai Motor is suspending production of its Ioniq 5 and Kona Electric models due to a slowdown in electric vehicle demand. This decision will affect operations at the Ulsan Plant 1 in South Korea as the company aims to adjust production in response to declining sales and orders.
Key Takeaways
- Hyundai Motor is halting production of Ioniq 5 and Kona Electric.
- Production suspension is scheduled from Feb. 24-28.
- January domestic sales for Ioniq 5 were only 75 units.
- Sales in the U.S. have risen by 15 percent year-on-year.
- Industry experts predict a prolonged global demand slowdown.
Seoul, Feb 7 (NationPress) Hyundai Motor has announced a temporary suspension of production for its Ioniq 5 and Kona Electric models, as diminishing demand for electric vehicles (EVs) continues to affect sales, according to industry sources on Friday.
As per the sources, Hyundai Motor will cease operations on Line 12 at its Ulsan Plant 1 in South Korea from Feb. 24-28 to modify production levels amid lackluster domestic sales and a drop in orders, as reported by Yonhap news agency.
This line is responsible for manufacturing both the Ioniq 5 and the Kona Electric.
In January, Hyundai Motor sold merely 75 units of the Ioniq 5 in the domestic market, with total sales for 2024 reaching approximately 16,600 units, which is below market forecasts.
To stimulate demand, the automaker has recently implemented discounts and additional incentive programs.
Industry analysts suggest that the cooling EV market, coupled with policy uncertainties surrounding the second Donald Trump administration in the United States, may lead to an extended global demand downturn.
On a brighter note, Hyundai Motor experienced a 15 percent increase in sales in the United States compared to a year ago in January, achieving its highest sales for that month so far.
Last month, Hyundai Motor's U.S. sales reached 54,503 units, compared to 47,543 units sold during the same month last year, according to the automaker.
This year-on-year growth was fueled by a 74 percent surge in hybrid model sales and a 15 percent increase in electric vehicle (EV) sales, with the Santa Fe hybrid EV (HEV), Tucson HEV, and Ioniq 5 and 6 EVs all achieving record sales in January.
Sister company Kia, which is South Korea's second-largest automaker, also reported a 12 percent rise in U.S. sales, totaling 57,007 units in January, marking a record for the company.
The increase in sales was attributed to its range of sport utility vehicles (SUVs) and strong performance of the new K4 sedan.
