Ioniq 5 with pre-contracted
Subsidies’cancelled’ if shipment is delayed due to production disruption
Kia EV6 to intensify competition over subsidies
Ioniq, an exclusive electric vehicle presented by Hyundai Motor Company 5. Photo = Hyundai Motor Company
With Hyundai’s exclusive electric car Ioniq 5 succeeding in early box office success, the Kia EV6 is unveiled, and there are signs of a civil war for electric cars.
Hyundai Motor Company and Kia Motors, which share the finished vehicle platform, have repeatedly competed in the same segment. Semi-large sedans such as the Granger and K7, mid-sized sedans Sonata and K5, and mid-sized sports utility vehicles (SUVs) such as Santa Fe and Sorento are representative. Such competition is expected to continue in the electric vehicle market as well. In particular, the number of subsidies for the purchase of electric vehicles is limited and competition is expected to be fierce.
According to the industry on the 9th, about 35,000 units of Hyundai Motor Company Ioniq 5 were contracted within a week of receiving the pre-contract. In addition to exceeding Hyundai’s domestic sales target of 26,500 units this year, the number of subsidies for electric vehicles set by the government this year is half of the 75,000 units.
The subsidy’s influence in the electric vehicle market is enormous. Not only does it have a major impact on vehicle sales, it also determines the overall market size. This is because if the government subsidies and local government subsidies are combined, when purchasing an electric vehicle less than 60 million won, as much as 19 million won can be provided.
Ioniq, an exclusive electric vehicle presented by Hyundai Motor Company 5. Photo = Hyundai Motor Company
Few consumers actually gave up subsidies and bought electric cars. Even Tesla, the number one electric vehicle brand in Korea last year, sold only 18 and 20 vehicles in January and February when subsidies were cut off.
Ioniq 5 took the lead in the subsidy competition with the announcement of its launch in Korea next month. In the case of Seoul last year, the subsidy budget ran out in September. Considering that local governments may run out of subsidy budgets in the second half of the year, Ioniq 5, which will be released in April, can enjoy the preemptive effect of subsidy. As the Ionic 5 sells a lot, the sales of other electric vehicles will decrease.
However, observations are mixed with concern about whether Ionic 5 will be able to fully enjoy the preemptive effect of subsidies. Hyundai Motor Company has not yet confirmed the production schedule for the Ioniq 5. This is because negotiations with the labor union were not completed. The problem was that the number of manpower required to produce electric vehicles was less than that of existing internal combustion engine vehicles.
Hyundai Motor Company plans to digest the amount of pre-contracted contracts within the year through increased production, but the prolonged disruption in the supply of semiconductors for vehicles is also a headache. General Motors (GM), Toyota, Volkswagen, Tesla, etc. are having difficulty in vehicle production, and Hyundai Motors is also reducing overtime and overtime as inventory is almost exhausted.
Kia unveiled the first EV6 teaser image for its exclusive electric vehicle. Photo = Hunger
In general, 300 to 400 vehicle semiconductors are contained in a single vehicle with an internal combustion engine, but more than 2000 are required for electric vehicles such as the Ioniq 5 or autonomous vehicles. Even after placing an order, automotive semiconductors take 6 months as soon as possible and 10 months as long as they are received. Considering the schedule for parts manufacturing and assembly of finished vehicles through this, production disruption is also a concern.
The terms of subsidy payment for electric vehicles also hold back Ioniq 5. In order to receive subsidies for IONIQ 5, the pre-contract must be converted into the main contract and applied after launching in Korea. When selected for subsidy support, the vehicle is registered within two months of the contract and the subsidy is received.
If the vehicle is not received within two months, the subsidy will be canceled and the electric vehicle must be purchased at personal expense. If the turnover is pushed and the vehicle is received next year, there is a high possibility that the subsidy will be cut.
These weaknesses of the Ioniq 5 are expected to enhance the competitiveness of Kia’s EV6, which will be released in Korea in July. As the EV6 was released late, there was plenty of room to make sure of the parts supply and production schedule. If smooth production is achieved, it means that the demand for concern over the Ioniq 5 subsidy could be driven to EV6.
Kia unveiled its first EV6 teaser image for its exclusive electric vehicle. Photo = Hunger
The EV6 embodies a dynamic sports utility vehicle (SUV)-shaped design, emphasizing a futuristic yet original feel. The unveiled side silhouette of the EV6 is characterized by vividly expressing the unique dynamics of an electric vehicle through a sharply polished line from the front hood to the rear spoiler.
Because it shares a dedicated platform, E-GMP, its performance is similar. Kia President Song Ho-sung introduced the EV6, saying, “You can go 500km with a single charge and secure 100km mileage with a 4-minute charge.” Detailed information on EV6 will be revealed through the world’s first public event (World Premier) at the end of this month.
An industry official said, “Even if you exclude the Ioniq 5, which has not yet been released in Korea, subsidies for electric vehicles this year are exhausting faster than last year. When the Ioniq 5 is released, the exhaustion rate will be faster. If it is late, there will be a number of consumers switching to EV6 due to concerns about subsidies. Competition between the two models over subsidies will be fierce,” he predicted.
Sesung Oh, reporter of Hankyung.com [email protected]
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