Hyundai-Kia Gearing Up to Challenge Tesla’s Dominance in the U.S. Market

According to a recent report from the Wall Street Journal (WSJ) on the 18th, Hyundai and Kia are emerging as Tesla’s primary competitors in the U.S. market.

The previous year, Hyundai and Kia sold 94,000 electric vehicles in the U.S., securing the second spot, trailing behind Tesla, which sold 650,000 units. Although Tesla maintains a substantial lead, industry experts anticipate that Hyundai and Kia will maintain or extend their lead over other companies in the current year. This growth is attributed to their upcoming electric vehicle models and competitive pricing strategies.

Their sustained and substantial investment in electric vehicles over the past decade sets Hyundai and Kia apart. They have been reaping the benefits, notably as electric vehicle sales have surged in recent years, as reported by WSJ.

Hyundai and Kia boast a comprehensive electric vehicle lineup that surpasses even Tesla, featuring fast-charging battery technology. Furthermore, they have capitalized on a sales approach that prioritizes lease vehicles, offering full tax deduction benefits under the U.S. IRA (Inflation Reduction Act).

Matthew Phillips, CEO of Car Pros Automotive Group, a dealership selling various car brands in the western U.S., highlighted the simple reason behind Hyundai and Kia’s success: “They have invested in electric vehicles step by step.” He added that they balance style, performance, and cost well.

Interestingly, a decade ago, Hyundai and Kia were considered underdogs in the U.S. market, primarily known for producing affordable vehicles. However, their image has transformed as electric vehicle sales have surged.

Inspired by Tesla’s Model 3, Hyundai and Kia announced their electric vehicle lineups in 2017 and swiftly prepared for the era of electric vehicles. This proactive approach allowed them to establish a strong presence in the U.S. market by offering electric vehicles with superior performance compared to major U.S. automakers.

Notably, while Tesla has a limited lineup of five models in the U.S., Hyundai has introduced a diverse range of models, offering consumers a wider array of choices, a factor contributing to their success, according to WSJ.

Tyson Jominy, Vice President of Data & Analytics at J.D. Power, pointed out that although Kia’s SUVs may not compete with luxury brands like Cadillac regarding gasoline vehicle pricing or performance, the dynamic changes in the electric vehicle sector have created a different landscape.

He explained, “For $55,000, you can get a Kia or a Cadillac [EV]. Those two don’t usually compete against each other.”

Nevertheless, the competition in the U.S. electric vehicle market is poised to intensify this year, with S&P Global Mobility, an automotive market research institution under Standard & Poor’s (S&P), predicting that the number of electric vehicle models in the U.S. market will double to reach 100.

Despite signs of cooling demand for electric vehicles in the U.S. and delays in investment by certain automakers, Hyundai and Kia remain committed to expanding their electric vehicle business in the country, including constructing new factories.

Steven Center, COO of Kia North America, expressed determination to expand their presence in the U.S. electric vehicle market, likening it to a horse race, saying, “It’s like a horse race, you have to get out in front as soon as possible.”