- The former president has threatened to scrap the Inflation Reduction Act.
- Hyundai Motor Group has already decided to add a hybrid line to its EV factory in Georgia.
- Global sales of Hyundai’s hybrid models surged 17% in Q1 2024.
With the possibility of former President Donald Trump returning to the Oval Office now greater than ever, Hyundai and Kia are expected to scale back their battery-electric vehicle plans and increase focus on hybrid vehicles.
The Korean manufacturers have invested billions into U.S. manufacturing thanks to the introduction of the Inflation Reduction Act (IRA) introduced under the current Biden administration. However, Trump has threatened to scrap the IRA, and while the election is still some months away, market analysts believe Hyundai, Kia, and Genesis will need to shift focus.
Read: Hyundai Will Also Build Hybrids At Its Georgia EV Factory
The possibility of a Trump presidency, as well as a slowdown in the EV industry, has already prompted the Hyundai Motor Group to add a hybrid production line to its mega factory in Georgia, which was initially conceived as a BEV-exclusive site.
“Even if Trump pushes ahead with a pledge to abolish EV subsidies, the Korean carmakers will be able to tackle the upcoming risks by mixing production for hybrid cars (at their EV manufacturing facility in the U.S.),” Hana Securities analyst Song Sun-jae told The Korea Times.
Hyundai is moving to offer hybrid engines on all its existing models and developing new hybrid powertrains for its small vehicles. This shift in focus is already said to have paid dividends for the conglomerate, with Q2 operating profits expected to reach a record of around 8 trillion won or $5.7 billion.
Global sales of Hyundai’s hybrid vehicles rose 17% in the first quarter of 2024. It sells hybrid and plug-in hybrid versions of the Tucson, Santa Fe, Elantra, and Sonata in the U.S., while Kia offers hybrid powertrains in the Niro, Sportage, and Sorento.
The growth in EV sales has slowed this year, and if Trump returns as president for a second term, sales could slow even further.
“EV sales in the U.S. fell by 3.8 percent in June from a year earlier,” Eugene Investment & Securities analyst Han Byung-wha said. “Most overseas carmakers, such as Tesla, Volkswagen, Mercedes, suffered a slowdown in their EV sales, but sales for typical hybrid cars surged by 32.5 percent during the same period, which demonstrates customers’ preference is shifting from EVs to hybrid cars. If Trump regains power, EV sales are feared to suffer an additional fall.”
