Hyundai and Kia lower EV prices in South Korea

The price war for electric cars is picking up speed not only in China - but now also in South Korea. The country's two largest manufacturers, Hyundai and Kia, announced significant price cuts for their electric models sold in South Korea, accompanied by increased government subsidies.

Hyundai and Kia have lowered the prices of their electric models on the South Korean domestic market, in some cases significantly. Officially, it is a temporary campaign that will run from October until the end of the year – and is accompanied by a government subsidy. The Ministry of Environmental Protection explains the move with lower demand in the current year.

Hyundai is granting discounts of four million won (equivalent to about 2,800 euros) for the Ioniq 5 and Ioniq 6 and two million won (1,400 euros) for the Kona Electric. In addition, there are 800,000 won (approx. 560 euros) in subsidies from the state for each.

At Kia, the prices for the EV6 drop by a total of 3.84 million won (3.2 million won manufacturer’s rebate plus 640,000 won government subsidy), or almost 2,700 euros in total. The Niro EV and Niro Plus are each discounted by 1.44 million won, or just over 1,000 euros. (1.2 million won manufacturer’s rebate plus 244,000 won government subsidy).

Why the government subsidies differ so much between the E-GMP models from Hyundai and Kia, as well as compared to the technically related Kona Electric and Niro EV, is not clear. What is clear is that there are also other benefits, such as lower interest rates for financing.

According to a report by Bloomberg, customers in Seoul can expect even lower prices due to local subsidies. The discounts are supposed to boost domestic demand in the face of growing competition from abroad. Most notably, Tesla launched sales of its Model Y in South Korea in July. Moreover, EV sales in South Korea are declining slightly compared to the previous year. From January to August 2022, 71,744 electric cars were sold, while in the same period in 2023, the Ministry of Environment registered only 67,654 EVs.

“A price war will intensify next year in Korea as foreign carmakers may release new models,” Lee Hang-Koo, head of the Jeonbuk Institute of Automotive Convergence Technology, told the news agency. “US or European brands made in China could draw popularity.”

bnnbloomberg.ca, hyundai.co.kr (in Korean), kia.com (in Korean)