Hyundai Is Becoming the New TeslaNEWS | 19 December 2024Hyundai has a lot riding on a patch of rural Georgia. In October, the South Korean auto giant opened a new electric-vehicle factory west of Savannah at the eye-watering cost of $7.6 billion. It’s the largest economic-development project in the state’s history (one that prompted the Georgia statehouse to pass a resolution recognizing “Hyundai Day”). For now, workers at the so-called Metaplant are building the company’s popular electric SUV, the Hyundai Ioniq 5, and soon more EVs will be built there, too. And to power those vehicles, Hyundai is set to open a battery plant at the site, and is spending billions to open another one elsewhere in Georgia.
Hyundai’s plan will allow the Ioniq 5—and other future electric cars already in the works—to qualify for tax credits implemented by the Inflation Reduction Act. American-made EVs are eligible for rebates that can knock thousands of dollars off their price, making them far more appealing to consumers. But Hyundai’s nearly $13 billion investment may soon hit a snag. In his second term, President-elect Donald Trump has said he will make those tax credits history. If he follows through on that promise, EV sales will surely slow, and Americans will buy more gas guzzlers that will produce emissions for the decade-plus they’ll be on the road. The problem is worse than it might look: The auto industry is investing more than $300 billion to meet the Biden administration’s EV goals. Most automakers are hemorrhaging money on EVs, and revoking these incentives may give them an excuse to roll back their plans to introduce electric cars, which would give consumers more clean-driving options.
Even if Trump cracks down on EVs, Hyundai might be uniquely well-equipped to keep Americans interested in going electric. The Hyundai Motor Group’s three brands—Hyundai, Kia, and Genesis—have emerged as a distant second to Tesla in EV sales this year. But their electric cars come with price tags, battery ranges, and high-tech features that are hard to beat. Hyundai’s Ioniq 6 sedan retails for about the same as a Tesla Model 3, but can recharge more quickly. The company’s cars also allow Americans to go electric in ways they could not previously: Before the Kia EV9, families looking for a truly spacious three-row SUV had no good electric options. “As the EV scene is about to possibly get shaken up to its core,” Robby DeGraff, an analyst at the consulting firm AutoPacific, told me, Hyundai’s eclectic lineup “is something Tesla lacks.” In spite of Elon Musk’s bromance with Trump, the most important EV company of his second term may turn out to be Hyundai.
It may sound weird that Musk has cheered on Trump’s desire to claw back EV incentives, but Tesla is rare in that it is profitably building EVs at scale. It can weather the loss of tax credits better than others. If the EV tax credits evaporated tomorrow, start-ups such as Rivian and Lucid Motors would face major headaches. They’re still in the early, money-losing stage that Tesla was in for almost two decades: They lack the economies of scale to sell EVs at high volumes and cheap prices. Their EVs are still on the expensive side, so they’ll need all the help they can get to cross the “valley of death.” That’s even a problem for big legacy companies. Ford is already backtracking as electric sales fail to meet expectations and costs keep mounting; it’d be hard to justify more EVs without government help to win over new buyers.
A scant few companies’ electric efforts could be fine without the incentives. Besides Tesla, there’s General Motors. It has spent the year implementing a surprise turnaround of its electric operations after a disastrous 2023, and it’s also making more and more affordable EVs—while approaching profitability as well.
Then there’s Hyundai. Besides Tesla, it is perhaps the only major car company in the United States making money off EVs, and it is bringing out new electric models at a frantic clip. Hyundai’s EV push has been a rare bright spot for an industry buried under mounting losses and strategic blunders. In 2024, Tesla’s sales have slipped, perhaps in part because the company’s lineup of EVs is starting to feel a bit stale: Besides the Cybertruck, which starts at nearly $80,000, Tesla hasn’t introduced an entirely new model since 2020. Tesla has promised again and again that it will release an electric car for less than $30,000, but it has failed to deliver as it now pivots to robotaxis.
By comparison, Hyundai’s EVs are starting to outclass Tesla’s. Take the Kia EV3. The high-range compact car, which is already on sale in Europe and South Korea, will likely start at about $35,000 when it comes to the U.S. in 2026. At the recent Los Angeles Auto Show, all three Hyundai brands showed off new models, which will each be able to access Tesla’s previously exclusive Supercharger network straight from the factory. In doing so, Hyundai’s brands will sell as many EV models with Tesla’s plug type as Tesla does. On the other end of the spectrum, Hyundai has an EV that simulates the engine sounds and gear shifts found in a high-performance gas car, with none of the emissions. Meanwhile, they do other things Teslas are barely starting to do, such as power entire homes in an emergency. Tax credits or not, “we generally believe this is going to be what the customers will demand,” José Muñoz, Hyundai’s global CEO, told me.
Hyundai has come a long way from the early aughts, when it was a punch line in hip-hop music. To the degree that Hyundai cars were enticing to American buyers, it was because they were generally cheaper than a comparable Honda or Toyota (but usually not as good). Hyundai’s glow-up isn’t just about EVs. It’s about bringing Tesla levels of technology to the “traditional” car industry. In recent years, Hyundai has poached some of the industry’s top design and engineering talent to become a leader in both areas; acquired Boston Dynamics to get into the robotics space; inked a deal to provide Hyundai EVs for Google’s driverless Waymo taxi service; and established itself as the first brand to sell new cars on Amazon.
The irony of Hyundai’s transformation is that the South Korean government aided in it with the kind of regulatory support that Trump may now cut off for the United States. That included incentives to help the country build out its own battery industry, leaning on Korean tech giants such as LG, SK On, and Samsung to wean itself off China, which dominates the battery sector. And with roughly 8,000 jobs just at the Georgia Metaplant, the U.S. seems to be benefiting from Hyundai’s renaissance as much as its home country. Perhaps the economic rationale for preserving the EV incentives may save them. Georgia Governor Brian Kemp, a Republican, has been a big cheerleader for Hyundai’s investments in his state; most of the investment under the Inflation Reduction Act of 2022 has gone to Republican districts.
If Trump does nix the EV tax credits, Hyundai should still be in a good place. Its decision to make EVs and their batteries here should keep their costs down, DeGraff told me. That’s especially true as Trump threatens tariffs, which could hit cars made in Mexico and South Korea. But without EV tax credits, Hyundai can only do so much to keep selling electric cars. Hyundai has especially benefited from a loophole that makes it much cheaper to lease EVs, and without those discounts, buyers may decide that the known headaches around charging and range anxiety aren’t worth the trouble. DeGraff said that his firm, AutoPacific, has found that three-quarters of potential buyers say tax credits are an important consideration for EV buying. Ultimately, Hyundai’s big EV investments in America will test this question: Are Americans still willing to go electric if they aren’t heavily subsidized to do so?
In the end, they probably will if they’re getting a good deal—and that’s where Hyundai is poised to do well. “Affordability will continue to be the main make-it-or-break-it [factor] for EV shoppers, especially if we see a wave of new tariffs applied to literally everything outside of the automotive space that will consequently squeeze Americans’ wallets even tighter,” DeGraff said. Trump almost certainly is bad news for EV sales, but he alone will not dictate what cars Americans buy. During his coming presidency, car companies will have even more of an onus to make EVs that Americans will want to buy regardless of whether they care about the environment. The promise of Hyundai is that it has quietly figured out a road map on how to get there: Regardless of tariffs or tax credits, it’s hard to resist a sweet deal on a good car.Author: Elizabeth Rush. Patrick George. Zoë Schlanger. Source
