Hyundai Motor is set to temporarily shut down production of the Ioniq 5 -- its flagship electric vehicle model -- and the Kona EV at its Ulsan auto manufacturing site later this month, amid a continued downturn in the EV market.
According to sources on Friday, production lines for these two battery-powered models at the Ulsan plant will suspend operations from Feb. 24 to 28.
An internal memo from Hyundai’s Ulsan plant highlighted, “Sales volume and backorders (for the two car models) are declining. … The second Trump administration’s reversal of (the US') EV policies could prolong the demand slowdown for electric cars.”
A Hyundai Motor official confirmed that the production shutdown is "only temporary,” but declined to disclose the specific number of vehicles affected during this period, citing confidentiality.
The Ulsan plant, comprising five facilities, produces approximately 6,000 eco-friendly vehicles and internal combustion engine cars per day, including the Ioniq 5, Kona EV, Santa Fe and Palisade SUVs, as well as the Genesis GV60, GV70 and GV80.
In addition to being sold in Korea, the car models produced in the Ulsan plant are exported to the US, China, India, Turkey, Czech Republic, Brazil, Indonesia, Singapore and other countries.
Following the decrease in backorders, the production line for the Ioniq 5 and Kona EV has recently been operating in “ghost pitch” mode, with empty conveyor belts running without vehicles to assemble. Notably, domestic sales of the Ioniq 5 have been sluggish, selling 16,605 cars in 2024 -- up from 14,213 the previous year -- with just 75 sold last month.
The increase in Hyundai Motor’s local production in the US also seems to have influenced the temporary halt in domestic production. Since October last year, the company has been manufacturing the Ioniq 5 at the newly established Hyundai Motor Group Metaplant America in Georgia, leading to a drop in production in Korea.
In addition, the sharp decline in EV demand during the year-end transition period, when eligible car models for a $7,500 US EV consumer subsidy had remained unconfirmed, has resulted in conservative production decisions, sources said.
Last month, the US Department of Energy initially included Hyundai Motor’s Ioniq 5, Ioniq 9, the Genesis GV70 Electrified and Kia’s EV6 and EV9 in this year’s subsidy list. However, after two weeks, Hyundai cars were removed because the SK On batteries that powered them contained graphite sourced from China, which the US has designated as a “foreign entity of concern.”
In an effort to boost domestic sales of its EVs, Hyundai Motor is offering promotional discounts of up to 5 million won ($3,450) per model. Discounts for the Ioniq 5 and Kona Electric are 3 million and 4 million won, respectively.
By Byun Hye-jin (hyejin2@heraldcorp.com)
