Hyundai to plug demand gap with hybrids but still sees EVs as the future

After electric car sales fell nearly 25% in the second quarter, Hyundai will lean on hybrids to boost growth. Despite a short-term “Chasm,” Hyundai expects EVs to lead long-term growth. As such, the company is doubling down on its IONIQ lineup and new low-cost EVs like the Casper Electric (Inster EV overseas).

Uncertainty brewing

“Despite the ongoing uncertain business environment,” a company official said, “including slowing demand due to continued high interest rates,” Hyundai had a record second quarter.

Although there’s a “rising trend of incentives due to intensifying competition in major markets,” Hyundai posted record sales and operating profit margins in Q2.

Hyundai’s sales rose 6.6% in Q2 2024 to over $32.7 billion (KRW 45.206 trillion), setting a new quarterly record.

With a favorable exchange rate, improved selling prices, and higher car sales, Hyundai’s operating profit reached a record of $3.1 billion (KRW 4.2791 trillion). The Korean automakers operating profit margin was over 9%.

Hyundai sold 1,057,168 vehicles globally in Q2, down 0.2% from last year. Excluding China, Hyundai’s sales were up 2.2% year-over-year. Hyundai credited strong North American sales for the growth.

Hyundai to ramp up hybrids, focus on EVs long-term

In its home market, Hyundai sold 185,737 models, down 9.6% YOY. Hyundai said the decline was due to slowing demand for EVs and souring consumer sentiment. Overseas, Hyundai sold 871,431 vehicles, up 2%, with the new Santa Fe and Genesis GV80 contributing to higher profits.

Although hybrid sales surged 26.4% (122,421), Hyundai’s EV sales slipped 24.7% (58,950) in Q2. Hyundai said the global EV market has “entered the Chasm,” or a temporary stagnation of demand.

To fill the demand gap, Hyundai plans to ramp up hybrids. Despite a short-term slip in demand, Hyundai expects EVs to lead the growth in the mid-to-long term as investments and regulations ramp up.

Hyundai will focus on expanding its IONIQ EV lineup, adding hybrids, and launching new electric cars like the Casper Electric.

Last month, Hyundai opened Casper Electric (known as the Inster EV overseas) pre-orders in Korea, starting under $23,000 (31.5 million won). With incentives, the Casper EV can be bought for as little as $14,500 (20 million won). In Europe, it will start at under $27,000 (25,000 euros).

We caught a glimpse of Hyundai’s new EV out in the wild earlier this month (You can see the video here). Later this year, Hyundai is expected to reveal its first three-row electric SUV, the IONIQ 9.

Hyundai is preparing for a shift in US EV policies, with the election coming up in November. If Trump wins, he has already promised to end the EV mandate (even though it doesn’t exist). For more flexibility, Hyundai could add more hybrids to its new EV plant in Georgia, opening later this year.

The news comes after US automaker Ford missed earnings expectations by a wide margin. Ford’s EV losses reached $2.5 billion in the first half of 2024 (read more about Ford’s Q2 2024 earnings).