Hyundai to halt Ioniq 5, Kona EV production again amid weak demand
Hyundai Motor is set to temporarily halt production of electric vehicle models the Ioniq 5 and Kona EV at its Ulsan plant, marking its third production suspension this year amid sluggish global EV demand.
According to industry sources on Tuesday, Hyundai Motor plans to suspend operations on the second production line at Plant 1 in Ulsan, where both the Ioniq 5 and Kona EV are manufactured for domestic and overseas markets.
'Internal notification about the suspension has been distributed within the Ulsan plant, including to the labor union, and the company is currently awaiting the union's approval,' an industry insider said on condition of anonymity.
Once finalized, the suspension will take place from May 27 to 30, following earlier five-day shutdowns in February and April.
In its internal notice, Hyundai cited the 'prolonged slump in global EV sales' as the main reason for the suspension. The company acknowledged challenges in boosting Ioniq 5 sales despite offering a 6 million won ($4,300) discount, roughly 15 percent of the vehicle's price, along with various other promotional efforts.
Thanks to those efforts, domestic sales of the Ioniq 5 and Kona EV between January and April rose 11.4 percent and 92.6 percent year-on-year, reaching 4,125 and 1,198 vehicles sold, respectively. However, these gains were overshadowed by sharp declines in exports.
Ioniq 5 exports from the Ulsan plant during the same period plunged 64 percent year-on-year, from 27,476 to 9,663 vehicles. Exports of the Kona EV also dropped 42.1 percent to 3,428 vehicles.
To manage the growing inventory, Hyundai has adjusted its production pace on the line, which is capable of producing up to 27.5 EVs per hour. The company has been leaving 1 out of every 3 positions on the conveyor belt vacant and has not assigned any weekend shifts to the line since March.
Kim Pil-su, a professor of automotive engineering at Daelim University, however, called the production halts a temporary adjustment in Hyundai's EV strategy rather than a long-term retreat.
'While global competition has intensified, particularly with the expansion of Chinese EV brands, the broader adoption of electric vehicles is taking longer than expected,' Kim said. 'But the shift to EVs is inevitable. This current slowdown in pace is unlikely to become permanent.'
forestjs@heraldcorp.com
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