Hyundai, Kia see strong demand for EVs, despite rivals' concerns
17/11/2023 19:50
By Abhirup Roy
LOS ANGELES, Nov 17 (Reuters) - Hyundai Motor
005380.KS and Kia 000270.KS see strong U.S. demand for
electric vehicles (EVs), senior executives at the South Korean
automakers told Reuters ahead of the Los Angeles Auto Show.
The comments run against industry fears that inflation and
higher interest rates will undermine the boom in EV sales. Other
major EV makers from Tesla TSLA.O to Ford Motor F.N have
pushed back EV-related factory buildouts in the face of
economy-related concern.
"I am still very bullish on the battery electrics," Jose
Munoz, Hyundai's global chief operating officer, said in Los
Angeles ahead of the auto show that opened on Friday, adding the
company's EV sales were doubling year-over-year.
"Our investments in the battery electric plant in Savannah
(Georgia) move on. So we're pushing as much as we possibly can
to get it ready by October next year," he said. "(Investments)
are not on track. They are accelerated. We are pulling ahead."
Munoz added that, "based on what I see, I need more. If I
had more capacity today, I could sell more cars."
Kia, which is 34% owned by Hyundai, has a similar view as
its sister company.
"We're still growing organically despite the weather
outside," said Steven Center, chief operating officer at Kia
America, referring to the economic climate. "We're not seeing a
slowdown."
He added that Kia was expanding into additional segments
that would power EV growth. "All things being equal, as they say
in economics, we'll continue to grow in volume, and the EV side
will do most of the growing."
Inflation and high interest rates have raised the costs of
buying a car. Electric-vehicle makers meanwhile are dealing with
supply-chain bottlenecks and pricing pressure from Tesla, which
led EV price cuts this year.
The average price paid for a new EV in the United States
fell to just over $50,000 in September from more than $60,000 in
January, according to Cox Automotive.
The cuts helped drive EV sales in the third quarter up 50%
from a year earlier to a record of more than 300,000 vehicles.
Still, Tesla CEO Elon Musk last month flagged his concerns
about expanding factory capacity until interest rates ease,
echoing similar signs of caution from General Motors GM.N and
Ford.
Startups Lucid LCID.O and Fisker FSR.N cut their 2023
production targets this month and Swedish EV maker Polestar
PSNY.O trimmed its delivery forecast and halved its margin
guidance for the year.
About one in four Americans in the market for a new car
intend to buy an EV, according to consumer insights firm the
Langston Co. That is not enough, said Spencer Imel, a partner at
Langston.
"As early adopters have converted there is a lack of newly
interested consumers to keep demand for the EV category high,"
he said.
To be sure, many in the industry are still trying to
understand EV trends. Japanese automaker Subaru's 7270.T chief
executive, Atsushi Osaki, told Reuters he was not sure about
demand in the short term but was committed to the EV market.
"There might be a bit of stagnation due to inflation at the
moment, but as we look at it over a long span to 2030, we
believe that we'll have the ability to have battery EVs make up
for about half of our sales," he said. "However, as it's the
market that decides in the end, we'll adapt flexibly to that."
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(Reporting by Abhirup Roy in Los Angeles; Editing by Peter
Henderson and Matthew Lewis)
((abhirup.roy@thomsonreuters.com; +1 415 941 8665;
@abhiruproy30;))