Hyundai says customers are becoming wary of EVs

Hyundai believes that uncertainty about residual values ​​and battery life is reducing consumer confidence in electric vehicles.

The brand, which was one of the early pioneers for electric vehicles in the local market, is less optimistic about the used electric vehicle market, given the recent heavy discounts by rivals.

Hyundai’s chief operating officer, John Kett, said the recent reduction in EVs was “disrupting” the EV market, while car dealers and customers were unclear about what the long-term future of EVs might be.

“If everyone is pushing a certain way (on pricing), we may have to respond, but residuals are key. The second life of an EV is something I think we’re all trying to achieve, to give consumers the confidence that an EV has a life beyond the eight-year battery warranty,” he said.

Instead of taking deep discounts from its rivals, Hyundai wanted to create stability around pricing and resale value by setting up its own finance company, Hyundai Capital, to help secure the future value of electric vehicles purchased through the network.

“This is where we can really start to get involved in guaranteed future values ​​and instilling people with confidence in these vehicles. Now we will have to play this game. This is where we think the sustainability of electric vehicles will be,” he said.

“When someone can improve the confidence around second ownership of that vehicle, we think that will lead to greater consumer confidence.”

He said the problem also extended to dealers who were wary of accepting trade-ins for electric vehicles because of uncertainty about resale and the life of the car after the eight-year battery warranty.

“They will certainly engage in switching around Hyundai electric vehicles, but they are a bit reluctant to go with other brands,” he said.

Uncertainty about resale value could become the “enemy” of widespread electric vehicle adoption, Kett said.

He said the entry of cheap Chinese electric vehicles could also upset the market.

“I think everybody’s nervous about it,” he said.

“There is no doubt that they will disrupt pricing.”

He said some of the established top 10 brands that have been slow to adopt electric vehicles and hybrids will be “at some risk” of being overtaken by Chinese manufacturers.

So far, Hyundai has not shied away from the last war of discounts for electric vehicles.

Last weekend, Ford slashed thousands of dollars off its Mustang EV in response to sluggish sales.

The rebates are angering EV buyers who bought a new car only to see it offered for thousands of dollars less a week or two later, greatly reducing their car’s resale value.

Kett said the brand could potentially introduce discounts as its older Ioniq 5 and Ioniq 6 models wear out, but was more concerned about protecting resale value.

Leave a Comment