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Hyundai Motor Co (OTC:HYMTF) and Kia Corp reportedly plan to decrease the prices of several electric vehicles (EVs).
This move comes in light of the South Korean government's decision to expand subsidies as it aims to revive the dwindling interest and demand for clean vehicles in the country, according to a report from Bloomberg.
The Ioniq 5, Ioniq 6, and Kona EV from Hyundai and the EV6, Niro EV, and Niro Plus from Kia will be subject to this price reduction.
The report added that these price cuts are scheduled to commence next month and are expected to be in effect until the close of 2023.
The report cited Lee Hang-Koo, who leads the Jeonbuk Institute of Automotive Convergence Technology, highlighting that EV sales have decelerated in South Korea this year.
The reason for this downturn is the stagnating economic growth. This trend, combined with the newly announced price cuts, may further fuel the escalating price competition in the nation's automotive industry, where Hyundai and Kia hold major sway.
Lee also pointed out that the impending price battle might heat up next year, especially if foreign auto manufacturers unveil new models in the Korean market.
Cars from American and European brands, especially those manufactured in China, could potentially become crowd favorites.
Also Read: EV Competition: Kia Motors Launches Its Cheapest EV In South Korea
KG Mobility Co., previously known as Ssangyong Motor Co. before it went bankrupt, released an electric SUV priced at $30,000. This release was in collaboration with China's BYD Co (OTC:BYDDY).
The proposed price reductions could potentially heighten international tension surrounding EV pricing.
With the new subsidies and price reductions, some cars could be about one-third cheaper in South Korea than in other nations.
The report cited statistics from the Ministry of Environment, government of South Korea, that EV sales during the first eight months of the current year dropped to 67,654 units from 71,744 during the same period in the previous year.
Interestingly, though the Seoul city government allocated subsidies for 13,688 EVs this year, only 5,522 vehicles have availed of this benefit so far.
Also Read: Hyundai Clinches 12% Wage Hike Deal With South Korea Union: Report
Price Action: HYMTF shares closed higher by 3.99% at $39.66 on Monday.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
