Hyundai Motor has announced a temporary suspension of its electric vehicle (EV) production, halting the assembly of the IONIQ 5 and Kona EV due to a slowdown in demand, according to a report from Chosun. The decision underscores the challenges facing the EV market and the impact of changing global policies on the automotive industry.
Hyundai Motor Halts EV Production in Ulsan
According to industry sources on the 6th, Hyundai Motor will shut down production at Line 12 of its Ulsan 1 Plant, which manufactures the IONIQ 5 and Kona EV, from February 24 to 28. This move is intended to adjust production volume in response to a decline in domestic demand and reduced order volumes.
Declining Sales and Market Slowdown
Hyundai Motor has struggled with sluggish domestic sales of its electric models. In January 2025, only 75 units of the IONIQ 5 were sold domestically. Despite selling 16,600 units in 2024, the numbers fell short of expectations. Hyundai previously attempted to boost sales by offering financial incentives and discounts ranging from 1 million to 3 million won, but these efforts have not sufficiently stimulated demand.
The decline in orders has resulted in empty conveyor belts at the Ulsan plant, with production lines for the IONIQ 5 and Kona EV running without vehicles to assemble. This scenario highlights broader concerns about the slowing demand for electric vehicles, both domestically and internationally.
Impact of US Policy and Global EV Trends
Hyundai’s decision to halt IONIQ 5 production is also linked to global market trends. The company has observed a drop in global EV demand, which has impacted domestic sales. Since October last year, Hyundai has ramped up EV production in its newly built Hyundai Motor Group Meta Plant America (HMGMA) in the United States. If US exports decrease, domestic production also faces reductions.
Additionally, the year-end and early-year expiration of EV subsidies have led to a significant drop in demand, further exacerbating the challenges in maintaining steady production levels.
Hyundai’s Response to the EV Market Crisis
To counteract sluggish sales, Hyundai Motor is offering financial benefits and promotional initiatives. The company has introduced incentives of up to 3 million won to encourage purchases of the IONIQ 5. Moreover, Hyundai launched the ‘2025 Every Care’ program last month, providing EV inspection services, fire safety programs, and residual value guarantees to attract potential buyers.
Future Outlook for Hyundai’s EV Strategy
Hyundai’s temporary production halt highlights the volatility of the electric vehicle market. While the company remains committed to expanding its EV lineup, market conditions and policy changes will play a crucial role in shaping its future strategies.
The suspension of production at the Ulsan 1 Plant serves as a critical reminder of the evolving automotive landscape, where demand fluctuations, global policies, and economic factors dictate manufacturing and sales trends. As Hyundai continues to navigate these challenges, it will likely reassess its EV strategy to align with market realities and emerging consumer preferences.
For now, Hyundai Motor’s focus remains on adjusting production schedules, optimizing sales incentives, and preparing for future shifts in the global EV sector.
