Last month, South Korea's electric vehicle exports to the United States dropped by more than 97% compared to a year ago. The reduction in subsidies and the expansion of local production in the U.S. coincided with a significant decrease in export volume.
According to the Korea Customs Service's export-import statistics on the 24th, South Korea exported 164 electric vehicles to the U.S. in July, a decrease of 97.4% compared to the same month last year (6,209 units). This is the lowest figure since 2021 on a monthly basis.
So far this year, the monthly decrease rate has remained in the 80% range, surpassing 90% for the first time last month. Compared to the 13,280 units recorded in March last year, it represents a reduction to about 1%.
From January to July this year, the cumulative exports to the U.S. totaled 8,443 units, a decline of 88.4% compared to the same period last year (72,579 units).
The background of the decrease includes the reduction of the electric vehicle tax credit in the U.S. and the expanded local production of Hyundai Motor and Kia. The Hyundai Motor Group is increasing its proportion of electric vehicle production in the U.S. to reduce tariff burdens, resulting in a decrease in the volume sent from Korea to the U.S.
The Federation of Korean Industries recently analyzed that the annual electric vehicle sales of Hyundai Motor Group in the U.S. could decrease by a maximum of 45,828 units and $1.95508 billion (approximately 2.72 trillion won).
Hyundai is also halting domestic production lines due to poor sales. The Ulsan Plant No. 1 Line 12 (producing the Ioniq 5 and Kona EV) was closed from the 14th to the 20th of this month, marking the sixth such closure this year.
Meanwhile, the Hyundai Motor Group's 'Hyundai Motor Group Metaplant America (HMGMA)' established in Georgia is seeing all of its local production end up being sold in the U.S.
Industry experts expect that the ending of the U.S. electric vehicle tax credit, which had reached $7,500, is scheduled for next month, indicating that the export slump is likely to continue. Consequently, there is growing support for diversifying export markets, focusing on regions like Europe which are strengthening carbon neutrality policies.
Indeed, last month, overall electric vehicle exports increased by 12.3% compared to the same period last year, thanks to a rise in exports to Europe. An industry official remarked, 'The U.S. market is unlikely to recover easily due to tariffs and cuts in subsidies,' adding, 'We need to find opportunities in other regions like Europe.'