Hyundai Ioniq 5 buyers face lack of subsidies

The buyers of Hyundai Motor Co.'s Ioniq 5 all-electric car could face lack of state subsidies for EV purchases as a global chip shortage affects the model's production, industry sources said Thursday.

Hyundai began the delivery of the Ioniq 5 on Thursday but still lacks traction motors essential to manufacture the new model.

The company has received about 40,000 preorders for the Ioniq 5 since Feb. 25 and was planning to produce 10,000 units in April to meet demand. But it cut the output target to 2,600 units due to parts shortage.

An extended chip shortage would have an impact on the company's vehicle production and second-quarter earnings results, Executive Vice President Seo Gang-hyun, head of Hyundai's Finance & Accounting Division, said last week in a conference call on its first-quarter results.

Reduced production is expected to lead to delivery delays, raising concerns those who purchase the Ioniq 5 will suffer lack of subsidies from the central and provincial governments this year.

Those who purchased Tesla models already took some state subsidies early this year.

The subsidy from the central government is 8 million won ($7,200) for each buyer, and subsidies from provincial governments reach up to 11 million won for each buyer.

The government provides a fixed amount of subsidies a year to those who buy electric vehicles. If the subsidies are exhausted within a year, no subsidies are given to EV purchases. It is not immediately clear how much subsidies have been set aside this year.

Given the Ioniq 5 long-range models are priced at 49.8 million-54.5 million won, customers can purchase the models at the lowest price of 30.8 million won with the subsidies.

The production of the Ioniq 5 was suspended from April 7-14 due to a problem in auto parts affiliate Hyundai Mobis Co.'s production line, which rolls out the traction motor for the zero-emission model.

On Feb. 23, Hyundai unveiled the Ioniq 5, the first model embedded with Hyundai Motor Group's own EV-only electric-global modular platform as it strives to morph into a future mobility solutions provider.

Hyundai was planning to launch the Ioniq 5 in Europe last month, but the glitch delayed the launch. It plans to launch the model in the United States and other markets later this year.

Hyundai has seven domestic plants -- five in Ulsan, one in Asan and one in Jeonju -- and 10 overseas plants -- four in China and one each in the United States, the Czech Republic, Turkey, Russia, India and Brazil. Their combined annual capacity reaches 5.5 million vehicles. (Yonhap)