Hyundai IONIQ and Kona EV threat

There will be no more electric vehicles launched in Australia by Hyundai beyond next year’s Kona SUV until the federal government backs up its positive talk about EVs with some action.

Hyundai Australia chief operating officer Scott Grant said the company could even pull the IONIQ and Kona EVs out of showrooms if the market doesn’t show interest.

“We will wait and see what happens,” Grant told carsales.com.au at last week’s local launch of the Hyundai IONIQ.

First Australian drive reviews of the all-new IONIQ hybrid, plug-in hybrid and pure-electric model range are embargoed until this Friday (December 7) and the Hyundai Kona EV  goes on sale here in late March or early April next year

“It would be a shame if it [EV] doesn’t fly in Australia,” said Grant. “But if we can’t get a commercial outcome in Australia, if consumers don’t buy them and government isn’t interested, then the reality is we will back away from them.”

Grant said the decision to launch EVs in Australia reflected Hyundai’s worldwide ‘eco-car’ push and a change in the “narrative” and “rhetoric” about the subject in Australia over the last few years.

The Korean Hyundai automotive group (which also includes Kia) has committed to launching 38 eco-cars – hybrid, plug-in hybrid, EV and fuel cell drivetrains – by 2025.

Hyundai is the biggest automotive brand in Australia to launch either an EV or plug-in hybrid. It sits third in sales behind Mazda and hybrid trailblazer Toyota.

“The important words here are words like ‘narrative’ and ‘rhetoric’ as distinct from action,” said Grant about federal government attitude toward EVs.

“We want to see two things; some sort of support for car companies to develop the technology and introduce them to the market and, on the flipside, some sort of consumer incentive that encourages them to purchase in this direction. Ideally, you’d want both and at the moment you’ve got neither.

“At the end of the day it’s a matter of leadership; someone in government has to say ‘what does Australia stand for in terms of its technology, in terms of its safety systems to an extent, in terms of its environmental credentials’.

“Are we an advanced high-tech progressive country and marketplace, or are we a secondary market following as the rest of the world moves on? Or are we even behind that?”

With a federal election due by May 18, 2019, Grant conceded there was no prospect of any action in this area before then. Post the election it will take months – at least -- before legislation is enacted.

“It could easily be 12 months or more of inaction,” Grant predicted.

Which explains why Hyundai is prepared to have this initial crack at EVs but not expand beyond Kona.

“With what we see in the [Australian] market over the next year to two years to three years, the IONIQ range and the Kona EV are fine,” said Grant. “Beyond that it really requires a change in the market.”

But Grant warned Hyundai Australia will abandon the whole exercise if the market never moves towards green vehicles.

“We need a commercial outcome from these products and if the market and the environment is not right and in time it’s proved to be unsuccessful in that context, then the product destined for Australia would end up in other countries in the world.”

In 2017, just 1123 electric vehicles were sold in Australia according to VFACTS, although Tesla doesn’t report and it accounts for around another 1000 sales.

There are no federal incentives offered for the import or sale of EVs. A new set of emissions regulations, which may encourage the take-up of EVs if stringent, has been under study in Canberra for several years.

Grant conceded subsidies and incentives for EVs primarily help rich people pay a little less for an expensive car – a Tesla Model S is priced from $146,512, while the new Jaguar I-PACE costs $119,000 – which hardly motivates politicians to act on them.

But with pricing for the IONIQ EV starting at $44,990, making it the cheapest EV currently sold in Australia, he argued the impact of incentives would be a more significant help for mainstream vehicle buyers.

“We want this to be a real alternative for average Australians. This is not an elitist vehicle,” he said

Having said that, the IONIQ is initially only available through 18 of Hyundai’s 170 Australian dealers. The EV is expected to account for 50 per cent of IONIQ sales and most of them will go to government and private fleets.

Watch this space for our first Australian review of the new Hyundai IONIQ range this Friday (December 7).