Hyundai’s Ioniq 2 Could Be the Low-Cost EV the Market Needs

The EV share of the U.S. new car market has grown more than 800% since 2019 — but it’s flattened out in recent months and industry analysts say the high cost of today’s all-electric models is a major problem as EVs go from niche to mainstream. Hyundai hopes to address that problem, a senior exec has hinted, with a new entry-level model likely to be dubbed the Hyundai Ioniq 2. More from Headlight.News.

The average cost of a new EV is now around $58,000, according to J.D. Power, while conventional gas-powered vehicles come in closer to $46,000. That price gap is one of the reasons, analysts suggest, that EV growth has leveled off in recent months.

Now, the race is on to press into more affordable segments, and one of the products reportedly in the works will come from Hyundai in the form of the Ioniq 2. Set to slot below current models like the Ioniq 5 crossover and Ioniq 6 sedan, the new EV is expected to come in below the price of the newly redesigned Hyundai Kona EV which will start around $34,000.

Priced out of the market.

EV sales surged during the last four years, from less than 1% of the U.S. new vehicle market in 2019 to 8% of retail sales by early 2023. But that share has flattened out and the broad consensus is that, as the industry tries to take the technology from niche to mainstream it is running into a serious price barrier.

“Expanding the price points at which buyers can get into electric vehicles will help make them more accessible,” said Stephanie Brinley, principal auto analyst with S&P Global Mobility.

Just how low must automakers go is a matter of debate, but it’s clear that EVs won’t regain traction until there are more products below the current average of around $60,000.

“Everybody in the industry knows the target of this kind of vehicle is 20,000 euros,” or $22,000 at the current exchange rate, Andreas-Christoph Hofmann, the marketing chief for Hyundai Europe, told Automotive News last summer.

Automakers set their sights lower

Only a handful of EVs currently fall into what might be called the “affordable” segment, though more are coming. General Motors has promised that the new Chevrolet Equinox EV will start around $30,000. It has just ended production of its base Chevy Bolt EV and EUV models, which started at $26,500 before delivery fees. GM has confirmed a complete Bolt makeover is in the works but hasn’t revealed pricing.

All the other products under $30,000, including the latest version of the Nissan Leaf, the first mass-market EV, offer limited range. The second-gen EV from Mini will do better than the original, but still manage just 150 miles per charge.

Even at less than $30,000, “People would be a lot more comfortable if they could get it to 200 miles,” said Sam Abuelsamid, automotive lead with Guidehouse Insights.

What Hyundai has in store

So far, Hyundai hasn’t even confirmed an Ioniq 2 is in the works, though several company officials have told Headlight.News on background that an entry-priced EV is definitely in the works.

It all but certainly will come in below $30,000, at least in base form. And, to help meet that target, it will use lithium-iron-phosphate, or LFP, batteries. They’re cheaper than the more common lithium-ion cells used in the Hyundai Ioniq 5 and 6, but do sacrifice some range. So, getting up to at least 200 miles will be part of the challenge, said Abuelsamid.

He also said he expects the entry Hyundai to share the same underlying platform as the Kia EV3. That was one of two all-electric models the Hyundai’s Korean sibling introduced at the LA Auto Show last month. Two senior Kia insiders told Headlight.News on background that the EV3 is a production program, though they wouldn’t discuss details.

Timing and availability

We can expect to see them, “but not for at least 18 months,” Sam Fiorani, chief analyst with AutoForecast Solutions. And the timing is expected to be similar for the Hyundai Ioniq 3 as they both should roll down the same assembly line in South Korea.

It’s unclear if they might be built elsewhere, as well. The two brands are partnering on an EV plant in Georgia set to open in about a year.

The question is whether either the Hyundai Ioniq 2 or Kia EV3 will make it to the U.S. Abuelsamid says that’s not clear yet. They’ll likely be a perfect size for the Korean and European markets, but they could be a bit too small for American tastes. Then again, he added, if they can deliver at least 200 miles that would be a plus. Using an updated version of Hyundai Motor Group’s current E-GMP platform could permit the Ioniq 3 to push into the 250-mile range, reported Electrek, even with LFP batteries

Another advantage is that EVs offer class-above interior space by using those skateboard-like platforms. They move batteries and motors below the load floor. That means space normally used for an engine compartment can be repurposed for passengers and cargo.

More EV news

EVs are helping blunt oil prices

EVs help U.S. set all-time fuel economy record, says EPA

Half of Buick dealers take buyouts rather than invest for EVs

Big plans

Expect to see still more entry-level models, some breaking that 200 mile barrier. Volkswagen this month showed off one possible competitor dubbed the ID.2all. And Honda is pushing forward after breaking out of a joint venture with GM that was supposed to target under-$30,000 EVs.

Getting into more affordable segments could prove critical for the Hyundai Motor Group if its to meet its stated goal of selling at least 3.6 million EVs annually – along with the Genesis and Kia brands – by 2030.