Hyundai sees pent-up EV demand in Canada as it slows in U.S.

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Hyundai is optimistic about the outlook for the car market in Canada, especially for electric vehicles, over the next few years. Despite slowing demand in the United States for EVs, the head of Hyundai in Canada sees strong demand north of the border and the sector continuing to grow as supply constraints ease.

“We still have pent-up demand for our EVs. We’re selling every one we get,” Don Romano, chief executive officer of Hyundai Auto Canada Corp., said during a roundtable discussion with journalists at the Los Angeles Auto Show in mid-November. “In the U.S., [demand is] slowing down and inventories are building, production is being cut by some companies, stock prices of EV companies, including Tesla, are going down. And it’s not looking good for some newer players.”

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Hyundai Motor Co. plans to introduce more than 17 new battery-electric vehicles by 2030, including 11 Hyundai models and six from its luxury arm, Genesis. The South Korean automaker already has a strong fleet of BEVs in its portfolio, including an all-new Kona EV, Ioniq 5, Ioniq 6 and an upcoming Ioniq 7 SUV slated in 2024. It also introduced its first high-performance all-electric vehicle, the 2025 Ioniq 5 N, at the 2023 Los Angeles auto show.

“As I look to 2024, there’s going to be a number of headwinds coming our way, but we intend to grow our business. We were held back this year by supply constraints; the biggest was the Vancouver Port strike,” he said. “But as we look forward to 2024, we think the industry will grow 3 to 4 per cent. There’s still pent-up demand. We’re going to see some growth. I don’t think we’re going to get back to 1.9, two million [new cars sold in Canada]. But I think we’ll get between 1.7 and 1.8 million. And we think we will outpace the industry because we probably have more pent-up demand than many of our competitors.”

Supply issues will likely be less of an issue by 2025 because Hyundai Motor Group invested US$7.6-billion to build its first electric vehicle plant in the United States. While the company has not specified which EVs will roll off the line at the new Georgia factory, production is slated to start in early 2025 or maybe sooner to take advantage of U.S. federal incentives for domestic production of EVs. Hyundai anticipates the plant will build 300,000 EVs each year as well as manufacture the batteries as part of its collaboration with LG Energy Solution.

“Obviously, to sell closer to where you build helps with the logistics and the port issues, but at the same time, there’s a global capacity challenge that we’re working on,” said Steve Flamand, executive director of product, corporate, IT and digital strategy at Hyundai Canada. “As we’re transitioning from [gas-powered vehicles] to EVs, we need to make sure the production capacity aligns with the market demand. The good news for Canada is we have a free-trade agreement with [South] Korea, so we’ll source from all locations and have flexible sourcing.”

In Los Angeles, Hyundai also showed off the all-new 2024 Santa Fe SUV that comes with a standard hybrid engine. The original Santa Fe was the company’s first SUV in North America more than two decades ago. But this fifth-generation version is nothing like any of its predecessors. It resembles a bold, boxy Land Rover. It’s longer, taller and wider than the outgoing model. It also has a longer wheelbase, three rows of seating for up to seven passengers, and a wider and larger liftgate opening so it’s easier to load and unload items from the cargo area. It’ll come with two powertrain options: a standard 1.6-litre turbocharged hybrid mated to a six-speed automatic transmission, which will produce 232 horsepower and 271 lb-ft of torque, and a 2.5-litre turbocharged gas engine mated to an eight-speed dual-clutch transmission with 277 horsepower and 311 lb-ft of torque. Gone for 2024 is the plug-in hybrid option in the last generation.

“There’s a much bigger appetite in the Canadian market versus the U.S. for the Santa Fe plug-in, especially in Quebec and B.C. with the incentives … but unfortunately we couldn’t get the U.S. volume to justify the investment,” Flamand said.

Hyundai also showcased a rugged, off-road version of the Santa Fe, called the XRT. Visually, the XRT adds dark chrome and black trim elements and cladding on the exterior, including black roof rails with cross bars, 30-inch all-terrain tires, and a higher ground clearance. When properly equipped with the towing package, it can tow 4,500 pounds. The hybrid SUV can tow 2,000 pounds and the gas version 3,500.

The 2024 Santa Fe 2.5T model goes on sale in March, 2024, with the hybrid following later in the spring. That’s when the 2025 Hyundai Ioniq 5 N will also be available. No word yet on pricing for either model.

The writer was a guest of the automaker. Content was not subject to approval.