IRA Effects
Over 650,000 electric vehicles (EVs) were sold in the United States in the first half of this year, representing an increase of over 50% compared to the same period last year. However, the market share of Korean automakers is retreating.
The Korea Automobile & Mobility Industry Association (KAMA) announced on July 23 that the U.S. EV market grew by 54.8% in the first half of this year compared to the same period last year. The proportion of EVs among all passenger cars also increased by 2.4 percentage points to 8.6%.
KAMA explained this growth, saying, “With the stabilization of the auto supply chain and recovery in production, uncertainties have been reduced as the inflation reduction law (IRA) regulations have been confirmed.” The price cut competition triggered by Tesla earlier this year and the aggressive introduction of new models by each company also drove growth.
Leading the way were American companies like Tesla, Stellantis (a joint venture with Europe), General Motors, and Ford. Thanks to the benefits of the Inflation Reduction Act, which supports locally assembled and produced electric vehicles, they sold a total of around 466,000 units. This is a whopping 60.7% increase compared to the same period last year. Their market share also increased from 68.5% to 71.2%.
European brands, having significantly expanded their new lineups, also grew by 69.1% compared to the same period last year. Their market share increased by 1.3 percentage points to 15.4%. The expansion of U.S. production by companies such as Germany’s Mercedes-Benz and Volkswagen had a positive impact.
Japanese companies, as late entrants, saw a 40.2% increase in sales due to the competitive release of new models, but their market share fell from 6.8% to 6.1% due to the advancement of American and European companies.
Korean companies sold about 46,000 units, an increase of 5.9% compared to the same period. However, the market share fell from 10.5% to 7.2%. A KAMA official explained, “The growth rate slowed down after the enforcement of the IRA law and the discontinuation of incentives, but the support conditions for corporate vehicles were confirmed last January, resulting in a resilient performance.” Hyundai Motor Group, which produces most of its electric vehicles domestically, does not receive tax deduction benefits from the IRA.