Hyundai Motor's EV ambitions plagued by parts shortage, union opposition

Hyundai Motor Co.'s ambitious plan of catching up with Tesla in electric vehicles could fizzle out this year due to delayed production, drying-up state subsidies, and a labor union's opposition to its massive investment in the US.

The South Korean automaker has received about 43,000 preorders for the Ioniq 5 since Feb. 25 but just 114 units were delivered in the first month of its domestic launch in April.

Hyundai planned to build 10,000 units last month but rolled out only 2,600 units as production at its Ulsan line was suspended for a week in early April due to a lack of traction motors.

The parts supply compounded Hyundai's woes as it was forced to halt production earlier this year due to the global semiconductor shortage.

To reduce the waiting time, Hyundai is offering units at a price discount that are without some advanced features like a parking assist or a rear-seat reminder system. It was also considering other options to retain customers who had placed orders.

A Hyundai Motor spokesperson said they cannot predict the delivery period for the Ioniq 5 at this point due to uncertainty over the parts supply.

The slower-than-expected EV rollout also raised concerns that Hyundai may not be eligible for central and provincial governments' subsidies allocated for this year.

The central government provides an 8 million won subsidy for each buyer while provincial governments allocate as much as 11 million won.