Hyundai and Kia have significantly reduced prices on their electric vehicles (EVs) in South Korea, responding to aggressive price cuts from competitors like Tesla and BYD. This strategic move aims to maintain their market share in a rapidly evolving automotive landscape. Discounts have been introduced on models including the IONIQ 5, IONIQ 6, EV3, and EV5, with price reductions reaching as high as 3 million won (approximately $2,000).
Following Kia’s recent price adjustments, which lowered costs on several EV models by up to 3 million won, Hyundai announced its own pricing strategy. The automaker stated that it would also “significantly lower the interest rate” on its most popular electric vehicles. This includes the IONIQ 5, IONIQ 6, and Kona Electric, with potential savings for buyers reaching up to 6 million won (around $4,100) through various promotions such as monthly deals and trade-in offers.
A notable aspect of Hyundai’s new incentives includes cutting interest rates on the IONIQ 5, IONIQ 6, and Kona Electric from 5.4% to just 2.8%. The promotion features a 36-month installment plan that allows buyers to defer payments until the end of the term, at which point they can settle the balance based on the vehicle’s residual value. For instance, the IONIQ 5 Standard Range model can be financed for 310,000 won (approximately $21450,000 won (around $35) compared to previous pricing.
When factoring in all discounts, customers can save up to 5.5 million won (about $3,800) on the IONIQ 5, 6.5 million won (around $4,500) on the IONIQ 6, and 6.1 million won (approximately $4,200) on the Kona Electric.
Kia’s price cuts follow a similar pattern, reducing prices on selected models by up to 3 million won and offering an “ultra-low interest rate installment plan” with 0% interest. This competitive pricing comes as a direct reaction to recent reductions made by Tesla and other industry rivals.
The electric vehicle market in South Korea is becoming increasingly competitive, particularly as new entrants like BYD launch models such as the Dolphin hatchback, which will be available starting next month at approximately 24.5 million won (around $17,000). This vehicle will compete with Hyundai’s Casper Electric and Kia EV3, priced at approximately 27.4 million won (about $19,000) and 40 million won (around $27,700), respectively, after incentives.
Tesla has also made significant pricing maneuvers, slashing prices on the Model Y by up to 9.4 million won (approximately $6,400) in December. The starting price for the Model Y now stands at 49.99 million won (around $34,000), while the Long Range variant begins at 59.99 million won (approximately $40,900), delivering a range of 505 km (about 313 miles).
The Hyundai IONIQ 5 starts at 47.4 million won (about $32,700) before discounts, while the EV5 Long Range, with a maximum range of 460 km (approximately 285 miles), has seen a price reduction of 2.8 million won (around $1,900) and now starts at 45.75 million won (approximately $31,200).
As part of its strategy to enhance competitiveness in global markets, Hyundai is set to introduce more affordable models like the IONIQ 3. This model is expected to commence at around 30 million won (approximately $20,800) in South Korea, with European prices projected between €29,000 and €33,000 (around $35,000-$39,000). However, it is unlikely that the IONIQ 3 will reach the US market due to current tariffs imposed by the Trump administration on imports.
Hyundai plans to manufacture the entry-level IONIQ 3 at its facility in Turkey for distribution primarily in Europe. Despite the absence of the IONIQ 3 in the United States, the Hyundai IONIQ 5 was the fifth-best-selling electric vehicle in the country last year, in part due to its competitive pricing. In 2026, the IONIQ 5 is expected to start at $35,000, while leasing options for 2025 models are available from approximately $189 per month, a highly competitive rate in today’s market.
According to Kelley Blue Book’s 2026 Best Buy Awards, the 2026 Hyundai IONIQ 5 has been recognized as the best overall electric vehicle available in the US. Following recent price cuts of up to $9,800, the IONIQ 5 is now noted to be “among the most competitive in terms of EV pricing,” highlighting Hyundai’s commitment to remain a key player in the electric vehicle sector.
