End of EV tax credit hurts Hyundai and Kia in October 2025

Tax break’s end caused big sales drop in October

Yes, the end of the full federal electric vehicle tax credit badly hurt Hyundai and Kia sales in October 2025. Sales for their electric models fell sharply across the United States market. Buyers rushed to purchase cars in September, pulling sales forward before the deadline.

This left very few customers to buy in October. The popular Hyundai Ioniq 5 and the Kia EV6 saw their monthly sales figures drop by more than 60%. This confirms the significant financial impact of the ample incentive on both brands’ sales success.

Hyundai Ioniq 5 sales fell sharply

Following the end of the tax credit, the Hyundai Ioniq 5 experienced a significant decline in sales. In October 2025, Hyundai sold only 1,642 Ioniq 5 units. This low number is a substantial 63% drop compared to October 2024, when they sold 4,498 cars.

The sales decline from September 2025 was even more extreme. Sales dropped by 80% from the 8,408 Ioniq 5 cars sold in the prior month. This data shows how many buyers made their purchase decisions based on receiving significant savings.

Kia’s electric model decline was steeper

The sales slump for Kia’s electric models was even steeper than that of Hyundai. The stylish Kia EV6, a popular electric crossover, experienced a sharp 71% decline in sales in October 2025 compared to the same month in the previous year. Only 508 EV6 cars were sold that month.

Even the new, large Kia EV9 electric SUV saw its sales slow down considerably. It sold 666 units, a 66% decline from October 2024. This performance gap suggests the Kia brand may have relied even more heavily on the powerful purchasing incentive than its corporate partner.

Other Hyundai and Kia EVs saw low sales

The sales problems affected all electric cars from both brands, not just the flagship models. For instance, Hyundai’s Ioniq 6 electric sedan sold only 398 units in October, representing a 52% decline from the previous year’s sales figures.

Furthermore, the newest three-row electric model, the Hyundai Ioniq 9 SUV, sold just 317 units. This was much lower than the 1,075 units it sold in the previous month of September. This broad decline in sales demonstrates that the federal incentive was essential to the success of the entire electric vehicle lineup.

Tax credit required North American parts

The precise rules of the full federal tax credit caused the sales drop. The credit had two main rules about where the cars were made. First, the car’s final assembly had to happen in North America.

Second, a high percentage of the battery parts had to be sourced from North America. Hyundai and Kia’s electric cars are primarily built in South Korea, making it unlikely for them to meet the strict sourcing and assembly requirements after the September deadline.

Hybrids grew while EVs slowed down

While fully electric car sales declined sharply, hybrid car sales increased significantly for both companies. Hyundai’s total hybrid sales increased by 41% in October 2025 compared to the same month last year.

Kia also saw significant growth across its electrified group, which mainly comprises their hybrid models. This suggests that customers are still interested in efficient cars, but without the ample incentive, many chose a lower-cost hybrid vehicle instead of a fully electric car.

Leasing became key for retaining incentive

Since the federal tax credit expired for direct purchases, leasing instantly became the primary strategy for both brands. After the Sept. 30 credit sunset, automakers leaned on cash and finance incentives. Hyundai offered sizable cash support on certain models, while attempts by some rivals to extend lease credits were short-lived.

The car company is considered the original purchaser and is entitled to claim the credit. However, this shift did not compensate for the significant loss of retail sales. This shows that many customers prefer the simplicity and ownership of a direct purchase tax benefit.

Hyundai countered the loss with price cuts

Hyundai immediately launched an aggressive new pricing strategy to counter the sudden loss of the federal credit. The company cut prices on certain trims of the 2026 Ioniq 5 by up to $9,800 in savings. This saving for buyers was actually larger than the original government incentive.

The company offered a significant cash incentive for the remaining 2025 Ioniq 5 models throughout October. This heavy use of company-paid financial incentives demonstrated the electric vehicle market’s reliance on substantial price reductions.

Faster charging tech comes in 2025 models

Hyundai introduced key upgrades to its popular models on the technology front to increase their value and appeal. The 2025 Hyundai Ioniq 5 received a significant technical upgrade to its battery pack, which now has a capacity of 84.0 kilowatt-hours.

This helps increase the driving range. More significantly, the 2025 vehicles adopted the North American Charging Standard (NACS) port. This change means owners can use the Tesla Supercharger network without a separate adapter.

Kia EV6 production moved to North America

Kia took a bold step to regain the full incentive’s power in the United States market. The company announced that the popular 2025 Kia EV6 will be assembled at its West Point, Georgia, manufacturing plant starting in early 2025.

This decision to build the EV6 in the United States is meant to make it eligible again for the full federal credit when purchased. This move aims to restore the incentive fully, a crucial tool for competing fairly in the electric vehicle segment.

Hyundai is building Ioniq 5 in Georgia

Matching its sister company, Hyundai is also expanding its plan to build electric cars in the United States. The 2025 Hyundai Ioniq 5 will be the first vehicle produced at the new Metaplant America factory in Bryan County, Georgia.

This factory is a massive investment, valued at more than $ 7.59 billion. Production is scheduled to begin in Q4 2025 at Hyundai Motor Group’s Metaplant America.

The U.S. assembly improves availability and cost control; the federal purchase credit, applied earlier in 2025, is no longer available after September 30, 2025.

Want to see how these electric crossovers stack up in real life? Check out Hyundai Ioniq 5 vs. Kia EV6: crossover analysis.

Future production centers on U S investments

Both companies have firmly tied their future electric vehicle strategy to local U.S. production. Hyundai Motor Group announced plans to increase its total investment in the United States to 26 billion between 2025 and 2028. This includes building a 5 billion dollar battery cell plant with a partner company in Georgia.

These enormous investments ensure that all new electric models, such as the upcoming Hyundai Ioniq 9 three-row SUV, will be manufactured in the U.S. This is a straightforward strategy to maintain the purchasing power of the federal incentive.

Ever wonder why an NBA legend chose a luxury sedan from Kia? Find out why LeBron James rolls in a Kia K900.

Will this slow down their electric momentum? Please tell us what you think.

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This slideshow was made with AI assistance and human editing.