Hyundai's bright profit view clouded by U.S. EV concerns
Hyundai Motor Co raised earnings guidance on Monday, buoyed by premium vehicle sales and a foreign exchange lift, but disappointing quarterly results and an uncertain U.S. electric vehicle (EV) sales outlook sent its shares down 3%.
South Korea's Hyundai and its affiliate Kia Motors , which make the popular Ioniq 5 and EV6 electric cars, had reported a strong EV performance in the United States until July, doubling last year's sales and blowing past Ford Motor Co, Volkswagen AG and General Motors Co .
But momentum has since stalled. Sales of the Ioniq 5 crossover SUV in the United States slumped around 14% in September from the previous month, hit by a new U.S. law that ended federal tax credits for buying vehicles made by some foreign automakers, including Hyundai.
Hyundai said it was considering various options to minimise the legislation's impact, including establishing a joint venture to source key battery parts in order to qualify for the new U.S. EV tax credits of up to $7,500.
Analysts said Hyundai's response to the issue remained vague.
"The impact of the Inflation Reduction Act on Hyundai's EV sales in the U.S. market seems inevitable as EV incentives are the key factor to U.S. EV shoppers," Lee Jae-il, an analyst at Eugene Investment & Securities.
In a mixed outlook, Hyundai raised on Monday its full-year revenue growth forecast range by six percentage points to 19-20% from its previous estimate in January. Operating profit margin is now estimated at between 6.5-7.5%, up from 5.5-6.5% previously.
But the company slashed its 2022 vehicle sales forecast by 7% to 4.01 million, as the auto industry struggles with supply chain disruptions involving chips and other components. Hyundai sold 3.89 million
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