Hyundai gives the Ioniq 5 a huge price cut for model-year 2026

The Korean automaker's price cut comes in as the clean vehicle tax credit dies.

See full article...

 

[itfa]

Nice. It's good to see good options that people can choose instead of a fadcistmobile.

 

[ConnertheCat]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

Probably some. I actually helped my mom pickup a Rav4 PHEV last week and she got $7000 in ev credits on it ($500 was from NYS). Pricing out the difference between the PHEV and the regular Hybrid gets you about a $8-$9k difference (model to model)… so; if you dropped that full $7k off the purchase price it would mean that it was only ~$1-2k more? That can't be right either (the bill of materials would easily be above that), so clearly it was doing something.

 

[siliconaddict]

I fully expect this to be supplemented by ads, somewhere.

 

[ConnertheCat]

This kind of pisses me off.

The tax credit was a deduction that helped ONLY if you made enough money to have paid that or more in taxes. For poorer folks, it was bullshit that didn't provide the same financial benefit.

NOW they cut the prices? THAT would benefit both the wealthier folks and the poorer folks equally, since the overall initial price is lower and there's no "you have to make more money to get the same benefit from the rebate" bullshit involved.

If they'd have done this from the beginning, then they'd probably have sold more cars.

It will certainly reduce the depreciation drop EVs were seeing; as you'd always compare to MSRP when everyone was getting a flat cost off of it.

 

[Eurynom0s]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

Last year I was told by a Hyundai dealer that Hyundai wasn't passing on the $7500 to leases. But for all I know that was the dealer just wanting to pocket the $7500 for itself.

 

[Veritas super omens]

A tax rebate isn't paying anybody. It's a rebate on your taxes, as the name pretty explicitly spells out. And an additional tax on ICE vehicles would never have gotten out of committee, let alone put into law.

It's ludicrous that the same people continuously scream "lower taxes, lower taxes" get very mad when the government gives rebates on those taxes (like the EV credit, or the stimulus checks during COVID).

Lower (my) taxes, (but not everybody else's).

 

[Eurynom0s]

This is not correct, the tax credit could be applied to the dealer and passed on to you as savings on the car at the time of purchase, all that needed done was income verification (which happens anyways as part of the loan process unless you were buying in cash I guess).

I think this was only true with the tweaks to the credit under Biden, and that prior to that the only way to get the full amount without having enough qualifying income was to lease.

 

[Scotttheking]

I wouldn't expect that they have this much margin in the vehicle. I suspect this is to keep production rates up to offset some of the costs associated with the factory that they would have to pay even if the line produced zero cars.

I would expect that they do as a marginal cost. The tax credit was subsidizing the development of platforms and Hyundai is likely taking the approach that they already are or will scale sufficiently more to cover those development costs by the number of vehicles they are selling.

 

[F12]

This kind of pisses me off.

The tax credit was a deduction that helped ONLY if you made enough money to have paid that or more in taxes. For poorer folks, it was bullshit that didn't provide the same financial benefit.

NOW they cut the prices? THAT would benefit both the wealthier folks and the poorer folks equally, since the overall initial price is lower and there's no "you have to make more money to get the same benefit from the rebate" bullshit involved.

If they'd have done this from the beginning, then they'd probably have sold more cars.

Do poor people spend 50k on cars?

 

[noahmayer]

Hyundai is in a fairly good spot for EVs. They have a factory here to avoid the worst tariffs/taxes. They are able to build a lot and are popular. No glaring issues other than the iccu failures.
So they have some wiggle room and don't depend on federal rebates. GM is near this too I think, but not as much. But their EVs are already priced more aggressively.
For those like Ford, it's gonna be tough until their $30k truck comes out. For Stellantis who barely has their EVs out and can't post any profit on them, it's a deathknell. They won't be able to have EVs take off unless they partner with a strong company. Stellantis is fucked in general though.
Still a good time for luxury players to continue though, the rebates never applied to them. Just a matter of making a compelling product.

 

[stormcrash]

Hyundai Kia are really killing it and at the top of their game. They've gone from cheap budget brand to one of the premier EV vendors on top of their very solid ICE cars. Some of the current styling isn't quite to my taste but clearly people like what they're selling inside and out

 

[C-Port]

This is not correct, the tax credit could be applied to the dealer and passed on to you as savings on the car at the time of purchase, all that needed done was income verification (which happens anyways as part of the loan process unless you were buying in cash I guess).

That was a later version of the rebate. Originally you had to claim it on your own taxes later if purchasing. Even the original version could be applied to leases, however.

Depending on each brand’s different costs, they may have long been able to afford just discounting, or only recently reached that point, or may still not be able to discount.

Hyundai has announced a discount, I wonder how many other brand will do the same. Tesla just raised prices, so it’s not exactly cut and dry.

 

[Chmilz]

At the moment these cuts do not appear to be offered in Canada, where they're already rather prohibitively expensive.

 

[stormcrash]

Hyundai is in a fairly good spot for EVs. They have a factory here to avoid the worst tariffs/taxes. They are able to build a lot and are popular. No glaring issues other than the iccu failures.
So they have some wiggle room and don't depend on federal rebates. GM is near this too I think, but not as much. But their EVs are already priced more aggressively.
For those like Ford, it's gonna be tough until their $30k truck comes out. For Stellantis who barely has their EVs out and can't post any profit on them, it's a deathknell. They won't be able to have EVs take off unless they partner with a strong company. Stellantis is fucked in general though.
Still a good time for luxury players to continue though, the rebates never applied to them. Just a matter of making a compelling product.

Yeah, Stellantis has absolutely no strategy for what they're doing with their US brands, have no idea if it's a different story in Europe. They've gutted Chrysler and Dodge while pushing Alfa and Fiat to middling results. I mean seriously why would they drop the grand caravan in favor of only the pacifica? etc.

GM and to a lesser extent Ford have pulled off a tremendous coup of a turnaround in investing in EV and hybrid tech. Fort needs to get a second gen lighting out the door and get an EV crossover in their lineup, but GM other than awaiting the bolt has a pretty comprehensive spread of products to iterate on at this point.

 

[snoopy.369]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

I don't mind this. Likely most but not all of the credit went to the seller; the profit-optimal price probably was a few thousand below the non-subsidized price. If $2k went to the buyer and $5.5k went to the seller, I'm good with that; it encouraged manufacturers to build EVs (which they did!) and made it so the infrastructure was built out, so now we have EVs without needing the subsidy.

I would want another few years of subsidy personally, but if we never get it back I think we still have a well functioning EV environment that will continue moving in a positive direction.

 

[barich]

This is entirely the case. Instead of EV rebates we should have taxed ICE cars. The government shouldn't be paying people to buy cars, and shouldn't be giving handouts to the automobile industry. So much for "market forces."

I agree, in theory, but that would have been a non -starter politically.

 

[mysciencefriend]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

Yeah. The Canadian version of these credits only applied to cars that were below a maximum MSRP, which provided an incentive for car companies to not just absorb the credits in their pricing.

Of course this doesn't stop dealers from adding nonsense fees and such, but it at least controlled the baseline price.

 

[Mental Gear Reduction]

a very reasonable $46,275.

I'm a little unclear on how those words got strung together in a sentence.

 

[PsychoArs]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

I mean maybe, but it may not be as straightforward as that implies.

What I mean is... remember that EV is an emerging market. There's a lot of change, evolution, improvement, and grow-out. "Eating the tax credits" for an Ioniq 5 may mean "having sufficient profitability to keep iterating, investing, and improving the product line." By contrast, if there was something similar for say... an F-150, you know the money would just be buying the C-suite nummies another yacht or two.

I'm okay with the idea that subsidies enable things like the N version of this car.

 

[fellow human]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

Well, yeah. It doesn’t incentivize manufacturers to make more EVs if they don’t get the money. This is expected behaviour.

 

[DoktorFaust]

Oof, there is some confusion here about the Ioniq 5 and the tax credit.

The Ioniq 5 did not qualify for the $7500 tax credit until May 1st, 2025. Until that date Hyundai offered a $7500 incentive (on top of other incentives) whether you bought or leased. This wasn't secret or anything, it was pretty clear what the intent was, and when May 1st rolled around the bottom line prices didn't change for consumers.

And now that tax incentives expired, the bottom line prices still didn't change for consumers. It seems...fine?

 

[astack]

What's especially weird about this is that the 2025 ioniq five was selling for something like 5% over MSRP earlier this year (based on consumer report's data). I just looked and it doesn't seem to be any more, so maybe that was a blip after the OBBB passed. On the other hand, Hyundai gave me precisely zero offers for one in my ZIP code right now, so I guess they're still selling well.

 

[C-Port]

Yeah. The Canadian version of these credits only applied to cars that were below a minimum MSRP, which provided an incentive for car companies to not just absorb the credits in their pricing.

Of course this doesn't stop dealers from adding nonsense fees and such, but it at least controlled the baseline price.

There was a price cap on the US federal rebates also.

 

[astack]

Oof, there is some confusion here about the Ioniq 5 and the tax credit.

The Ioniq 5 did not qualify for the $7500 tax credit until May 1st, 2025. Until that date Hyundai offered a $7500 incentive (on top of other incentives) whether you bought or leased. This wasn't secret or anything, it was pretty clear what the intent was, and when May 1st rolled around the bottom line prices didn't change for consumers.

And now that tax incentives expired, the bottom line prices still didn't change for consumers. It seems...fine?

I can confirm. I bought mine late in 2024 and the dealer told me that the ioniq five did not qualify for the tax credit, but as long as I financed part of the purchase through Hyundai, they gave me a $7,500 "rebate". But the cuts to the price for the higher models now are steeper than $7,500, so they really are cutting the price, just not as much as it first seems.

Also, I suspect dealers won't be willing to go below MSRP as much now.

 

[Faceless Man]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

Well, if they couldn't do that, they probably wouldn't sell the cars in that market. Just like Toyota and the Prius Prime in Australia. The subsidies didn't work out, so they only sold the base, non-Plug-In Prius. Meanwhile in New Zealand, where the subsidies did work out, they sold the Prime for less than the Prius cost in Australia.

Now they don't sell it at all, here, just Hybrid versions of everything else.

But what I really want is for them to cut the price of the Ioniq 6. I don't want a fecking SUV, I want a car, dammit.

 

[android_alpaca]

This is entirely the case. Instead of EV rebates we should have taxed ICE cars. The government shouldn't be paying people to buy cars, and shouldn't be giving handouts to the automobile industry. So much for "market forces."

That's exactly what Norway and Iceland did (added taxes for ICE vehicles), however for better or worse enacting a tax on 97% of new car buyers is politically impossible in the US (and probably for much of world) unless you have a relatively small, heterogenous forward thinking country that trusts its national government... or you are China.

 

[Faceless Man]

Nice. It's good to see good options that people can choose instead of a fadcistmobile.

+1 for what's probably a typo, but is a pretty good descriptor of "That Electric Vehicle Brand".

 

[Deleted member 221201]

I fully expect this to be supplemented by ads, somewhere.

You will now see ad's in the car screen

"EA Sports, You're in The Game"

 

[Hort]

If they can comparably reduce the price of the refreshed '26 Ioniq 6 I may pull the trigger.

 

[fellow human]

Nice. It's good to see good options that people can choose instead of a fadcistmobile.

Careful, I hear antifascistmobiles are terrorists now…

 

[sonicmerlin]

The price of lithium phosphate iron batteries has dropped 75% in the last 3-4 years alone. So a battery that cost $32,000 4 years ago costs $8000 now. That’s where a bunch of savings are coming from.

 

[rochefort]

This is entirely the case. Instead of EV rebates we should have taxed ICE cars. The government shouldn't be paying people to buy cars, and shouldn't be giving handouts to the automobile industry. So much for "market forces."

A carbon tax would make all this simpler and more rational. But I'm not holding my breath for political sanity.

 

[EarendilStar]

Sort of makes me wonder if all the EV makers had just inflated MSRPs to eat the tax credits for themselves all this time.

Now you know why industries love subsidies

Jumping to conclusions are we?
You’ll notice the article states this is ONLY for EVs made in the US. That plant only recently opened (end of 2024 iirc). In fact, Hyundai’s didn’t qualify until that point because they weren’t made in the US.

Finally, the idea they marked it up 7500 ONLY makes sense if they were the only car being sold. But they weren’t. They are competing against everyone else to sell a car! Instead of marking the car up 7500, you could just make your car 7500 less than your competitor and keep your original profit margin.

Those are some knowns, some of the unknowns are:

• It’s a 4 year old car at this point. Have manufacturing prices come down naturally?
• Are all models keeping all the same feature sets? Anecdotally, a Hyundai dealer told me the 2026 I5s were losing features in the base model. We’ll have to see I guess.
• Have the batteries gotten cheaper? I know the cells have, and I know the batteries retail for 20k.

Parting shot: Teslas have dropped even more over the past 5 years. Why is it unusual that a different brand could also find a way to cut costs on rapidly maturing tech? Especially as the underlying platform (E-GMP) has hit more and more models of car.

 

[markgo]

This is entirely the case. Instead of EV rebates we should have taxed ICE cars. The government shouldn't be paying people to buy cars, and shouldn't be giving handouts to the automobile industry. So much for "market forces."

The government subsidizes one form of transit over another all the time. Air travel, most especially, since almost all the cost for airports and air traffic control comes from tax payers.

Ditto trucks over cars, based on the road wear they cause vs. taxes they pay.

There’s massive subsidies to the oil industries, both direct and in the form of low cost leases.


It’s perfectly reasonable for the government to make economic incentives for behavior it wants to encourage. It does it all the time.

 

[EarendilStar]

This is entirely the case. Instead of EV rebates we should have taxed ICE cars. The government shouldn't be paying people to buy cars, and shouldn't be giving handouts to the automobile industry. So much for "market forces."

I’m not sure an equally large tax would have increased adoption as much, and certainly would have caused more anger. ICE still had more options and were cheaper. A tax would have fallen disproportionately on the poor (there isn’t a good way to do a manufacturer tax or carbon tax that targets demographics).
Also, the human brain loves a deal. Tell someone they are getting something for less, and they are more likely to buy, even if the competition still costs the same amount more/less.

 

[iollmann]

It is almost as if — call us all stunned with surprise — the automakers saw that $7500 tax credit and thought it was…

for them?

Now who could be so silly and see a big pile of money and mistakenly conclude it was for them? Certainly not customers.

 

[Stickmansam]

Same happened in Australia, my state announced a $3k tax credit, BYD immediately increased the price $3k.

It’s simple economics, seller will pick a price that maximises profit, not volume sold. Particularly when production has to be designed years in advance, it’s more beneficial to increase the price than constantly be short of stock and making low margins.

I would rather say it depends on supply and demand how competitive the market is, and how much units need to sell.

Canada for instance lost the federal rebate, and my province of BC has killed the local rebate as well. Quebec has cut their reabte amount as well.

But despite that, there have been no significant price reductions and most 2026 models are expensive than the 2025 models. There are some manufacturer incentives which offset the loss of the rebate, but mostly only partially.

Part of the reason was that for many rebates, there was a cap on price and eventually a cap on income to qualify for some of the rebates. So prices could never increase as much to take advantage of the rebate being offered.

 

[eukiwi]

Someone has to buy new.

You'll get downvoted, but it's true.

 

[Rick06]

Out of curiosity. Is it true that in the US dealers can sell cars above MRSP? How often does it happen?

 

[Mental Gear Reduction]

Out of curiosity. Is it true that in the US dealers can sell cars above MRSP? How often does it happen?

They can sell cars for any amount they can get. I'm pretty sure that car manufacturers are not legally allowed to constrain their pricing, in fact. They can publish their recommended retail, but dealers can price anywhere they want. (edit: this was done very deliberately to prevent car manufacturers from being able to control pricing.)

When demand exceeds supply, they crank prices up seriously, but then also discount heavily when demand is low. During the big Toyota unintended acceleration scare ten or fifteen years ago, for instance, I was able to get a used Toyota from a dealer really cheap, way under expected price.