Hyundai’s EV Growth Surges in 2025, But Challenges Loom Ahead

Hyundai’s EV Sales Keep Rising

Hyundai ended 2025 with another year of strong EV sales growth, defying the broader slowdown in U.S. electric-vehicle adoption. The Ioniq 5 crossover led the charge, while the newly introduced Ioniq 9 three-row SUV added fresh momentum to the automaker’s lineup.

The Ioniq 5 moved 47,039 units in 2025, up from 44,400 in 2024, setting a new annual record for the model. Meanwhile, the Ioniq 9, not available last year, contributed 5,189 sales. Combined with the Kona Electric and Hyundai’s hybrids, the company claims an all-time high for U.S. electrified vehicle sales, with EVs up 7% year-over-year and hybrids increasing 36%, accounting for roughly one-third of total sales.

Ioniq 6 and Sedan Challenges

While SUVs drove growth, Hyundai’s Ioniq 6 sedan continued to struggle amid declining U.S. interest in sedans. The model sold 10,478 units in 2025, down from 12,264 in 2024. It remains unclear whether the facelifted version will reach U.S. showrooms, though the high-performance Ioniq 6 N is expected in limited quantities.

This contrast underscores a key insight: SUVs and crossovers dominate the market, and sedans are increasingly marginalized, even with compelling EV technology.

Impact of Ending Federal EV Incentives

The end of the $7,500 federal EV tax credit in late 2025 impacted Hyundai’s fourth-quarter numbers. Ioniq 5 sales in Q4 fell 58% year-over-year, demonstrating how heavily buyers had relied on incentives. Hyundai responded quickly with aggressive price cuts, making the Ioniq 5 one of the most competitive new EVs in the U.S. market.

Meanwhile, Hyundai’s fuel-cell Nexo saw modest activity, with just five units sold for the year, highlighting that hydrogen remains a niche segment.

Kia’s EV Performance

Hyundai’s sister brand Kia experienced a different trajectory. The EV6 sold 12,933 units, down 40% from 2024, and the EV9 three-row SUV declined to 15,051 units from 22,017. Like Hyundai, Kia faced significant headwinds following the tax credit expiration.

Despite EV setbacks, Kia achieved overall growth. Its hybrid lineup helped electrified sales increase 24%, and total U.S. sales rose 7% year-over-year. This illustrates that hybrid vehicles remain a crucial tool for maintaining electrified mobility while EV adoption adjusts to policy changes.

Looking Ahead: Maintaining Momentum

The key question for Hyundai and Kia is how to sustain EV momentum without federal incentives. Smaller, more affordable crossovers may hold the answer. Hyundai’s Ioniq 3 and Kia’s EV3 could expand accessibility for U.S. buyers, leveraging technology shared with larger siblings while targeting a lower price point.

State-side production could further strengthen competitiveness. Currently, Hyundai builds the Ioniq 5 and Ioniq 9, while Kia produces the EV6 and EV9 domestically. Local manufacturing could mitigate tariffs and allow faster adjustments to price or incentives.

However, release dates for the EV3 and Ioniq 3 remain limited, leaving buyers seeking affordable options in a holding pattern. The next year will be critical for Hyundai Motor Group as it navigates policy shifts, competitive pressures, and consumer demand.

Conclusion

Hyundai ended 2025 with record-setting EV and hybrid sales, buoyed by SUVs and a strategic price response to expiring incentives. Yet challenges remain, from declining sedan interest to maintaining U.S. EV market share without federal support. Success in 2026 will likely hinge on introducing smaller, affordable EVs and leveraging domestic production to stay competitive.

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