Hyundai, Tesla cut prices as EV competition heats up in US

Hyundai Motor and Tesla have both cut prices on their EVs in the US, intensifying competition in the market.

Hyundai slashed up to US$9,800 off the 2026 Ioniq 5 and is offering a US$7,500 rebate on the 2025 model.

Tesla launched new standard trims for its Model 3 sedan and Model Y SUV on October 7, reducing starting prices by about US$5,500 and US$5,000, respectively.

The new Tesla trims come with smaller batteries, reduced driving range, cloth seats, and more basic features.

Hyundai’s Ioniq 5 now starts at US$36,600, undercutting the new Model Y Standard by about US$3,390.

The Kia EV6, previously cheaper than the Model Y, now costs more than Tesla’s new base SUV.

🔗 Source: The Korea Herald

🧠 Food for thought

Implications, context, and why it matters.

EV buyers face a looming residual-value squeeze as price wars intensify

Tesla cut the Model Y by $5,000 and the Model 3 by $5,500 while Hyundai offers up to $9,800 off the 2026 Ioniq 5. These cuts push down used EV prices and pressure lenders, fleets, and dealers.
Wholesale EVs at dealer-to-dealer auctions rose faster than non-EVs in September 2025, with prices up 6.4% year over year and 0.8% month over month, helped by expiring federal tax credits 1.
Rapid new-vehicle price drops compress used values, straining lease residuals (the forecasted value of a vehicle at lease end) and fleet remarketing (resale) assumptions. That opens chances for third-party residual analytics firms (which forecast future resale values) and remarketing platforms (marketplaces that sell used vehicles to dealers or consumers) to price then move distressed EV inventory faster than traditional channels.

Tesla’s stripped-down models reset EV expectations, pressuring legacy automakers’ margins

Tesla set the Model 3 at $36,990 by cutting battery capacity 10% and using cloth seats. It removed ventilated seating and switched to manual wheel and mirror controls.
Hyundai and Kia face a cheaper Tesla Model Y Standard at $39,990 while the EV6 lists at $42,900, which pushes discounts that squeeze margins. Automotive suppliers and tier-one manufacturers (parts suppliers that sell directly to automakers) see waning demand for premium interiors.