Hyundai Motor Company is set to launch its compact electric sport utility vehicle (SUV), the Ioniq 3, in the European market this month. This strategic model aims to expand Hyundai’s foothold in Europe’s electric vehicle (EV) market, targeting 20,000 unit sales this year.
After facing challenges from Chinese EV makers’ low-price offensive in Europe during the first half of this year, all eyes are on whether Hyundai can boost its market share with the Ioniq 3.
B-Segment EV Market: A Strategic Gambit
Industry sources report that Hyundai will begin selling the Ioniq 3 in key European countries this month. The Izmit plant in Turkey ramped up production in mid-August to support this launch.
The Ioniq 3 represents Hyundai’s strengthened local strategy for the European market, from production to sales. The automaker invested 250 million EUR (about 289 million USD) in the Izmit facility to build EV-specific production infrastructure, including a dedicated body line and high-voltage battery integration system. Hyundai Motor Group Chairman Chung Euisun personally inspected the production setup in late July.
With the Ioniq 3, Hyundai is targeting the fiercely competitive B-segment (subcompact) market in Europe. This segment, along with the C-segment (compact), is crucial, accounting for about 15% of total European auto demand. As electrification accelerates, EV share in this segment is expected to grow rapidly.
Hyundai has set ambitious sales targets for the Ioniq 3: 20,000 units by year-end and over 40,000 annually from next year. This model is key to Hyundai’s goal of selling more than 420,000 EVs by 2030, a significant jump from last year’s 116,000 units.
The Ioniq 3 is Hyundai’s first European model to feature the next-gen Pleos Connect infotainment system. This software-defined vehicle (SDV) platform offers over-the-air updates and the Gleo artificial intelligence (AI) assistant.
Countering Chinese Rivals With Price Competitiveness
Industry watchers are keen to see if the Ioniq 3 can help Hyundai regain momentum in Europe, where it has struggled against Chinese EV makers’ aggressive expansion.
European Automobile Manufacturers Association (ACEA) data shows Hyundai’s European sales dropped 8.7% to 243,828 units in the first half of this year.
In contrast, Chinese automakers saw significant growth: Geely up 8.5%, SAIC up 18.0%, BYD up 145.5%, and Chery up 305.8%. Geely’s first-half sales of 225,350 units nearly matched Hyundai’s figures.
Hyundai aims to boost the Ioniq 3’s price competitiveness through local production in Turkey, leveraging the European Union (EU)-Turkey customs union for tariff benefits. The company will source batteries from Samsung SDI’s Hungarian plant.
In contrast, the EU imposes tariffs up to 45.3% on Chinese EVs. While Chinese makers are pursuing localization, exports still dominate their European strategy.
Tech Times noted that while Chinese-assembled models face up to 45% tariffs, Hyundai’s Turkish-made vehicles avoid this, enabling sub-25,000 GBP (about 33,700 USD) pricing for the Ioniq 3.
The Ioniq 3 starts at 22,245 GBP (about 30,000 USD)) in the UK and 27,995 EUR (about 32,500 USD) in the Netherlands. It will compete with the BYD Atto 2, Renault 4, and Volkswagen ID.4, priced at 34,490 EUR (about 40,000 USD), 29,990 EUR (about 34,800 USD), and 27,990 EUR (about 32,500 USD) respectively, according to Daol Investment & Securities.
Analyst Yoo Ji-woong of Daol Investment & Securities predicts strong initial demand for the Ioniq 3, citing its competitive hardware at the starting price. He expects sales to surpass Hyundai’s 20,000-unit target for this year.