New technology requires new sales models.
The 2022 Hyundai Ioniq 5 represents new ground for the South Korean automaker. Along with its corporate cousin, the Kia EV6, these all-electric models are designed to appeal to younger, more technology-friendly and environmentally aware buyers with a decent amount of disposable income. They could probably afford to buy something more expensive than the Ioniq 5's estimated $45,000 starting price, which doesn't factor in state and federal tax credits, but they want an EV that speaks to them according to their values and needs. But there's another key element they want: flexibility.
What if, for whatever reason(s), the Ioniq 5 isn't for them and they're now stuck making monthly finance or lease payments. What if they're still a bit unsure about driving an EV in general? That's where the subscription sales model comes into play.
Automotive News was told by Hyundai North America's VP of product planning and mobility strategy, Olabisi Boyle, that "when you try before you buy and you find it can work for you in your everyday life, you tend to now want to move toward potentially owning." Hyundai expects a majority of subscription customers will "transition from try to buy."
Boyle says that Hyundai is well aware that many consumers still have range anxiety and a general fear about trying out something new. That's just fine because the Ioniq 5 is expected to pass those tests with flying colors thanks to the base model's 300 miles of range and features like the vehicle-to-load (V2L) that enables the car's main battery to serve as a backup generator for other appliances.
The Ioniq 5's 800-volt ultra-fast charging will also be appreciated. Rivals like the VW ID.4 and Ford Mustang Mach-E don't have either feature. Some buyers will be attracted to the Ioniq 5 over the benchmark Tesla Model Y that carries a higher base price and no longer qualifies for the $7,500 federal tax credit.
What Tesla also doesn't currently have is a subscription sales model, though it has begun offering a $9.99 monthly subscription to its Premium Connectivity software features. Without a try-before-you-buy model, Tesla could lose some sales to Hyundai. And compared to other Asian brands like Toyota and Honda, the Hyundai Motor Group as a whole is far ahead in the EV game, not to mention alternative sales methods.