GM seeks to introduce hybrids for three flagship SUVs… $500 million in subsidies for electric vehicle production also shifted, Hyundai Motor Company and Kia hybrid sales increased by 53%... Head-on competition expected in the large SUV market
General Motors (GM), the largest automobile company in the United States, is pursuing the introduction of hybrids in its flagship sports utility vehicles (SUVs). As GM, which had focused on electric vehicles, revises its product strategy, competition with Hyundai and Kia in the U.S. large SUV market is expected to intensify.
Hyundai Motor Company and Kia Motors are dominating the market by significantly increasing hybrid sales in the United States this year. The car models for which GM is promoting the introduction of new hybrids are models that directly compete with the Palisade and Telluride.
#### GM promotes three flagship SUV hybrids… Revise electric vehicle strategy
Citing multiple officials, Reuters reported on the 27th (local time) that GM is pursuing a plan to produce hybrid models of the Chevrolet Traverse, Buick Enclave, and GMC Acadia at its Lansing, Michigan plant. The three models are three-row SUVs that share a platform, and are GM's flagship models in the U.S. market.
After the Reuters report, GM confirmed investment plans to prepare its Lansing Delta Township plant for hybrid production. GM, which has focused on electric vehicles, is moving in the direction of expanding the power source of its flagship SUVs to include hybrids.
Investment plans are also changing. The U.S. Department of Energy is changing the $500 million originally allocated to support GM's transition to electric vehicle production to support hybrid production at the Lansing plant. GM reflected costs of $3.6 billion related to adjusting its electric vehicle strategy between January and September of this year.
GM CEO Mary Barra said in the third quarter earnings announcement on the 20th, "We will introduce hybrid models to the major car classes we participate in." Separately from existing investments in electric vehicles, the company plans to add hybrids to its main product line.
GM's U.S. market share from January to September this year was 16.4%, down 0.7 percentage points from 17.1% in the same period last year. While Toyota and Honda, with their hybrid models, were expanding their presence in the U.S. market, GM was unable to secure enough related models.
In the United States, demand for hybrids is increasing due to high gasoline prices. In August, the proportion of hybrids in new car retail sales was 19%, up from about 16% before the Iran war. GM dealerships continued to point out the lack of hybrid models.
The vehicles for which GM is pursuing hybrid introduction first are all large SUVs with large bodies and high demand for long-distance driving. By adding a hybrid to the existing gasoline model, it is possible to target consumers who value fuel efficiency.
#### Hyundai Motors and Kia, hybrid sales increase by 53%... GM catch-up notice
Hyundai and Kia introduced hybrid models into the U.S. large SUV market ahead of GM. In the third quarter of this year, US sales of both companies amounted to 506,200 units, an increase of 5.4% compared to the same period last year. Among these, hybrids increased by 53.4% to 138,112 units, accounting for 27.3% of total sales. On the other hand, electric vehicle sales decreased by 51% to 22,311 units.
Sales of large SUVs also increased. Last September, Palisade increased by 52.1% to 10,327 units compared to the same month last year, and Telluride increased by 41.9% to 11,927 units. Both models compete in the same family SUV market as the vehicles GM is pursuing to introduce hybrids.
In line with the increase in sales, local production is also being expanded. Hyundai Motor Company is strengthening hybrid production centered on its Alabama plant and Georgia Metaplant, while Kia is producing the Telluride Hybrid at its Georgia plant.
The 2027 Palisade Hybrid is sold in the U.S. starting at $44,560, and the combined fuel economy of the front-wheel drive basic trim is 34 miles per gallon. The Telluride Hybrid has a starting price of $46,490, a combined fuel efficiency of 35 miles, and a maximum output of 329 horsepower.
Hyundai Motor Company plans to increase the number of hybrid vehicles in North America to more than 10 by 2030 and increase their share of total sales to 50%.
The Traverse, Enclave, and Acadia, to which GM plans to add hybrids, are models entering markets where Hyundai Motor Company and Kia Motors have already secured a sales base. Although GM's new vehicle launch schedule has not yet been revealed, competition over price and fuel efficiency is expected to intensify in the U.S. large SUV market.
