The 2023 Hyundai Ioniq 5 Faces An Unexpected Uphill Battle

The 2022 Hyundai Ioniq 5 is the World Car of the Year. The electric SUV model impressed millions of automotive enthusiasts and experts alike internationally. It sold well in America, but the new model year will face an unforeseen challenge. The 2023 Ioniq 5 should be even better than the 2022 model year. So, why is it unlikely to outsell its previous iteration?

The 2023 Hyundai Ioniq 5 faces a new challenge

A 2023 Hyundai Ioniq 5 electric SUV model with a glaring stream of sunlight in the background
2023 Hyundai Ioniq 5 | Hyundai

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It’s safe to say that the Hyundai Ioniq 5 is a hit. The South Korean electric SUV model didn’t win World Car of the Year for nothin’. It’s affordable, practical, and it comes loaded with great features.

The Ioniq 5 is considered the best electric vehicle on the market because of its design, range, and the value it provides for the money. The 2022 model year benefitted from the federal electric vehicle tax incentive. The 2023 model year may not be applicable thanks to the Inflation Reduction Act of 2022.

The Inflation Reduction Act of 2022 is an act that includes a revised federal electric vehicle tax incentive. The new incentive is designed to reward American-made vehicle purchases. Vehicles must fit a special criteria to qualify for the full tax credit. The incentive is great for American electric vehicles like the Ford Mustang Mach-E and Tesla Model Y. It doesn’t bode well for EVs like the Hyundai Ioniq 5.

The South Korean electric SUV is assembled in South Korea and Indonesia. This disqualifies it from eligibility for the new incentive. So instead of starting below $35,000 after the tax credit like the 2022 model year, it’s likely to start closer to $42,000.

How much will the 2023 Hyundai Ioniq 5 cost?

A gray Hyundai Ioniq 5 electric SUV is charging.
The Hyundai Ioniq 5 | Hyundai

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The 2022 Hyundai Ioniq 5 starts at $39,950. After the EV tax credit, its price is closer to $32,450. It’s incredibly affordable compared to many of its rivals.

Car and Driver estimates that the 2023 Hyundai Ioniq 5 will start at $42K for the base model SE trim. The automotive publication expects the SEL to start around $48,000 and the Limited to start at around $53,000. This means that the most affordable 2023 Hyundai Ioniq 5 could potentially cost $42,000. Toss in taxes and a destination fee, and suddenly, the popular electric SUV isn’t so affordable.

While $42K is still reasonable, it’s a huge jump from $32,450. The price difference of over $9,000 could be enough to deter potential buyers.

Should you buy a 2023 Hyundai Ioniq 5?

A blue 2023 Hyundai Ioniq 5 electric SUV is parked.
The 2023 Hyundai Ioniq 5 | Hyundai

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Even if the 2023 Hyundai Ioniq 5 turns out to be significantly more expensive than the previous model year because of tax credit eligibility, it’s still a great electric SUV. The Ioniq 5 competes with the best in its segment, and the 2023 model year could include some important upgrades.

The 2022 Hyundai Ioniq 5 has 220 miles of standard range. It wouldn’t be a surprise if Hyundai bumped up the 2023 model year’s range a few miles to justify a price increase. Cars.com praises its comfy ride, acceleration, and great tech.

The Ioniq 5 is still a great buy, but the upper trim levels seem further and further away. The Limited final trim level provides plenty of amazing standard features, but are consumers willing to pay over $50K for it?

Read more about the Hyundai Ioniq 5 in the next article below.

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