Hyundai's EV effort similar to Toyota's ‘Prius family' venture

LOS ANGELES — Hyundai Motor Co. is the latest major automaker to plan a distinct brand to contain its coming onslaught of electric vehicles.

It will be a mission of brand identity and awareness as Hyundai brings the venture to life.

Hyundai pulled the name Ioniq from its existing eco-friendly compact hatchback, which comes in hybrid, plug-in hybrid and EV versions. The low-volume Ioniq was pitched as something of a rival to Toyota's hybrid Prius, a nameplate that also was parlayed into a distinct brand effort at Toyota.

Hyundai said it is creating the Ioniq brand "in response to fast-growing market demand" as the company plans to "lead the global EV market."

Analysts say it's really a subbrand at best. The automaker confirmed that it will keep the Hyundai badge on the new Ioniq products and sell them through existing dealers. That's different from Hyundai's Genesis luxury brand, which has a separate identity and growing retail network.

The Ioniq name, which melds the words "ion" and "unique," is not unlike Volkswagen's use of the ID moniker for its electric vehicle lineup. Cadillac will employ names ending in "-iq" for EVs — like the coming Lyriq. Audi has E-tron, and General Motors is reviving the Hummer name for an electric pickup.

But the history of subbrands has not always been kind, as Sam Abuelsamid, principal research analyst at Guidehouse Insights, points out. Toyota's effort to create a Prius family of vehicles several years ago by adding a wagon and a smaller hatchback was discontinued as sales fell with the rise of crossovers.

What's noteworthy in Toyota's effort is that the technology itself was a success: Toyota now offers hybrid powertrains across most of its lineup and is launching a hybrid-only crossover and minivan.

"The same thing that happened with the Prius family is likely to happen with Ioniq," Abuelsamid warned. "They'll launch it. It will probably have one, maybe two generations of vehicles — and then quietly fade away as electric powertrains become ubiquitous throughout the lineup, much like hybrid powertrains did at Toyota."

As a transitional step, Abuelsamid said distinct naming for EVs can be useful for marketing and consumer awareness. "I think Hyundai probably recognizes that it's an interim step to show what they are doing with electric," he said. "Automakers are trying to figure how they can actually sell these vehicles."

Three vehicles are planned to start: the Ioniq 5 midsize crossover next year, the Ioniq 6 sedan in 2022 and the Ioniq 7 large SUV in 2024.

Karl Brauer, an industry analyst formerly with Cox Automotive, said there is really no downside to announcing an EV brand.

"Hyundai is not committing to any serious upheaval, like a new dealer network," he said. "And there's upside because it makes it look like they're this progressive, forward- thinking company."

Indeed, much of the focus really is on China and Europe, where EVs are more compelling because of regulations.

Whether Ioniq and other electric subbrands are successful is another story, Brauer said.

"The world could be totally EV- friendly over the next five years and these vehicles could take off. Or, I might predict that the world remains not very EV-friendly — certainly not the U.S. — and they don't sell very many of them."