One Surprising Reason Why Kia Is Outselling Hyundai Right Now

Are you ready to start out Monday by having your mind blown? The original Kia Sportage sold in America could have easily been a Ford and, had things gone differently, Kia would have been owned by the Detroit automaker instead of part of a larger group with Hyundai. This was a good outcome for Kia and, perhaps, an even better outcome for Hyundai.

Hyundai and Kia sell roughly identical lineups in the United States, though each has their own distinct aesthetic. There are two big differences between the lineups, and those seem to favor Kia right now. The Morning Dump is all about surprising outcomes, and one is that the great Chinese EV expansion might not be going quite as well as you might expect as consumers in other Asian countries are a little wary about China.

EV growth has been strong in Europe, but that won’t stop EU lawmakers from supporting its own automakers. At the same time, there’s mixed support in America for its own homegrown company.

Let’s end on a mystery. Why did Carvana, the massive online used car retailer built to disrupt traditional dealerships… buy a dealership?

It’s Van Time, America

Last year, Hyundai outsold Kia in the United States by about 40,000 vehicles. Through the first two months of 2025, Kia has sold 120,310 vehicles. Hyundai, its sister brand, has sold 116,535. This is a small difference, and it’s quite possible that Hyundai will end up on top again this year.

It’s an interesting scenario, though, and I have a theory as to why this is happening. First, though, a little history. South Korea’s Kia began, like many Asian car companies, by building licensed copies of someone else’s design. For Kia, this meant Honda motorcycles, Mazda trucks, and even some Fiats and Peugeots.

With the fall of South Korea’s military dictatorship, there was a new enthusiasm in the country and a desire for global trade. Because Mazda and Kia had a relationship, and Ford and Mazda had a relationship, this meant that Ford and Kia were linked. The Ford Festiva, sold here, was also a Kia Pride or Mazda 121 in other markets. Eventually, Mazda and Kia would develop a platform for the Japanese Bongo and the small Kia Sportage, which Kia wanted to sell in the United States. Could the Sportage have given us a pre-Escape Ford variant? That’s the rumor, though allegedly Ford was worrying about cannibalizing Explorer sales.

The Sportage was one of the earliest small crossover SUVs in the United States and found a real audience here. Unfortunately, the Asian financial crisis of the late ’90s hit Kia hard and the company was forced to reorganize. Ford was one of the bidders for Kia, but Hyundai ultimately ended up owning more than half of its one-time competitor. Unlike the Volkswagen-Audi relationship, for instance, Kia isn’t exactly a brand of Hyundai. They’re independent companies, though Hyundai is still the largest shareholder and the two companies develop platforms together.

Even though they’re “independent,” the companies sell mostly the same cars built on the same platforms in most markets. Kia has the EV6 and Hyundai has the Ioniq 5. Kia has the Telluride and Hyundai has the Palisade. The biggest difference between those, for most customers, is how they look.

There are some lineup variations. For instance, Kia sells the EV9 but Hyundai doesn’t have the Ioniq 9 for sale quite yet, I feel like this is cancelled out, though, by the fact that Hyundai has the Ioniq 6 and Kia doesn’t yet have the equivalent.

The biggest difference, and the one I think is key, is that Hyundai sells an expensive small truck in the form of the Santa Cruz and Kia sells a reasonably priced minivan in the form of the Carnival. I love the Carnival, and am excited that there’s now a hybrid variant. I also really like the Santa Cruz. Abstractly, you might assume that a truck being sold in a bodystyle without a lot of competitors would outsell a minivan that has a lot of competition, but that’s not what happened.

Let’s look at the math. Through this year, Kia has sold 8,105 Carnivals. Hyundai has sold 3,724 Santa Cruzes. That’s a difference of 4,381 vehicles. The difference between Kia and Hyundai sales this year so far? 3,775 vehicles. That’s pretty close!

I think it’s reasonable that Kia and Hyundai looked at these two relatively niche markets and decided that, unlike crossovers, it wasn’t going to try and sell two small trucks and two minivans. What’s interesting to me is that the Santa Cruz, which when it was launched seemed like a no-brainer to me, has only had middling sales. The Carnival, which is in a more crowded space, has been a hit for Kia.

Besides design, I think cost is a big differentiator. The Santa Cruz has only one real competitor in the form of the Ford Maverick, but the Maverick launched at a price that was thousands of dollars cheaper. At the same time, the Maverick offers a hybrid and the Santa Cruz does not. This is the inverse for the Carnival. You can get the Carnival as a hybrid and, while it’s priced roughly the same as other vans, availability has meant that many buyers are likely to get a Carnival for less than a comparably equipped Sienna.

While it makes sense to me to not compete with itself in this market, I still want the company to try for no other reason than I like vans. What I’m saying is that Hyundai should sell the Staria here. More vans please! I’d also take a Kia version of the Santa Cruz in a hybrid. K, thx.

Vinfast Is Killing China In Its Home Market

The threat of Chinese automakers blowing up markets with heavily-subsidized, cheaply-produced electric cars is real. That being said, Chinese brands aren’t as strong in other places as you might guess. My favorite example is in England, where the historically British (though Chinese-owned) MG is killing it, but the many other Chinese brands are merely doing fine.

VinFast, despite stumbles here, is doing quite well selling cheap EVs in its home market of Vietnam according to Bloomberg:

VinFast, with its expanding network of proprietary charging stations and an entry level mini EV that costs around $11,700, is easily outselling Chinese rivals. Of the nearly 91,500 EVs sold in the country last year, more than 87,000 were VinFast models. However many of those sales were to VinFast-related parties, in particular the nation’s largest taxi service, Green and Smart Mobility JSC, which is 95% owned by VinFast founder Pham Nhat Vuong.

Besides cost and a huge local advantage, there are other reasons why VinFast is doing better than companies like BYD:

“It’s not practical to own a Chinese EV in Vietnam,” said Thinh Hanh, a 41-year old Hanoi resident who came to the VinFast showroom to look for a VF 6 model with his brother. Thinh has been driving a VF 9 since 2023 and likes the high level of personalization it provides that gasoline cars couldn’t offer. “There’s a lack of charging stations to suit Chinese cars.”

There’s also lingering reluctance to buy Chinese in light of historic tensions between the two Communist countries. “People are a bit concerned because this is a Chinese brand,” said Dong Hai, a salesman at Chery Automobile Co.’s showroom in Hanoi.

Some of this is extremely regional. When I spoke to buyers at the MG and BYD stands at the Goodwood Festival of Speed in the UK last year, it didn’t seem like people were that concerned about the cars being from Chinese automakers.

Europe Wants Its EV Batteries To Be More European

Europe’s electric car market has undergone a bit of a whiplash effect over the last few years, especially as countries have intermittently promoted and then pulled support for EV subsidies. This year EV sales are way up for pretty much everyone that isn’t Tesla, even if the batteries come from everywhere but Europe.

It doesn’t help that one of the EU’s big battery projects, Northvolt, had to get bailed out.

Now the EU is looking for ways to increase the European content of batteries sold on the European continent according to Reuters:

The European Commission will present measures next week meant to boost demand for electric vehicles (EVs)in the European Union, and envisages local content requirements for car battery production, according to a draft of the proposals.

The EU executive will publish its automotive action plan on March 5 to help ensure EU car producers can electrify their fleets and compete with more advanced Chinese and U.S. rivals.

The “U.S. rivals” bit is interesting. Ford does sell electric cars in Europe, though I think a lot of this has to do with Tesla. At some point in the future I might write a piece about how Europe ending fines on electric cars could inadvertently… or maybe not so inadvertently… harm Tesla.

This concern has shifted to the United States where the head of one of America’s largest unions is implying that, hey, maybe asset managers should by more wary of Tesla’s prospects. Why? The concern is that the people who run the funds that their members are invested in aren’t seeing that Tesla could be in trouble because they don’t want to get on the President’s bad side.

Investors initially seemed to reward Tesla for Trump’s victory, though much of those gains have been wiped out. Where this goes is anyone’s guess.

Carvana Buys A Dealership

60 days ago:

I asked Carvana’s CEO, Ernie Garcia, if he would EVER consider acquiring a traditional dealership.

(FYI – Carvana just acquired a traditional dealership yesterday)

Here was his response at the time: pic.twitter.com/Bj7ZOoQY9l

— Car Dealership Guy (@GuyDealership) February 28, 2025

Here’s a weird one for you. Carvana, the massive online used car retailer, has purchased a Stellantis dealership franchise in Casa Grande, Arizona.

From Automotive News:

Carvana bought Jerry Seiner Chrysler-Dodge-Jeep-Ram in Casa Grande, Ariz. — roughly 45 miles south of Tempe, Ariz., where the company is headquartered. Carvana confirmed the deal to Automotive News. A transaction price was not disclosed.

A Carvana spokesperson provided the following statement via email to Automotive News:

“We’re always experimenting and this is a small test in a single market. We are excited to join the Stellantis network and our focus in this test will be learning how to provide great customer experiences at a franchise dealership — we don’t expect it to have any noticeable impact to our results for the foreseeable future.”

Why did they do this? A couple of months ago, Car Dealership Guy asked Carvana about exactly this scenario and CEO Ernie Garcia was somewhat dismissive. Within CDG’s question was the answer to why this might be happening: Inventory. Quite simply, Carvana needs cars to sell, and while its model is designed to do an end-run around dealerships by offering an easier experience, car dealers get a lot of vehicles.

This will be fun to watch.

What I’m Listening To While Writing TMD

I love a good FU Break Up song. Here’s Chappel Roan with “My Kink Is Karma” if you enjoy a vengeful ex, clown makeup, and roller blades. “No need to be hateful in your fake Gucci sweater” is such a good burn.

The Big Question

Why do you think Kia is outselling Hyundai so far? Is it just some boring availability/design thing? The Kia Soul? Design?

Top photo: Kia