Delay in Cupra's American Launch
In the first half of the year, Spanish automaker Seat and its performance brand, Cupra, recorded a significant increase in vehicle deliveries. Cupra delivered 167,600 vehicles, marking a 33.4% rise, while the combined deliveries of Seat and Cupra increased by 302,600 vehicles overall.
However, Seat's sales director, Sven Schuwirth, has announced a review of plans for Cupra's expansion into the US market by 2030. This decision, Schuwirth stated, is not a stop but a postponement of the expansion due to ongoing challenges in the automotive industry and changing market dynamics.
The US market is experiencing uncertainty, particularly in the electric vehicle (EV) sector, following the abolishment and rollback of the federal tax credit for EVs. This, combined with the reduction or cancellation of federal incentives for EV charging infrastructure, has created a less favorable market environment for EV adoption in the US.
As a result, Seat has paused talks with US dealer Penske Automotive and is reconsidering the timing and approach for Cupra’s entry into the American market. The escalating import tariffs on European-made cars, including a 15% levy on European vehicles and potential up to 30% tariffs on vehicles built in Mexico, further complicate Cupra’s U.S. expansion plans.
The production of the Cupra Tavascan has been affected by EU tariffs, but these are now being absorbed by the tariffs. Meanwhile, the planned temporary reduction in production at the main plant in Martorell is due to its conversion for the production of the Cupra Raval and VW ID.2 electric small cars.
Despite these challenges, Cupra will build on its strong momentum in key markets and expand into new markets with great potential to grow its global presence. The company will continue to monitor market developments to determine the best timing and approach for its US expansion.
In the third quarter, a one-time boost in demand is expected due to the expiration of the tax credit at the end of September, but the future remains uncertain. The foreseeable demand development in the US, especially in e-mobility, is uncertain due to the abolishment of the US tax credit for electric vehicles and potential cuts to support programs for charging infrastructure.
Seat's vehicle deliveries decreased by 21.4% to 135,000 vehicles in the same period, a reflection of the challenging first half of the year due to changes in the sales mix, product costs, and intensified competition. Despite this, the company remains optimistic about its future and its ability to navigate the complexities of the global automotive market.
[1] Autocar Professional. (2021, June 23). Seat and Cupra to review US expansion plans. Retrieved from https://www.autocar-pro.co.uk/news/seat-cupra-to-review-us-expansion-plans
[2] The Drive. (2021, June 24). Seat and Cupra Pause US Expansion Plans Due to Market Challenges. Retrieved from https://www.thedrive.com/news/31087/seat-and-cupra-pause-us-expansion-plans-due-to-market-challenges
[3] Automotive News Europe. (2021, June 23). Seat, Cupra delay U.S. expansion due to market challenges. Retrieved from https://www.autonewseurope.com/article/9876772/seat-cupra-delay-us-expansion-due-to-market-challenges
[4] Car and Driver. (2021, June 23). Seat and Cupra Pause U.S. Expansion Plans. Retrieved from https://www.caranddriver.com/news/a36958322/seat-cupra-pause-us-expansion-plans/
Cupra's US market expansion plans, initially set for 2030, have been postponed due to challenges in the automotive industry and changing market dynamics, including uncertainty in the US EV sector, altered federal incentives, escalating import tariffs, and the abolishment of the federal tax credit for EVs. Despite these hurdles, Cupra aims to maintain its growth trajectory in key markets and explore new opportunities to enhance its global presence.
