By Heekyong Yang and Joyce Lee

SEOUL (Reuters) -Hyundai Motor reported report quarterly revenue and income on Thursday on robust gross sales of high-margin vehicles and mentioned it will broaden hybrid lineups to brace for potential modifications in U.S. electrical automobile (EV) insurance policies following the election.

Its forecast-beating efficiency helped ease mounting investor considerations over slowing client demand for vehicles which have battered a few of its rivals together with Ford (NYSE:), Japan’s Nissan (OTC:) Motor and Tesla (NASDAQ:) within the April-June quarter.

However Hyundai (OTC:) additionally warned of an unsure outlook as a result of intensifying value competitors as inflation and excessive rates of interest squeeze customers.

“As client demand for autos is weakening, we anticipate there might be extra competitors and the quantity of incentives can be prone to enhance… making a harder enterprise outlook,” the world’s No.3 automaker by gross sales together with affiliate Kia Corp mentioned in an earnings launch.

Hyundai reported a web revenue of 4 trillion received ($2.9 billion) for the April-June interval, up 23% from a 12 months earlier and simply beating the three.4 trillion received common of 21 analyst estimates compiled by LSEG SmartEstimate.

The web revenue was its highest quarterly for the reason that earlier report excessive set within the Q2 2022.

Hyundai outperformed a few of its rivals by boosting gross sales of premium SUV fashions and hybrid automobiles within the U.S., a transfer that additionally helped it offset a chronic gross sales weak spot within the home market.

Home automobile gross sales in South Korea, Hyundai’s second-biggest market, slumped 10% within the second quarter, extending from a 16% drop within the earlier quarter, as customers proceed to grapple with surging inflation and a weak economic system.

U.S. UNCERTAINTY

Hyundai mentioned it will broaden hybrid lineups as demand for EVs eases globally and uncertainty mounts over U.S. EV insurance policies.

Former President Donald Trump, the Republican candidate, is vital of the EV insurance policies of Democrat President Joe Biden and has mentioned he’ll “finish the electrical automobile mandate” if he wins.

“Even when Trump wins the election, we do not anticipate the Inflation Discount Act (IRA) to be scrapped,” Hyundai Chief Monetary Officer Lee Seung Jo advised analysts on an earnings name, referring to Biden’s signature clear power coverage.

Lee mentioned the corporate continues to observe potentialities and plans to extend hybrid lineups “to organize for potential shrinking of the IRA package deal.”

Hyundai mentioned profitability of its hybrid fashions was just like that of gasoline vehicles, highlighting the phase’s rising contribution to the underside line, as gross sales of pure EVs dropped virtually by 1 / 4.

Hyundai’s automobile gross sales within the U.S. edged up 2.2% within the second quarter. Excessive-margin SUV gross sales accounted for about 80% of the full whereas hybrid automobile gross sales jumped 42% from the identical interval a 12 months in the past, Hyundai mentioned.

The beneficial change price within the second quarter had additionally helped Hyundai’s revenue progress.

The received slumped 4.3% in opposition to the greenback within the quarter from a 12 months earlier, boosting Hyundai’s repatriated abroad gross sales and revenue.

Shares in Hyundai closed down 2.7% earlier than the outcomes.($1 = 1,385.1200 received)