Hyundai Motor, the flagship unit of Hyundai Motor Group, said Tuesday it posted record operating profits of 3.6 trillion won ($2.7 billion) in the first three months of this year, outpacing Samsung Electronics in quarterly earnings for the first time.

The auto giant reported surprising earnings in the first quarter, with operating profits jumping up 86.3 percent on-year. During the same period, Samsung Electronics posted 600 billion won in operating profits.

It is the first time that Hyundai Motor has surpassed Samsung Electronics in terms of quarterly profits since 2009, when the nation adopted a set of new financial reporting standards.

In the first quarter, the carmaker sold over 1 million vehicles, a 13.2 percent on-year jump. Sales increased 24.7 percent to 37.8 trillion won, mostly driven by a surge in sales of sport utility vehicles, including Tucson and Santa Fe and its premium brand, Genesis cars.

In Korea alone, the carmaker saw a 25.6 percent increase in sales to 191,047 units. In overseas markets, it sold 830,665 vehicles, up 10.7 percent from a year ago.

“EV models recorded a 48 percent growth in global sales in the first quarter. We expect strong sales of Ioniq 5, 6, and Kona Electric in the coming months despite chip shortages,” said Seo Gang-hyun, vice president and investor relation chief at the carmaker, during a conference call.

When asked about the impact of Washington’s Inflation Reduction Act, Seo stressed that the impact of such a protectionist measure will be limited because SUVs and Genesis models, other than EVs, are taking up a great portion of sales.

“Although we have no car model that can receive EV tax credit (from the US,) Hyundai Capital America has already elevated the portion of lease car sales to 35 percent as of February from the previous 5 percent,” he said. Hyundai Capital America is the lease and rental service provider of Hyundai and Kia vehicles in the US.

Shortly after the earnings report, the carmaker also touted its plan to set up a joint venture with Korean battery maker SK On in Georgia, the US. Set up to start production by late 2025, the plant will have an annual capacity of 35 gigawatt-hour, equivalent to supplying batteries to 300,000 EVs.

The battery cells produced in the plant will be supplied to EVs manufactured by Hyundai, Kia and Genesis brands in the US. The joint venture is in proximity to Kia’s Georgia plant, Hyundai’s Alabama plant, and a soon-to-be-built EV manufacturing facility in Georgia.

“Even though the joint venture will start supplying batteries for (US-made) EVs from 2025, it will not be until 2026 when all-electric models we produce can receive IRA tax credits,” Seo said. “During 2024-2025, if we face severe challenges in US sales, we plan to offer additional incentives to those who buy our EVs.

About the heated competition with cheaper Chinese EVs in the market, the Korean carmaker said it would focus more on enhancing product quality.

“Hyundai cars are winning titles, (including) Car of the Year Award and other global awards. We believe consumers are selecting our cars over Chinese products based on these merits,” Koo Ja-yong, another IR official, said during the conference call.