Kia is highly optimistic that it can outshine rivals in delivering affordable electric vehicles in the mass market in the United States with its early-to-market approach, Automotive News reported, citing Kia America COO Steve Center.
Kia’s foray into affordable EVs
The South Korean auto brand anticipates a substantial boost in electric vehicle uptake with the arrival of its new EV3 subcompact electric crossover and the EV4 electric sedan.
According to the company executive, Kia’s experience in electric vehicle technology enables it to have a huge advantage against its rivals.
“We’re ahead of most, and we’re trying to rush out ahead because our technology will be more evolved. You can’t just jump in and catch up. You have to have your own R&D, your own secret sauce.”
Kia America COO Steve Center
Making electric vehicles affordable has been a crucial goal of electric automakers across the world, especially amid the sales growth slowdown. In that sense, Kia aims to advance as a leader in low-cost EVs with its new offerings. It must be noted that the brand’s main rivals in this ambition include Chinese companies like BYD, Geely, and Nio.
Kia is expected to officially launch the EV3 in late 2024 or early 2025, followed by the EV4 sometime after that. As per the report, the brand may sell the new electric crossover at approximately $32,000 if it arrives in the US market.
Plans for the future
Kia currently offers three electric vehicle models in its lineup. That number is expected to increase to a total of eight EVs in the US market by 2029.
These planned model launches are crucial for the company to achieve its goal of having EVs account for over 50% of its total sales by the end of the decade.
Kia’s upcoming EVs include a couple of smaller models, the EV3 and the EV4. The Hyundai-owned brand expects these two models to lead the mass adoption of electric vehicles.
“We’re getting there, and we will already have the expertise and the manufacturing scale.”
Kia America COO Steve Center
As per the Kia exec, Hyundai Motor Group’s new EV and battery complex outside Savannah will finally start operations in October this year to crank out six Hyundai, Kia, and Genesis EVs. Moreover, it has also upgraded its West Point plant to build the three-row electric SUV EV9.
Kia plans to accelerate its development of lighter and higher-energy EV batteries to allow the company to reduce pricing.
“That’s the holy grail.”
Kia America COO Steve Center
Significance of federal tax credits
The initial wave of the electric vehicle uptake is largely due to early adopters’ decision to join the shift. Therefore, the industry must now target middle-class mainstream buyers to stimulate sales growth.
According to COO Center, the US $7,500 federal tax credit for electric vehicles is more suitable for middle-class mainstream customers.
“When you look at the market, the [current] buyers are wealthier, and their incomes phase them out of the rebate if they buy [the vehicle]. But if they lease the car, which most of them do anyway, they get the rebate. When you’re building affordable EVs in the U.S., the rebate will appeal more to households with less income.”
Kia America COO Steve Center
COO Center noted that the rebate is not aimed at reducing electric vehicles’ pricing. Instead, it is “meant to help the manufacturers bridge the transition [to EVs] in the beginning and create a certain amount of sales momentum while we’re building our supply chains and manufacturing.”
Excitingly, Kia plans to produce its most expensive EV model in the US, the EV9. It will apparently undergo production at its Buford plant in Georgia. It would be interesting to see the brand produce more EVs and establish new factories in the US to gain access to the federal tax credits under the IRA. It will make its EV offerings more appealing to American buyers.
