Kia poised to pull ahead in race to inexpensive EVs, exec says

Kia's early-to-market approach to electric vehicle development will help it bring inexpensive models to the U.S. mass market faster than other automakers, an executive says.

Kia America COO Steve Center told Automotive News that the brand has a head start on rivals thanks to the experience it has accumulated in the space.

"We're ahead of most, and we're trying to rush out ahead because our technology will be more evolved," Center said, noting that Kia's newest entry, the EV9, is already on a third-generation battery.

"You can't just jump in and catch up. You have to have your own R&D, your own secret sauce," he said.

Developing inexpensive EVs is a shared goal across the industry. Electric vehicle sales continue to grow, but the pace has slowed, and consideration is waning.

Until recently, the industry was expecting less expensive products from EV powerhouse Tesla. But according to reports this month, CEO Elon Musk is now shifting his focus away from creating low-cost, low-margin EVs to developing robotaxis instead.

Chinese automakers also are ahead on inexpensive EVs, which insiders view as a potential challenge to the U.S. auto industry. BYD, Nio and Geely have already scaled up in China and are edging below Tesla and Volkswagen on price. All three are expanding into Europe.

Kia has three EVs in its portfolio and targets a total of eight in the U.S. by 2029. Globally, the automaker expects EVs to account for more than half of all sales by 2030.

The planned EVs include a pair of smaller offerings — the EV3 subcompact crossover and EV4 subcompact sedan — that Kia expects to lead mass adoption.

Forecasters believe the EV3 will launch at the end of 2024 or the beginning of 2025. The EV4 will likely follow in 2026.

"We're getting there, and we will already have the expertise and the manufacturing scale," Center said, referencing parent Hyundai Motor Group's EV and battery complex under construction outside Savannah, Ga., which is scheduled to open in October. The plant will build six models for the Kia, Hyundai and Genesis brands.

Kia also has updated its factory in West Point, Ga., to build the three-row EV9. That nameplate went on sale in December and is slated to move into West Point this summer.

The battery pack is the main cost for EVs. Center said the sooner lighter, higher-energy batteries can be developed, the sooner the cost will come down.

"That's the holy grail," he said.

Most EVs on the road today have been purchased by early adopters, leaving middle-class mainstream buyers as the next growth area.

Center said the $7,500 federal EV tax credit, available to buyers of EVs that meet assembly and material sourcing requirements, is more appropriate for this segment of buyers.

"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," he said.

"When you're building affordable EVs in the U.S., the rebate will appeal more to households with less income," Center said.

But the point of the rebate isn't to make the cars more affordable, he said. "It's 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."

According to Center, EVs provide a blank slate for each automaker because of how much they differ from gasoline-powered vehicles.

"Just because you're great at something else doesn't mean you're going to be great at EVs," he said. "If someone wants an EV, and their regular brand doesn't have it, they're going to have to look elsewhere. Right away, they will have to explore other brands."

Kia's speedy build-out of its electric lineup will be an advantage.

"We will be selling Kia customers their second and third EV when some other companies finally get in the game — and they're going to have to conquest," Center said.

"Whatever our reputation with gas vehicles, our EVs are all World Car award winners, and they're stacking up trophies," he said.

"We all get a fresh start."