Kia EV3, EV4 electric vehicles target mass market

Just as Tesla and Rivian will pursue more mainstream buyers by introducing smaller, more affordable versions of their high-end electric vehicles, Kia intends to launch two subcompact EVs to spur mass-market adoption of the expensive technology.

The plan is taking shape following the December launch of the South Korean brand's largest and most expensive vehicle, the EV9. That three-row EV is targeted at a more affluent buyer than Kia — once known as a budget option — has attracted in the past, with an annual income of at least $200,000. The EV9's top trim GT Line costs just under $80,000 including shipping when fully equipped.

But while Kia is moving toward higher transaction prices, it does not want to abandon its traditional consumer.

Part of its EV roadmap now includes a pair of electric vehicles — the EV3 subcompact crossover and EV4 subcompact sedan — that address the next growth area for electrics: the mainstream middle class.

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

Ed Kim, president of AutoPacific, told Automotive News that part of the recent softening of EV growth is because of a product mix imbalance.

"Interest in EVs has not gone down at all — in fact, EV consumer consideration is significantly higher than it was a year ago. It's just that the market is now oversaturated with EVs at luxury price points," Kim said.

According to AutoPacific's EV Consumer Insight study, over half of consumers who do not want to buy an EV cite cost as the No. 1 barrier.

The study also shows that EV "rejectors" have significantly lower incomes than EV owners, which means that electric vehicle growth hinges on creating more affordable product options, ideally with a price point below $35,000.

"There's more white space in the market for affordable EV products, and specifically, the right kind of EV product," Kim said.

The Nissan Leaf and the Chevrolet Bolt are priced for the mainstream market, he said, but their small size is not desirable.

The Bolt was discontinued after the 2023 model, but General Motors said it will bring it back on its Ultium platform for 2025.

"The typical vehicle in the U.S. is a compact crossover. Aside from pickup trucks, those are the highest selling," Kim said.

"If automakers can approach the $34,000 price point with an RAV4-sized EV, it will go a long way toward speaking to that consumer," he said.

"To continue Kia's growth as a non-luxury brand, they need to be addressing that mainstream part of the marketplace, and fortunately they are with the EV3 and EV4," Kim said.

Kia is billing the EV3 and EV4 as subcompact EVs, but the electric platforms on which they ride will afford a more spacious interior because they don't have to package bulky gasoline-vehicle parts such as the engine, gas tank and transmission.

That means a Seltos-size EV on the exterior will be more like a Sportage on the interior.

Kim said Nissan has been marketing its Rogue-size Ariya electric crossover by comparing the interior to the Murano midsize crossover on the inside.

"When you sit in one, it's true. Even though it's sized on the outside like a smaller Nissan Rogue, it's got a huge backseat and there's a ton of space," Kim said.

Still unknown is how Kia will price the small EVs, but Kim said aiming for $35,000 will keep them competitive.

The Chevrolet Equinox EV will be in the sweet spot when it goes on sale this year. The base model is expected have a starting price of $34,995 with shipping.

That EV will be built at General Motors' Ramos Arizpe factory in Coahuila, Mexico, and will be eligible for the full $7,500 federal tax incentive. That will bring its price down to $27,495.

Capturing eligibility for the $7,500 tax credit will be key for the EV3 and EV4. Mainstream consumers don't tend to lease, and right now that's the only way to recoup the savings on imported EVs.

Kia may be planning to invest in its Kia Mexico plant in Nuevo Leon to upgrade it for electric vehicle production, and some forecasters believe the EV3 and EV4 will be built there.

But in addition to vehicle and battery assembly, Kia's sourcing of minerals and battery components inside of North America will be necessary to make the models eligible for tax credit.

"The real task," Kim said, "is going to be getting the cost structure, particularly for the batteries, to the point where they can make money while selling EVs to a less affluent and more mainstream audience."