Kia tells dealers its strategy is for both electrification and combustion

LAS VEGAS — Kia America's strategy will be to continue developing internal combustion engine vehicles even as it brings new electrified models to market, the company told dealers at its make meeting at the NADA Show on Saturday.

Kia said it will introduce two affordable electric vehicles in 2025: the EV3 subcompact crossover and the EV4 subcompact sedan.

Kia showcased the EV3 and EV4 concepts at the Los Angeles Auto Show in November and hinted the pair was next in the pipeline.

The automaker is looking to the two nameplates to make EVs more accessible, dealer Matthew Phillips, CEO of Car Pros, told Automotive News after the meeting. Car Pros operates seven stores in California and Washington; five of them are Kia stores and are responsible for 6 percent of Kia's U.S. EV sales.

The bite-sized EV siblings could be built at Kia's plant in Monterrey, Mexico, which could make them eligible for the federal $7,500 EV tax credit, but Kia did not confirm the production location, Phillips said.

By contrast, Kia's three-row EV9, which began deliveries in December, tops out around $75,000 with shipping. Kia sales chief Eric Watson said during a panel discussion at the Automotive News Retail Forum: NADA on Thursday that he expects the EV9 to be the brand's highest volume EV and bring in about 2,000 sales a month.

But the EV9 is imported from South Korea and does not qualify for the $7,500 tax credit. That is expected to change this summer, when Kia moves production to its plant in West Point, Ga.

In the meantime, the brand is leaning into leasing so it can pass the tax credit along to consumers, in accordance with IRS rules. Kia's leasing penetration has increased from 5 to 60 percent, Watson said.

"I'm looking forward to when the EV9 is built in Georgia and customers have more options," Phillips said.

Phillips said the EV9 may be expensive compared with a car, but it is inexpensive compared to other utility vehicles on the market from Tesla and Rivian.

EV9 buyers have income over $150,000, according to Kia. But to be more competitive, EVs need to have price party with gasoline models, he said, noting that most EV shoppers are still early adopters.

Kia also is considering increasing its product mix of plug-in hybrids on its Sportage and Sorento crossovers, as well as adding plug-in powertrains to existing vehicles.

"I have been a huge fan of PHEVs," Phillips said. "We never saw a wide range of consumer adoption, but now that customers are looking at EVs, we're seeing more demand for it.

"I am a huge proponent of EVs, but I don't believe they're the best fit for everyone, and plug-ins are a good fit for a lot of people."