Kia offers up to $7,500 in incentives in US for leasing EV6

In response to the Inflation Reduction Act, the carmaker is also dangling a $3,750 cash bonus on purchases

Kia's electric compact crossover SUV line EV6

Sungsu Bae 1

2023-05-17 10:23:35 baebae@hankyung.com

Automobiles

South Korea's Kia Corp. is offering discounts of up to $7,500 in the US for leasing its electric compact crossover SUV line EV6 to boost its price competitiveness in response to the Inflation Reduction Act (IRA) there.

Kia America on Tuesday announced up to $7,500 in initial discounts to those leasing this year's EV6 models by June 7. For example, someone who leases an EV6 Wind with rear-wheel drive over the period can make a down payment of $4,999 and monthly installments of $499 over 36 months.

Kia is seemingly responding to the IRA by discounting EV6 leasing in the US to secure profitability through higher leasing sales.

The IRA offers a tax credit of up to $7,500 to buyers of electric vehicles (EV) that meet key mineral and battery requirements among vehicles whose final assembly is in North America. EV6s produced in South Korea are ineligible for this benefit.

Yet Kia is subsidizing its commercially sold vehicles such as those for lease and rental. This is also why Hyundai Motor Group announced its focus on leasing sales until the completion of its Metaplant America, an EV factory being built near Savannah, Georgia.

Hyundai Motor as of last month greatly boosted its leasing ratio from 5% to 35%, with Kia's growing to the 25% level.

Kia Finance America is offering buyers of a 2023 EV6 model a cash bonus of $3,750, apparently under a strategy of cutting prices to boost sales. Last month, EV6 sales in the US reached 1,241 units, plunging 52.8% from April last year.

Write to Sungsu Bae at baebae@hankyung.com