Kia Corp., South Korea’s second-largest carmaker, will start producing its entry-level electrified model EV2 from its plant in Slovakia next year to regain ground in Europe against its Chinese peers, which face up to 45% countervailing import duties in the region.
According to auto industry sources on Sunday, Kia plans to churn out 80,000 units of EV2 from a plant in Slovakia in 2025 to sell them only in Europe and then expand output to 100,0000 units in 2026, at which time the EV2 would account for 17.5% of Kia’s total car sales in the region, about 570,000 units in 2023.
The EV2 is Kia’s new entry-level electric sport utility vehicle model, smaller than the carmaker’s current most compact electrified model EV3, which recently hit the EV market in Europe.
It will be released in two models: one powered by nickel-cobalt-manganese (NCM) batteries, the other equipped with more affordable lithium iron phosphate (LFP) batteries.
The LFP battery-powered EV2 will be priced between 20,000 euros ($29,000) and 30,000 euros to better compete against Chinese EVs, which have rapidly grown their share of the European EV market from 2.9% in 2020 to 18.2% in the first half of 2024 thanks to a flurry of affordable models.
Kia is pinning its hopes on the EV2 to regain market share against Chinese EVs in Europe after the European Commission in October decided to slap definitive countervailing duties of up to 45% on Chinese EVs after the discovery of Beijing’s unfair subsidization of Chinese EV exports to European Union member countries following an investigation.
(Graphics by Dongbeom Yun) After cheap Chinese EVs began flooding the EU bloc, most multinational finished carmakers have seen their market share in Europe shrink this year. They include Kia, which sold about 490,000 units from January to November this year, an 8.1% drop from the same period last year.
“Kia is expected to be the leading compact EV brand in Europe, offering drivers the most bang for their buck with the EV2, which will hit the market early next year, coupled with the recently released EV3,” said an unnamed official from Kia.
The company plans to roll out additional models in Europe to meet its sales target of 800,000 units in the region four years later, the official added.
EV2 FACES FIERCE COMPETITION IN ENTRY-LEVEL EV MARKET
The EV2 measures 4,000 millimeters (mm) long and has a wheelbase of 2,555 mm, while the EV3 measures 4,300 mm long with a 2,680 mm wheelbase.
The LFP battery-powered EV2 can travel up to 300 kilometers on a single charge versus 440 km for the NCM-powered EV2.
Kia EV3 (Courtesy of Kia)
In Europe, the EV2 is expected to compete with BYD’s Dolphin, Volkswagen’s ID.2, Peugeot’s e-2008 and the Mini Cooper Electric.
Tesla Inc., the world’s No. 2 EV manufacturer, plans to launch the Model Q, an affordable EV priced below $30,000 next year, while Toyota Motor Corp. recently launched the bZ3X, an electric compact crossover SUV, in China.
BETTER QUALITY AND BRAND AWARENESS
Despite mounting fears of higher US tariffs on car imports from Mexico, Kia has decided to keep production of its mid-size K4 sedan at its Mexico plant unchanged and import all of them to the US, the world’s second-largest car market.
US President-elect Donald Trump has warned of slapping 25% duties on all imports from Mexico.
Considering that such tariffs would be imposed on all car imports from the Mexican plants of other major automakers, such as General Motors, Ford, Stellantis and Nissan, the Korean carmaker does not need to cut production or change a production site for now, said an official from Kia.
Kia K4 (Courtesy of Kia) Kia churns out 120,000 units of the K4 every year from its plant in Mexico, which has an annual production capacity of 400,000 units, and exports them to the US.
In particular, the residual value of Kia cars has improved significantly in recent years. A car’s residual value is the estimated value, or price, after depreciation, which determines the car’s price in the used car market.
