Kia US Head: "Georgia EV Production to Be Advanced to Mid-Next Year"

Yoon Seung-gyu, Head of Kia's North America Division and U.S. Sales Corporation, stated on the 5th (local time) that "the start of electric vehicle (EV) production in Georgia, USA, will be advanced to mid-2024 if possible."

On the same day, Yoon met with correspondents at the Kia booth during the '2023 New York International Auto Show' held at the Javits Center in Manhattan, New York, and said that this early operation is being pursued in response to the U.S. Inflation Reduction Act (IRA), which provides incentives only for North American-made EVs. He explained, "Not only the production facilities but also the batteries need to be aligned," adding, "There is a considerable possibility that the production timing will be moved up. Not only Kia but the entire Hyundai Motor Group is mobilizing all resources."

For Kia, which does not meet the IRA's 'final assembly in North America' requirement, a significant gap in subsidies and resulting competitiveness decline is inevitable until the Georgia EV plant begins operation. Last year, Hyundai Motor Group (Hyundai and Kia), which ranked second in the U.S. EV market following Tesla in the first half, has already seen a slowdown in EV sales.

However, Yoon dismissed concerns about Kia's sluggish EV sales in the first quarter as a "planned and prepared situation." He explained, "Even without the $7,500 incentive, vehicles are steadily selling at full price," adding, "We believe it is appropriate to observe the market situation after tax benefits are announced and then implement sales strategies, so sales were temporarily slowed from January to March."

Regarding the recent reduction in the number of models eligible for subsidies from the initially expected 21 models in the detailed IRA guidelines, he said, "It can be quite helpful until EV9 production starts in Georgia," and evaluated, "How much lease sales or commercial sales we can secure and how competitive we can remain compared to competitors until we receive subsidies are important." Although there will inevitably be a subsidy gap for personal vehicles until the Georgia plant starts production, the strategy is to respond by expanding lease and commercial sales for corporate purposes.

He also expressed strong determination to target the EV market going forward. Kia aims to increase the EV sales ratio in the U.S. market to 7-8% this year, nearly doubling from last year's 4-5%. On this day, Yoon emphasized the significant expansion of EV demand due to stricter regulations such as zero-emission systems in the U.S., stating, "Electrification is an unstoppable trend." He added, "More than 150 EV models will be launched by 2026," and assessed, "It is a market transition period where no one knows who will be the winner or loser." Regarding how much Kia can grow during this process, he showed caution, saying, "It depends on supply issues and the upcoming EVs."

On the same day, Kia unveiled the 'The 2024 Kia EV9,' its first dedicated three-row SUV electric vehicle model, for the first time in North America at the New York Auto Show. Yoon said, "When the next-generation EV model was in the planning stage, the U.S. corporation strongly requested the headquarters that it should become the Telluride EV," expressing confidence that "we made a car that combines the advantages of an SUV, the benefits of an EV, and aerodynamic efficiency." At the venue, there was enthusiastic interest in the EV9, with comments like "There has never been a car like this." The EV9 will be the flagship model representing Kia's global electrification strategy 'Plan S' and is expected to be the first pure EV produced locally in the U.S.

When asked to compare with Tesla, the leader in EVs, he said, "Currently, Tesla is overwhelming (in the EV market)," but added, "What I want to say is that Kia's first dedicated EV, the EV6, ranked first in this year's service index." He explained, "EVs still lack service networks. Even Tesla has not secured sufficient service capacity," and expressed confidence, "As a mass-market brand, Kia has that aspect, so we believe we can compete." Another strength is that Kia's customer base in the U.S. is young. He evaluated, "All brands want to have Generation Y and Z as customers," adding, "Now is the time when the purchasing power of Generation Y and Z crosses over with Generation X."

Yoon predicted that overall new car demand in the U.S. will increase this year as the supply constraints that shrank demand during the pandemic ease. He said, "It grew by 22% in the first quarter, ranking among the top among mass-market brands in the industry," and added, "Sales health has also improved, not relying on incentives as in the past." The market estimates that the new car market will grow by 7.5% this year. Regarding supply chain disruptions, he said, "It has improved and stabilized significantly compared to last year, but judging by inventory levels, there is still a long way to go."

This content was produced with the assistance of AI translation services.