Kia Likely To Build Electric Vehicles In The U.S. In 2024, But Maybe Not Plug-In Hybrids
According to Reuters, these South Korean media sources cited an unidentified auto industry source for this news, however it is not a surprising development since Hyundai (Kia’s closely related partner company) has already announced it is negotiating for a “Mega Site” to produce electric vehicles in Georgia. Whether Kia would also manufacture electric vehicles at the same site is unknown, but given the two companies have extremely close ties (one may consider them “siblings” of the same parent company) it is logical to conclude that Kia is making plans for U.S. electric vehicle production in more or less the same timeframe as Hyundai.
Considering that the recently passed Inflation Reduction Act (IRA) suddenly disqualified both Kia and Hyundai (among others) from U.S. federal incentives aimed at electric (EV) and plug-in hybrid (PHEV) customers, Kia would understandably not want to cede the advantage these incentives provide to automakers whose vehicles do qualify for the incentives, if it doesn’t have to. Electrek points out that many other car makers have already, recently announced plans to bring electric vehicle production to the U.S., so it seems clear that Hyundai and Kia must do this in order to remain competitive. This is why I think we can safely assume these unconfirmed reports are accurate: up until the law changed, at least, Hyundai and Kia combined were selling more plug-in electric vehicles than all other car makers in the U.S. except for Tesla. As Reuters called out, Hyundai and Kia have the most to lose from the IRA and in fact, the IRA represented a sort of broken promise by the U.S. government, and President Biden in particular, to the South Korean manufacturers.
What I don’t see many in the media talking about though is whether Kia and Hyundai also plan to build PHEVs in the U.S. I bring this up because Kia may already have been planning to ramp down its PHEV production and sales, starting this year or next. I would not be surprised if Kia and or Hyundai decide to forgo moving PHEV production to the U.S. and perhaps even accelerate their phase out in this market as a result of the IRA. I also would not be surprised to see Kia and Hyundai shift more rapidly to the hybridization of more of its vehicles, and by that I mean hybrids that do not plug-in. Non plug-in hybrids didn’t qualify for federal incentives before the IRA went into effect, nor do they after. Their increased availability then is something the two sister companies may want to accelerate as a means of attracting/retaining more customers during the time between the IRA passage and when they may be able to bring electric vehicles made in the U.S. to market (vehicles would again be eligible for the U.S. federal incentives). If both companies lose EV and PHEV sales to other car makers that are still eligible for federal incentives, it would benefit Hyundai and Kia to offer fewer of those plug-in vehicles in the U.S. market in the interim since they may have to subsidize or lower their prices to remain competitive. Since other markets are closer to South Korea and or may be more lucrative on a per unit basis, shifting allotments between international markets is something I anticipate we may see from Kia and Hyundai, soon.
What do you think? Will it actually become a bit harder to find Kia and Hyundai plug-in vehicles for sale in the U.S. over the course of the next two years, and simultaneously a little easier to find them in places like Europe, Australia, Canada, and across Asia? Please leave your comments and questions below.
Images courtesy of Kia and Justin Hart.
Justin Hart has owned and driven electric vehicles for over 14 years, including a first generation Nissan LEAF, second generation Chevy Volt, Tesla Model 3, an electric bicycle and most recently a Kia Sorento PHEV. He is also an avid SUP rider, poet, photographer and wine lover. He enjoys taking long EV and PHEV road trips to beautiful and serene places with the people he loves. Follow Justin on Twitter for daily KIA EV news coverage.