Tesla Model Y runs with Kumho’s EV tires, its new cash cow

Tires tailored for electric vehicles are expected to become the next cash cow of South Korean tire maker Kumho Tire Co. thanks to growing EV tire orders from foreign carmakers such as Volkswagen Group and Tesla Inc.

According to tire industry sources on Tuesday, Kumho Tire supplies its Majesty 9 EV Solus TA91 tires to Tesla’s Model Y cars churned out from Gigafactory Shanghai as an original equipment (OE) order.

The Model Y is an all-electric rear-wheel drive (RWD) sport utility vehicle (SUV) model. Those produced from Tesla’s Shanghai factory are exported to Korea, Canada, Mexico, Australia and Singapore.

Its 19-inch wheels are supplied by Kumho Tire, as well as its bigger local rival Hankook Tire & Technology Co. and the world’s fourth-largest tire manufacturer Continental Tire of Germany.

In particular, all Model Y SUVs bound for Korea use Kumho Tire’s EV tires, indicating Tesla's recognition of Kumho’s EV tire technology, said an industry official.  

Because EVs weigh more than combustion engine cars but accelerate faster, EV tires need different designs than those of petrol car tires, according to the tire industry.

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Tesla is among many major customers of Kumho Tire.

In February, Kumho Tire won an OE order to supply its Crugen EV HP71 tires to the Volkswagen ID.4, the German carmaker’s all-electric SUV model.

It also supplies EV tires to Kia Corp.'s EV6 and EV9, as well as Hyundai Motor Co.'s Kona Electric.

The latest performance is a big turnaround for Kumho Tire, which struggled to gain attention from global EV makers until 2021, when it started supplying EV tires to Kia.

It introduced Korea’s first EV tires under the Wattrun brand in 2013 but trailed its bigger rival Hankook Tire, which in 2020 started offering EV tires to Porsche AG, Bayerische Motoren Werke AG (BMW), Tesla and Audi AG.   

Buoyed by the growing demand for its EV tires from major finished automakers from around the world, Kumho Tire is expected to supply more tires to global EV makers next year, the industry expected.

The higher demand for its EV tires lifted Kumho Tire’s overseas tire production to 53.3% of its total output in the first half of this year, from 46% in the same period last year.

The company's earnings in the first six months of this year also grew.

Kumho Tire reported an operating profit of 142.6 billion won ($16.6 million) in the first half, surging 5,900% from a year ago with sales of 2 trillion won, up 23% on-year.

Its second-quarter operating profit ballooned by nearly 48 times to 88.1 billion won on a consolidated basis from the prior year on sales of 1 trillion won.

The last time Kumho Tire’s quarterly sales exceeded 1 trillion won was in 2012.

The company attributed its stellar earnings to higher sales to automakers in North America and South Korea and lower raw material costs.

Write to Nan-Sae Bin at binthere@hankyung.com
Sookyung Seo edited this article.