Kia to enter emerging markets with its latest EV5 made in China

Kia Corp., South Korea’s second-largest automaker, plans to enhance its presence in emerging markets with the EV5 compact SUV, the company’s first China-made all-electric vehicle.

According to industry sources on Wednesday, Kia has begun producing the right-hand drive model of the EV5 at its Chinese plant in Yancheng, Jiangsu Province, bound for Thailand, Australia and New Zealand.

Starting from the Southeast Asian and Oceanian markets, the automaker plans to expand its target markets to Latin America and the Middle East, including countries such as Mexico and Saudi Arabia, sources said.

The EV5 is price-competitive as the vehicle is equipped with low-priced lithium iron phosphate (LFP) batteries. Production costs are also competitive as Kia’s Chinese factory is nearly fully automated, they said.

The EV5 compact SUV is Kia’s third model that sits on Hyundai Motor Group's dedicated EV platform, the E-GMP, following the EV6 sedan unveiled in 2021 and the large-size EV9 launched in June 2023.

The EV5 can run up to 720 km on a single charge.

Kia, a sister firm of Korea’s top automaker Hyundai Motor Co., launched the EV5 in China late last year.

Kia premiered the EV5’s design at the Chengdu Motor Show, where it also showcased nine other EV models, including the EV6 and high-performance EV6 GT.

CHEAPER THAN COMPETITOR TESLA MODEL Y

The price of the EV5 starts at 149,800 Chinese yuan ($20,700) in the Chinese market, at least $14,770 cheaper than Tesla Inc.’s Model Y, a Kia competitor.

Kia has set the price of the EV5 bound for New Zealand, where it recently began accepting pre-orders, at NZ$67,990 (US$41,205)

The price tag for the New Zealand market is higher than in China, but the EV5 is still competitive versus rival models, given shipping costs and import tariffs, industry officials said.

The EV5 will also be priced at similar levels in Thailand and Australia, sources said.

Kia said the EV5 brings a new era of electric mobility to the compact SUV sector to meet the needs of millennial families.

The company said it drew inspiration for its latest EV from the brand’s “Opposites United” design philosophy that embodies its shift toward electrification.

To enhance its front exterior design, the EV5 incorporated three-dimensional “Signature Star Map Lighting,” its daytime running lights. Inspired by star-studded constellations, the EV5 introduces a dynamic shape along the lamp line, emphasizing the new vehicle’s “Tiger Face” design.

EQUIPPED WITH LFP BATTERIES MADE BY BYD’S FINDREAMS

The Kia EV5 is equipped with blade-type LFP batteries made by FinDreams Battery Co., a subsidiary of China’s top EV maker BYD Co.

Demand for LFP cells is growing amid rising battery raw material prices and electric car makers’ penchant for low-end models. Compared with NCM or nickel-cobalt-manganese batteries, LFP batteries are more stable, making them less vulnerable to fire, although they are lower in energy density.

A Kia executive recently said at an investor meeting that the company expects to cut battery prices by at least 20% with increased adoption of LFP batteries in its vehicles.

In August 2002, Kia established a joint venture with Dongfeng Motor Corp. and Yueda Group to run the Yancheng plant with an annual production capacity of 890,000 vehicles.

The Korean carmaker, however, has been struggling in China amid aggressive marketing by global rivals and in the aftermath of a diplomatic dispute between Seoul and Beijing over the deployment in Korea of THAAD, a US anti-missile system, in 2017.

With declining demand for its models in China, Kia rented part of the Yancheng plant to Yueda Group to cut operating costs.

Kia plans to produce about 300,000 EV5 units at the Yancheng plant this year and export half of them to other countries.

The planned export volume, 172,000 units, is more than twice last year’s outbound shipments of 80,000 units.

“We have completed our production system for exports at the Chinese plant. We expect annual exports from the Yancheng plant to reach 250,000 units by 2027,” said Kia Chief Executive Song Ho-sung.

Write to Jin-Won Kim at jin1@hankyung.com

In-Soo Nam edited this article.