Kia to boost hybrid lineup to lead eco-friendly car market

Kia Corp., South Korea’s second-largest automaker, plans to strengthen its hybrid lineup and launch cheaper electric vehicles to lead the global eco-friendly automobile market with its affiliate Hyundai Motor Co. amid the slowing growth in the world’s EV industry.

Kia said on Friday it aims to more than triple eco-friendly car sales to 2.48 million units in 2030, which is expected to make up 58% of its total sales of 4.3 million units, including 817,000 hybrid models, from the targeted 761,000 clean vehicles this year. The maker of the all-electric sport utility vehicle EV9 maintained its 2030 EV sales target of 1.6 million units unveiled last year.

The smaller automaking unit of Hyundai Motor Group sold 576,000 eco-friendly vehicles, including 394,000 hybrid cars, in 2023.

“We will effectively deal with changes in the automobile market to implement mid- to long-term strategies,” Kia Chief Executive Song Ho-Sung told analysts and shareholders during its 2024 CEO Investor Day in Seoul.

Global automakers shifted their eco-friendly vehicle strategies to focus on hybrid cars as EV growth has recently lost steam on shrinking demand.

Kia reiterated its long-term goal of electrification with massive investments, however. The company plans to spend 38 trillion won ($28.1 billion), including 15 trillion won for future businesses, by 2028, raising its total investments by 5 trillion won compared to its previous plan for the 2023-2027 period.

The company earmarked 65% of the total spending for electrification, 19% for electric purpose-built vehicles (PBVs), 8% for software-defined vehicles (SDVs) and 5% for advanced air mobility and robotics.

MORE HYBRID MODELS, CHEAPER EVS

Hyundai Motor Group’s total eco-friendly vehicle sales are expected to top 5.5 million units in 2030 if Kia’s affiliate Hyundai Motor Co., which announced a goal to sell 2 million EVs in the year, sets a similar sales target for hybrid models.

Kia plans to introduce hybrid-electric trims for six models this year, eight in 2026 and nine in 2028, more than doubling sales of those eco-friendly vehicles to some 800,000 units during the period.

The company is set to launch the EV2, a new low-cost electric model with a plan to introduce six affordable EVs including the EV3, the EV4 and the EV5. The EV3 is slated to hit the road in the first half of this year.

The maker of the electric mid-size crossover utility vehicle (CUV) EV6 aims to raise its EV sales to 307,000 units this year, 1.15 million units in 2027 and 1.6 million units in 2030. It sold 182,000 EVs last year.

Kia plans to establish a full EV lineup with 15 models including PBVs. It is scheduled to launch the PV5, its first midsize PBV, in 2025 followed by a larger PV7 in 2027, with sales targets of 150,000 units and 100,000 units, respectively in 2030.

CHINA FOR EMERGING MARKETS

The South Korean automaker, which has been struggling in China, plans to use its factory in Yancheng to ramp up its sales in other emerging markets.

Kia aims to more than triple sales in the Asia-Pacific, the Middle East and Central and South America markets where Chinese automakers are looking to expand their presence to 250,000 vehicles by 2027 from 80,000 units last year.

Kia also plans to boost connected services to those markets, providing connected functionalities in 74 countries by 2026. The company is also slated to increase the number of models featuring over-the-air (OTA) technology to 18 to deal with Chinese vehicles’ software technology while raising the installation rate of advanced driver assistance systems (ADAS) to more than 63% of its vehicles.

The company reiterated its business goals for this year. It aims to achieve 12 trillion won in operating profit on sales of 101.1 trillion won in 2024, up 3.4% and 1.3% from last year, respectively. That will raise its operating profit margin to 11.9%, up 0.3 percentage point from last year.

Kia plans to buy back 500 billion won worth of treasury shares in the next five years and retire half by the end of June to boost shareholder value. If it successfully achieves its 2024 sales and profit targets, it will retire the remaining 50% of the repurchased treasury shares by the end of this year.

Write to Jae-Fu Kim, Nan-Sae Bin and Jin-Won Kim at hu@hankyung.com
 
Jongwoo Cheon edited this article.