Kia has announced plans to introduce a more affordable electric vehicle, potentially starting at around $25,000, but the realization of this goal hinges on profitability. The automaker’s European operations chief, Marc Hedrich, stated that while the company is launching several lower-priced electric models, a budget-friendly EV1 may only materialize if it proves financially viable.
The upcoming electric crossover SUV, the EV2, is set to begin production at Kia’s Slovakian plant in February 2026. This model is anticipated to be priced below €30,000 (approximately $35,500) and will be positioned beneath the EV3, which is currently priced starting at €35,990 (around $40,700) in Europe. According to Hedrich, Kia has a strong interest in maintaining profitability, stating, “we might have an EV1 one day,” but emphasizing the necessity of financial success in the electric vehicle market.
Kia, recognized as one of the most profitable automakers globally, is cautious about introducing a low-cost EV that could compromise quality. Hedrich underscored the challenges of maintaining profitability while investing heavily in necessary technologies, referring to this phase as an “investment cliff.” He noted that selling an EV for as low as €22,000 would require compromises on features, which Kia is not prepared to make.
As Kia navigates the competitive landscape, the company faces pressure from a surge of lower-priced electric vehicles entering the European market, particularly from Chinese manufacturers like BYD, MG, and Geely. In response to questions about how Kia plans to compete, Hedrich acknowledged the growing presence of these brands but expressed confidence that they will eventually encounter limitations in their growth. He emphasized the importance of “brand equity,” stating, “it’s my job to fight the Chinese on price.”
Despite this competitive pressure, the Kia EV3 emerged as the best-selling retail electric vehicle in the UK during the first half of the year, reflecting the brand’s strong performance in the market. With the rollout of additional models like the EV4 and EV5, Kia aims to bolster its position and appeal to a wider range of consumers.
As the automotive industry evolves with the transition to electric vehicles, Kia’s strategic focus on affordability and quality will be crucial in maintaining its competitive edge. The anticipated arrival of the EV2 marks a significant step toward offering more accessible electric options while ensuring profitability remains at the forefront of its business model.
