Following the news that South Korean automaker Kia Motors has revealed sketches of seven battery electric vehicles (BEVs) to be launched by 2027;
Animesh Kumar, Director of Automotive Consulting at GlobalData, a leading data and analytics company, offers his view:
“Kia’s plans to launch new BEVs over a span of next seven years is aligned with the new business priorities that the company announced at the beginning of the year. The company’s mid-to-long-term strategy ‘Plan S’ intends to invest a total of US$25bn in the course of next five years on the development and production of full EV line-up as well as next-gen mobility services. By 2025, Kia plans to expand the portfolio of BEVs to 11 models and achieve 20% BEV share in its total vehicle sales in the advanced markets including South Korea, Europe and North America. Kia intends to launch its first dedicated new BEV model in 2021.
“EVs offer significant untapped potential to Kia both in the domestic and the overseas markets such as Europe and North America. Despite the COVID-19 crisis, EVs fared well when compared to other passenger vehicles. The availability of incentives/grants on EV purchase and favorable tax regime have created more awareness and demand for EVs. Furthermore, the COVID-19 led upsurge in demand for personal mobility has led to increased appetite for EVs in the advanced markets. During H1 2020, EV sales in Europe grew by 57% despite 37% decline in the overall light vehicle market due to COVID-19. EV sales in South Korea also increased by 23% in H1 2020 due to government’s subsidy program for EVs.
“The ramp up of EV production could also be a strategy to counter the rapid growth of EV giant Tesla in the domestic and overseas markets. Tesla’s market share in EV sales in South Korea and the US stood at 43.3% and 81.6%, respectively, in H1 2020. The widening of EV line-up is also set to give competitive benefit to Kia in Europe, which is a key playground for company’s EV business. The company’s EV sales (including BEV, PHEV & HEV) grew by 20.8% Y-o-Y in Q1 2020, accounting 19% share of total vehicle sales in Europe.
“Kia’s plan to launch a global range of BEV models, along with focus on creating an ecosystem, which includes charging infrastructure, after service infrastructure and new mobility services such as vehicle subscription, car rental and battery leasing, will help it to establish leadership position in the global EV market. The company’s recent collaboration with tech giants and regional governments is expected to supplement the company's EV vision of achieving 500,000 EV sales by 2026.”