2023-05-18 12:12:29
According to quotes from company officials and local authorities, Kia Motors is in talks to expand production lines at its Mexico plant as part of efforts to increase responsiveness to US subsidies for electric vehicles.
“We are not building a new plant, but (we are) considering transferring some of the production lines for electric vehicles,” a Kia official told the Korea Herald.
“The move is part of our response to the US Inflation Reduction Act, but the exact timetable has yet to be decided.”
The comment comes following Samuel García, the governor of Nuevo León, Mexico’s northern border state, made a surprise announcement on his Twitter earlier in the day, saying that “Nuevo León is going strong as a hub for electric mobility:
Kia once once more bets on Nuevo León with an investment to expand its plant and produce two Kia car models”.
The governor visited Seoul this week to attend a business forum, during which he is believed to have held a meeting with Kia officials.
He did not reveal the specific names of the new EV models to be produced in Mexico, but posted several photos of Kia’s upcoming EV9 full-size electric SUV along with his announcement.
He noted that the size of the investment for the Kia plant might reach one billion dollars. The Kia official declined to confirm the amount.
Kia currently operates a production facility on a 3.35 million square meter site in Pesquería, a town in Nuevo León. Completed in 2016, the plant has a production capacity of 400,000 vehicles per year. The plant currently produces Kia’s two compact sedans: the K3 and the Pride.
Nuevo León, located on the US-Mexico border, is considered an industrial capital of Mexico. Some 2,600 companies are located there, including 270 Korean companies, employing 600,000 workers.
Businesses have been increasingly investing in the state, hoping to take advantage of the IRA, which offers steep tax breaks for locally produced electric vehicles and their parts.
In February, Tesla also announced a new $5 billion plan to build a new electric vehicle plant there.
Mexico is a nascent but rapidly growing electric vehicle market that directly benefits from free trade agreements with the US and other subsidiary programs.
In the overall auto market, Kia is one of the top five automakers selling there with a market share of around 5 percent, while Hyundai ranks No. 10.
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