Kia Q3 Earnings Conference Call
"Next Year and the Year After, Record Number of New Car Launches"
Jung Sung-guk, Executive Vice President in charge of IR at Kia, said on the 25th, "Once EV6 and EV9 start local production (at the U.S. factory), they will receive 100% of the (tax credit) benefits."
After announcing the Q3 business results, Jung stated during the conference call, "The Meta Plant, Hyundai Motor Group's new factory in the U.S., has not yet finalized the production models," adding this. The large electric sports utility vehicle (SUV) EV9 has been produced at the Georgia plant since August this year. In addition, the plan is to produce the compact SUV EV6 next year.
According to the U.S. Inflation Reduction Act (IRA), electric vehicles sold at retail can qualify for a $7,500 (approximately 10 million KRW) tax credit based on battery origin, local production, income level, and other factors. Kia had not received this benefit because it exported electric vehicles from Korea. If included in the tax credit eligibility starting next year, it can save on incentive costs accordingly. Jung added, "Depending on battery supply, we plan to first receive half of the (tax credit) and then quickly receive the full $7,500."
He stated that there will likely be no changes to the production models at North American plants depending on the U.S. presidential election results. Former President Trump, the Republican candidate, has openly mentioned that if elected, he would revise the tariff-free agreement with Mexico. Kia plans to introduce various models at its Mexico plant, and the industry highly anticipates electric vehicle possibilities there.
Jung said, "Tariffs and production locations are the result of long-term demand and production optimization," and "Even when political variables were anticipated in the past, they were never actually implemented." He added, "We do not make strategies based on political forecasts," and "Since the products have excellent marketability, we can respond flexibly."
They plan to launch various new models over the next one to two years. Joo Woo-jung, Head of Kia's Finance Division, said, "Considering the company's history, 2025 and 2026 will have the most new model types," adding, "The India micro SUV, pickup truck Tasman, successor models of Telluride and Seltos, EV4, PV5, and others will be released sequentially, providing an opportunity for another leap forward."
Although electric vehicles have relatively lower profit margins per unit, the company will not artificially reduce electric vehicle production to improve profitability. Joo stated, "We are not a company that sacrifices sales for profitability," and "The basic principle is to produce and supply where there is demand and conduct sales activities accordingly." He added, "We have launched the EV3, and volume models such as EV4 and EV5 are scheduled to be added after next year."
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