Kia’s EV3 set to launch in the first half of the year
High expectations for an affordable price range
Could it be more expensive than anticipated?
Kia’s exclusive electric vehicle portfolio, limited to the midsize and larger segments such as EV6 and EV9, will soon expand. News has been reported that the EV3, a subcompact electric SUV similar in size to the Seltos, will be unveiled in the first half of this year.
It is based on the Hyundai Motor Group’s electric vehicle architecture, E-GMP, but as it is an entry-level model, high expectations are being raised regarding the price. According to recent industry news, it is known that the battery type has been confirmed, but there are concerns that it is different from what was expected.
In the final stages before launch, it’s getting an NCM battery
According to a March 27 report by South Korean media outlet Edaily, Kia has been conducting an evaluation process to calculate car insurance premium rates for EV3 to launch in the second quarter of this year. The evaluation conducted by the South Korea Insurance Development Institute is a procedure to determine the standard rating for calculating insurance premiums by considering the degree of damage caused by a vehicle collision, ease of repair, and loss ratio. Since the evaluation is based on a mass-produced vehicle model with confirmed specifications and parts, it can be said that the launch is imminent. According to Edaily’s report, the EV3 is said to be being evaluated with a ternary (NCM) battery installed.
Previously, the industry predicted that EV3 would likely be equipped with Chinese lithium iron phosphate (LFP) batteries. Although it has a lower energy density than NCM batteries, it has the advantage of being about 30% cheaper, making it suitable for entry-level electric vehicles. In particular, Kia announced at the ‘2023 Kia EV Day’ event held in October 2023, “We will lead the popularization of electric vehicles with a lineup of various price ranges,” so these predictions are becoming more realistic.
A 30% cheaper LFP battery was installed in Ray EV, but…
Previously, Kia installed an LFP battery in the compact electric SUV EV5 launched in China in the second half of 2023. As a result, it attracted attention by setting a low price range of about 27 million to 31 million won (about $ 20,000 to $ 23,000), but it was announced that NCM batteries would be used in models for the South Korean market. It will inevitably be launched at a higher price in South Korea than in China.
However, since EV3 and EV4 are smaller entry-level models than EV5, there was a strong expectation that LFP batteries would be installed in models for the South Korean market. This is because a cost-effective strategy is essential when demand for electric vehicles is slowing due to a long-term economic recession. Previously, Kia’s mini electric vehicle Ray EV, launched in 2023, was also equipped with LFP batteries supplied by China’s CATL and had a low starting price of 27 million won ( about $20,000).
Impact of subsidy revision?
Will the burden on consumers increase?
However, one significant variable has emerged in the electric vehicle industry in 2024. It’s the revision of electric vehicle subsidies. According to the newly implemented subsidy standards, national subsidies are paid differentially depending on battery performance and recycling value. Accordingly, subsidies for electric vehicles equipped with LFP batteries, mainly produced by Chinese companies, have been significantly reduced. This has affected the Tesla Model Y RWD, which gained explosive popularity in 2023, and the Torres EVX, a cost-effective model among South Korean electric vehicles.
Equipping NCM batteries may be advantageous regarding subsidies, but the unit price will increase. In reality, the burden on consumers may increase. The redesigned model of the Kia Niro EV, launched in 2022, is equipped with an NCM battery and was priced at 48.55 million to 51.2 million won (about $35,976 to $ 37,940). As the EV3 is a model based on an electric vehicle platform, it may be launched more expensively than the Niro EV, based on the existing internal combustion engine vehicle, Niro. The country where the NCM battery used in EV3 is manufactured has not yet been disclosed.
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