Kia

• Kia’s cheap EV2 will hit the streets next year at an expected price of around $35,000.
• Critics still want something cheaper, but Kia’s European boss warns that it’s not in the business of discount EVs.
• He says that the brand has no interest in competing with China: “It’s not my job to fight the Chinese on price.”

If you’ve been hoping that Hyundai or Kia would be the world’s saving grace with some sub-$26,000 people’s EV, you should go ahead and lower those expectations now. The South Korean automaker has run the numbers and, folks, the juice just isn’t worth the squeeze—at least not yet.

Kia is expected to start production of its cheapest car yet, the EV2, in February. The tiny electric crossover is unlikely to come to the U.S., but its starting price is expected to be around $35,000. That makes it Kia’s cheapest BEV. Sadly, it’s also unlikely that the world will get an even cheaper EV after that, at least not anytime soon.

Photo by: Kia

In an interview with Automotive News, the head of Kia’s European unit, Marc Hedrich, put it plainly: the brand isn’t interested. There’s not enough profit margin for it to make sense, and in order to get to the point where Kia would even consider making a limited profit, it would need to make significant sacrifices to the vehicle (which seems to bode well for Slate, at least on paper).

“We are not at price parity with ICE cars as [of] yet,” said Hedrich in an interview with Automotive News. “EVs also still aren’t generating the same margins as ICE cars. That said, we might have an EV1 one day, but Kia—which is one of the [world’s most] profitable automakers—has zero interest in not making enough money.”

Hedrich added, “To sell an EV even at €22,000, you have to make compromises on content, which is not something Kia is interested in doing.” That’s about $26,000 at the current exchange rates, and the target price for the upcoming Volkswagen ID. Every1. 

If Kia can’t do it, China will. EV brands from China are looking to explode onto the European scene with might, which is kind of scary considering how much car you can get for under $10,000 in BYD’s home market. It’s also a knock on death’s door for imports of American EVs, which are already facing a reputation problem of their own.

Hedrich’s response? Let them try. “The Chinese are going to grow, but they will eventually reach a ceiling, like everybody,” he said. “Yes, there are customers who will go for the cheapest car on the market, but there are also people who will never purchase a Chinese car… It’s not my job to fight the Chinese on price, because if I do, then we would disappear—because the Chinese have much larger economies of scale than us.”

Kia’s message here is clear. You’ll get an affordable EV, but you won’t get a dirt-cheap one. The automaker clearly wants to survive the transitions to EVs, especially in Europe, just with cash in the bank and a brand that isn’t known for being found on the bottom shelf. So if you want the car, take Hedrich’s unsaid advice and look elsewhere.

It feels like some automakers are trying to squeeze water out of a rock. The mission of a cheap EV seems great on paper, but when you really look at what the race to the bottom really means, you start to see that corners are cut, features are missing and reality sets in that a cheap EV really is just that: a cheap car.

Some brands want to be known as the Walmart of cars, where low prices reign supreme. And others? Well, eventually they put the rock down and start searching higher up the tree for some fruit. And Kia has already started climbing.