Kia plans to invest $1 billion in a new EV manufacturing plant in Mexico

Kia will develop a new electric vehicle (EV) plant in northern Mexico, according to a Mexican governor on Tuesday. While he did not go into specifics, such as which models will be produced in the new plant, the governor did share a snapshot of Kia’s EV9 SUV. He first stated that the investment may be worth around $1 billion, but later removed the statement from the tweet.

“There’s more excellent news! Nuevo Leon consolidates as the ELECTROMOBILITY HUB: KIA once again invests on Nuevo Leon with an investment to expand its facility and produce two KIA automobile models,” tweeted Samuel Garcia, governor of Nuevo Leon earlier in the day. According to the Yonhap news agency, he was in Seoul for an international meeting aimed at fostering collaboration between South Korea and Latin America.

Kia stated that it was looking at the issue in the medium to long term, but that nothing has been resolved as of yet. Kia established a 3 million-square-foot plant in Pesqueria, Nuevo Leon, near Monterrey, in 2016, which also incorporates education and testing centres. The plant is expected to produce 400,000 units per year of two models: the K3 sedan and the subcompact Pride.

A new EV plant, which is likely to be built near the existing facility, will allow Kia to qualify for federal incentives under the Inflation Reduction Act (IRA), which provides tax credits of up to $7,500 to customers of EVs made in the United States, Mexico, and Canada.

Hyundai Motor, its smaller affiliate Kia, and auto parts maker Hyundai Mobis Co. said this month that they will invest 24 trillion won (US$17.9 billion) to become the world’s third largest EV manufacturer by sales by 2030. Hyundai Motor and Kia intend to sell approximately 2 million and 1.6 million all-electric vehicles by that year, respectively.