Kia’s parent company Hyundai Group plans to build a dedicated electric vehicle plant at Kia’s Monterrey factory in Mexico to take advantage of tax credits from the US Inflation Reduction Act.
In a tweet, Governor of Nuevo León Samuel García said: “More good news! Nuevo León consolidates as the electromobility hub: KIA once again bets on Nuevo León with an investment to expand its plant and produce two KIA car models.”
The news came as Garcia visited Korea for the Korea-Latin America Future Cooperation Forum this week.
“With this new investment we will be the state that produces the most electric car models: the Tesla model, the KIA model and the Navistar electric truck,”
“We are fulfilling what we promised: to generate sustainable wealth without neglecting the environment. Cheer up!” said the Governor.
Con esta nueva inversión seremos el estado que más modelos de autos eléctricos produzca: el modelo de Tesla, el de KIA y el camión eléctrico de Navistar.
Estamos cumpliendo lo que prometimos: generar riqueza sostenible sin descuidar el medio ambiente. ¡Ánimo!
— Samuel García (@samuel_garcias) May 16, 2023
Kia’s existing Monterrey Plant in Nuevo León produces around 400,000 ICE vehicles per year including the Kia Forte, Kia Rio and the Hyundai accent for the US market.
The new investment, which is estimated to be around $US1 billion, is for an expansion of the existing factory to produce Kia and Hyundai EVs, possibly including Kia’s EV9 SUV which García posted a photo of in his tweet.
The 35 year old Governor is setting up his state up to become a global EV powerhouse. In March García also secured Nuevo Leónis a revolutionary new Tesla gigafactory which will produce millions of Tesla’s 3rd generation electric vehicles.
— Samuel García (@samuel_garcias) March 2, 2023
Mexico is becoming an attractive place for car companies to build EV factories. Electric vehicles produced in Mexico are eligible for US IRA subsidies including $US7,500 EV tax credits and advanced manufacturing production credits which provide subsidies of $35 per kWh for the manufacture of batteries.
In April the Hyundai Group announced its intention to become one of the top 3 EV makers in the world by 2030.
The group says that by 2030 it will have a total lineup of 31 EV models. The Kia EV9, its first three-row seat electric flagship SUV, will go into production this year and Hyundai Motor plans to launch the Ioniq 7 in 2024.
While the US is Hyundai Group’s biggest market, many of its EVs aren’t eligible for the IRA tax credits. The new Mexican factory changes this and should enable the group to increase its EV market share in the US.
Daniel Bleakley is a clean technology researcher and advocate with a background in engineering and business. He has a strong interest in electric vehicles, renewable energy, manufacturing and public policy.