The EV9 ADVNTR (Image courtesy of Kia)
SEOUL, Nov. 18 (Korea Bizwire) – Kia has significantly scaled back production of its EV9 electric SUV at its Georgia plant, as the automaker navigates stricter U.S. tax credit requirements and awaits the completion of local battery manufacturing facilities.
According to Kia’s sales data, only 21 EV9s were produced at the Georgia plant through the third quarter of 2024, with just one vehicle sold in the U.S. market. Production began in August with 10 units, followed by 11 in September.
The measured pace stands in stark contrast to the average monthly U.S. sales of about 1,800 EV9s, with the vast majority currently being imported from Kia’s factories in South Korea. The Georgia facility has yet to begin full-scale production of the electric SUV, despite earlier plans.
The company had initially announced a $200 million investment in July 2023 to begin EV9 production at its Georgia facility. At the New York International Auto Show in March, Kia set May as the target date for production launch.
True to this timeline, on May 30, the company held a ceremony marking the start of EV9 production, attended by Sean Yoon, head of Kia’s North American operations.
Only 21 EV9s were produced at the Georgia plant through the third quarter of 2024. (Image courtesy of Kia America)
The production slowdown comes as automakers grapple with stricter requirements for tax credits under the Inflation Reduction Act (IRA).
Starting this year, electric vehicles using Chinese battery components are completely excluded from federal subsidies, as the U.S. government has designated virtually all China-based companies as Foreign Entities of Concern (FEOC).
“While we can produce the EV9 at our Georgia plant, battery-related issues mean we would only receive half of the maximum $7,500 tax credit,” a Kia representative explained. “There’s no need to rush.”
The representative also noted that the Georgia plant uses a mixed production system, manufacturing both electric and combustion engine vehicles on the same line.
“Gradually transitioning the production line is more cost-effective than making immediate changes,” they added.
Through the third quarter, the Georgia facility has maintained robust production of conventional vehicles, manufacturing 96,768 Tellurides, 88,319 Sportages, 82,455 Sorentos, and 1,337 K5s, excluding the EV9.
Industry analysts expect Kia to ramp up EV9 production once its joint battery manufacturing ventures in Georgia are operational. Hyundai Motor Group, Kia’s parent company, is building two battery plants in the state: a 35 gigawatt-hour (GWh) facility with SK On and a 30 GWh plant with LG Energy Solution. Both are scheduled to begin operations next year.
However, recent reports that President-elect Donald Trump’s transition team is considering repealing IRA electric vehicle subsidies have raised concerns about potential disruption to Kia’s plans. The possibility of prolonged stagnation in electric vehicle demand adds another layer of uncertainty.
In a related development, Hyundai Motor Group is reportedly considering producing hybrid vehicles at its dedicated electric vehicle plant, Hyundai Motor Group Metaplant America (HMGMA), in Georgia, suggesting a broader industry reassessment of electric vehicle production strategies.
Kevin Lee (kevinlee@koreabizwire.com)
