The Kia EV4 is supposed to be the company’s affordable EV sedan. Hyundai’s Ioniq 6 is already one of the best EVs on sale, and a Kia version with sharper styling, a lower price and better tech could be a great option for many buyers. But Kia just confirmed to journalists that U.S.-market EV4s will be built in South Korea.
The K4’s product planner said that EV4 sedans will only be made in Korea, while hatchbacks will be made in Slovakia. “For now, we are planning to introduce only the sedan for North America,” she added.
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Source: Kia
That will make the “lower price” component tricky. Vehicles imported to the United States from outside of North America face additional 25% tariffs imposed by President Donald Trump. Since the Ioniq 6 is built there, it’ll be affected too, meaning it may be tougher for Hyundai to match the price of U.S.-built rivals like the Tesla Model 3. I had hoped that the EV4 would be built in the U.S. to address this, as Kia has a flexible manufacturing footprint in the U.S. But the company is likely doing what most companies do: Save precious U.S. manufacturing resources for the profitable, larger SUVs.
Ironically, this means that it’s the cheapest cars that are bearing the brunt of new taxes.
And that isn’t even its only problem.
Like so many exciting new EVs, the EV4 is arriving at a time when the future of the $7,500 federal tax incentive is deeply in doubt. With at least one House of Congress and the President behind it, the latest Congressional budget plans to phase it out. Now, because it won’t be built in the U.S., the EV4 was already going to be ineligible for the tax credit for people who purchase it. Confusingly, however, all EVs still qualify for the credit if they are leased. That’s part of why Hyundai has offered incredible lease deals on the Ioniq 6.
But the so-called “leasing loophole” is likely to get closed this year. That makes the affordability problem much tougher to solve. Kia will have to pay 25% more to import the cars already, and then lose access to the massive $7,500 incentive as well. All of that will make it extremely difficult to sell the EV4 at an affordable price and profitably at the same time.
The EV3 crossover is also supposed to come to the U.S. with an affordable price tag, but it still hasn’t arrived.
Photo by: Kia
Perhaps this is why we still don’t know how much the EV4 will cost. Kia must now choose between how much it wants to raise prices and how much it is willing to eat in losses on each car. Moreover, the company has to decide this without knowing whether the 25% tariff is a negotiating tactic or a long-term fixture of U.S. policy.
That makes it a tough time to be an automaker. But it’s also a tough time to be a consumer. Buyers need to plan out their purchases, and with so many companies promising compelling affordable EVs but so few able to deliver, it’s getting harder to wait. The good news is that the EV tax credit still does exist, and if you want an affordable car in the meantime there are great options like the Kia Niro EV, Chevy Equinox EV and the Hyundai Kona Electric. Not only that, but used EVs are cheaper and better than ever. So regardless of what happens with the trade war, the affordable EV dream won’t die.
Brian Silvestro contributed reporting.
Contact the author: Mack.Hogan@insideevs.com
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