Kia unveiled a compact electric sport-utility vehicle and two concept EVs as it builds out a range of cheaper models to appeal to budget-conscious drivers.
Kia's EV5, pitched at millennial families, made its debut at a so-called EV Day on Thursday. For the Chinese market, the standard model will come with a 64-kilowatt-hour battery offering 530km of range, while the long-range model’s 88-kilowatt-hour battery will get 720km per charge.
The South Korean models will have slightly smaller batteries and the driving range will be tailored to market demands, the company said.
The EV5 comes with two 31cm screens for instrument displays and infotainment, and a 12.7cm climate control display.
The Chinese version will have a front bench seat, while the rear seat can be folded flat to transform into a bed.
There is also a 4-litre refrigerator and warming unit for storing food and drinks. The cars will be made at factories in China and Korea, with production starting around 2025.
Kia also displayed two concept cars – the EV3, a compact version of its flagship EV9; and the EV4, a four-door sedan that looks more like a sports car.
The three models are part of Kia’s plan to introduce smaller EVs ranging in price from $35,000 to $50,000 to accelerate the widespread adoption of battery-powered cars, the company said. Top-end models will go for up to $80,000.
Kia last month introduced its cheapest EV – the single-seat Ray, which starts at $20,000 and is only available in South Korea.
Tesla started selling its Chinese-made Model Y SUV in Korea earlier this year, priced from about 57 million won ($42,550). With government subsidies, the price drops to about $37,000 in Seoul and as low as $30,000 in some cities that offer extra incentives for EVs.
Smaller EVs are Kia’s “entry to the segment of customers” looking for electric cars with lower prices and charging convenience, chief executive Ho Sung Song told reporters at the EV Day, held in Yeoju city, south-east of Seoul. The car maker aims to sell 1.6 million EVs by 2030.
To meet that target, Kia plans to have eight production facilities by 2025. In Europe, the company will focus on making small- and medium-size EVs, while it will produce mid- and large-sized vehicles in China.
In India, it will focus on “strategically designed EV models tailored for emerging markets”, Mr Ho said, without elaborating.
Kia has to study “very deeply” how to cut EV prices further, he said.
“This is very important for us; how we can make the vehicles below around $25,000 in the market.”
“Maybe in the future, we need some different sales strategies,” such as selling vehicles without a battery, which buyers can then rent, he said.
Prices of batteries, the most expensive part of an EV, are expected to fall to $99 per kilowatt hour by 2025 as technology improves and new lithium reserves are developed, according to an October 4 report by Goldman Sachs Group analysts led by Kota Yuzawa.
He upgraded Kia’s stock to a buy on improving margins as battery costs decline.
Kia and affiliate Hyundai Motor sold about 374,000 EVs in the first eight months of 2023, ranking seventh globally, according to a report from SNE Research.
Their combined market share of the global EV market, including electric and plug-in hybrid vehicles, has fallen to 4.3 per cent this year from 5.4 per cent in 2022, due to the strong growth of China’s BYD, the research group said.
Mr Ho said Kia may introduce a compact model EV2 in Europe. The EU has started an investigation into China’s EV subsidies, which could result on tariffs being imposed on made-in-China cars and potentially benefit the South Korean firm.
“EV2 is very unique, very important model for European market,” he said. “EV2 is very European style and it will be produced in Europe.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
RESULTS
5pm: Wathba Stallions Cup – Maiden (PA) Dh70,000 (Dirt) 1,400m
Winner: Yas Xmnsor, Sean Kirrane (jockey), Khalifa Al Neyadi (trainer)
5.30pm: Falaj Hazza – Handicap (PA) Dh70,000 (D) 1,600m
Winner: Arim W’Rsan, Dane O’Neill, Jaci Wickham
6pm: Al Basrah – Maiden (PA) Dh70,000 (D) 1,800m
Winner: Kalifano De Ghazal, Abdul Aziz Al Balushi, Helal Al Alawi
6.30pm: Oud Al Touba – Handicap (PA) Dh70,000 (D) 1,800m
Winner: Pharitz Oubai, Sean Kirrane, Ibrahim Al Hadhrami
7pm: Sieh bin Amaar – Conditions (PA) Dh80,000 (D) 1,800m
Winner: Oxord, Richard Mullen, Abdalla Al Hammadi
7.30pm: Jebel Hafeet – Conditions (PA) Dh85,000 (D) 2,000m
Winner: AF Ramz, Sean Kirrane, Khalifa Al Neyadi
8pm: Al Saad – Handicap (TB) Dh70,000 (D) 2,000m
Winner: Sea Skimmer, Gabriele Malune, Kareem Ramadan
