Kia to produce EV3 in Mexico for first time, with president's blessing

Mexican President Claudia Sheinbaum (third from left) delivers welcoming remarks on Kia's local investment plan at a regular press conference held Wednesday (local time) at the National Palace in Mexico City. From left: Economy Minister Marcelo Ebrard, Deputy Minister of Industry and Trade Ximena Escobedo, Kia Mexico CEO Kim Young-sam, Kia Mexico administrative support director Marianela Calderón, and Kia Mexico sales director Horacio Chávez. [Mexican presidential office]

Kia will produce electric vehicles in Mexico for the first time, converting an existing production line to manufacture the EV3 compact electric SUV while simultaneously targeting both the domestic Mexican market and export markets.

According to the Mexican government and Reuters, Kia will invest a total of $649 million in Mexico from 2026 through 2028.

Kia is set to begin EV3 production at its plant in Pesquería, Nuevo León, on Tuesday. Rather than building a separate electric vehicle factory, the company will retrofit its existing production line to accommodate EV manufacturing.

Kia Mexico CEO Kim Young-sam (left) and Mexican Economy Minister Marcelo Ebrard pose with a "Made in Mexico" certificate at an EV3 unveiling event held Wednesday (local time) in Mexico City. [AFP]

The EV3 is currently produced at Kia's EVO Plant in Gwangmyeong. Once Mexican production begins, the EV3's manufacturing base will expand from a single South Korean site to a dual production setup spanning South Korea and Mexico.

The Pesquería plant currently produces the K3 and K4 models and has an annual production capacity of about 400,000 vehicles. Kia has not disclosed the specific annual production volume planned for the Mexican-built EV3 or whether it will adjust domestic output.

Mexico's president also welcomed Kia's local electrification strategy, calling it "an investment that shows trust in Mexico."

At a regular press conference, President Claudia Sheinbaum said, "Kia's investment shows confidence in our country," adding that it was "good news in that it can accelerate Mexico's electrification transition through electric vehicle production and the development of charging infrastructure."

She added that a significant portion of the EV3 units produced in Mexico would be supplied to the domestic market. The Mexican government said it plans to expand the distribution of locally produced electric vehicles while also building up the related components and technology base.

Economy Minister Marcelo Ebrard said the EV3, previously produced exclusively in South Korea, would now also be made in Mexico, adding that "locally produced units will also be used for exports."

Mexican Economy Minister Marcelo Ebrard inspects the interior of an EV3 at an unveiling event held Wednesday (local time) in Mexico City. [AFP]

According to local Mexican media, the EV3's initial local parts procurement rate will start at around 27 percent and is expected to rise gradually. Specific export destinations have not been disclosed, but supplying neighboring markets such as Latin America — in addition to Mexico itself — has been discussed.

Horacio Chávez, Kia Mexico's sales director, said "Mexico has the conditions needed for the electrification transition," adding that "EV3 production will be an opportunity to meet the demand of Mexican consumers and introduce new technology."

Beyond the EV production line, Kia will also invest in building charging infrastructure across Mexico. At the Pesquería industrial complex, the company plans to construct a 2-megawatt solar power facility and install a wastewater treatment system capable of recycling 1,050 cubic meters of water per day.

The Kia logo is displayed at the Pesquería plant in Nuevo León, Mexico, on Wednesday (local time), the day the company announced its plan to produce the EV3 locally. [Reuters]

The Mexican government projected that the investment would create 500 new jobs this year, with cumulative direct employment reaching 1,500 positions between 2027 and 2030.

The announcement comes as the United States moves to tighten rules of origin requirements for North American-made vehicles. Mexico has said it needs to reduce its dependence on the US market and secure new export markets and electric vehicle technology.

Kia's decision to produce the EV3 in Mexico is seen less as a retreat from the US market and more as a strategy to diversify production bases in line with regional demand. Separately from its Mexico investment, Hyundai Motor Group is also expanding finished-vehicle production capacity in the United States and investing in the localization of auto parts there.

kwater@heraldcorp.com