Kia breaks ground on Hwaseong EV plant, plans huge investments

Hyundai Motor, Kia and Hyundai Mobis will pour a combined 24 trillion won ($18.15 billion) into domestic electric vehicle (EV) production and development by 2030.

President Yoon Suk Yeol, center, and Hyundai Motor Group Executive Chair Euisun Chung, left, shake hands during a groundbreaking ceremony held in Hwaseong, Gyeonggi, on Tuesday [YONHAP]

Hyundai Motor, Kia and Hyundai Mobis will pour a combined 24 trillion won ($18.15 billion) into domestic electric vehicle (EV) production and development by 2030.

The goal is to ramp up annual domestic EV production from last year’s 330,000 units to 1.51 million by 2030, of which 920,000 units will be exported. The 1.51 million figure is about 41 percent of the global EV production target for carmakers by 2030.

The companies aim to become one of the three largest EV manufacturers in the world.

The announcement came in as Kia broke ground for its new EV production plant in Hwaseong, Gyeonggi, Tuesday.

The plant will be Korea’s first production facility built from the ground up for EV production, according to Kia. It is also Kia's first ground breaking for an auto manufacturing plant in 29 years.

President Yoon Suk Yeol, who attended the groundbreaking ceremony held at the Hwaseong site, promised "active policy support in R&D, tax and more" from the government "to push up Korea's EV production capacity by five times the current figure by 2030."

Yoon also promised to turn the southern region of the Gyeonggi province, where Hwaseong is located, into the leading industry cluster for EVs, semiconductors and IT products.

The initiative is part of a 550-trillion-won government proposal announced last month.

On March 15, the government named six industries — connected cars, semiconductors, robots, EV batteries, biopharmaceuticals and robots — as targets for 550 trillion won of private-led investments by 2026.

At the 1-trillion-won Hwaseong plant, Kia will produce electric-powered Purpose-Built Vehicles (PBV), which can be customized in line with client demand. A PBV is designed for specific applications, such as shuttle services, last-mile delivery and ride-hailing.

The plant will be built at a 30,000 pyeong (24.5 acre) site and begin commercial operation in the second half of 2025, with an annual production capacity of 150,000 vehicles.

Kia plans to introduce its first PBV model, which will be a mid-size vehicle, in 2025 and later produce large-size and micro-size models at the Hwaseong plant.

With the latest investment decision, Hyundai Motor, Kia and Hyundai Mobis aim to increase domestic EV production and research capacities.

The 24-trillion-won budget will be spent to boost production by building new plants or turning the existing facilities for combustion engine cars into EV manufacturing lines, as well as on research and development.

The companies also plan to deploy 3,000 ultra-fast EV chargers by 2025.

Hyundai Motor and Kia hope to have a combined 31 EV models available by 2030. Kia will release EV9, its first three-row electric SUV, this year, while Hyundai Motor plans to roll out Ioniq 7 next year.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]