Korean maker is keen to bring EVs into Australia but there are some surprising hurdles to clear.
Strong global demand for electric vehicles may unplug Kia’s plans to release an EV in Australia early next year.
Chief operating officer Damien Meredith says the brand may have to look at hybrid vehicles as an interim measure because Europe and the United States are snapping up global production of EVs.
“Globally EVs are under pressure in regards to supply and demand. I’d love to think that we could have just an EV strategy but if supply kills us, we might have to change the strategy,” Meredith says.
Sales of EVs were up by an estimated 81 per cent in the US last year, with more than 350,000 sold, according to website Inside EVs. For Europe, sales estimates are slightly higher.
In Australia, buyers bought roughly 1350 EVs, out of a total of more than 1 million new cars.
Meredith says EV sales overseas are being assisted by government subsidies and incentives, while Australia has been reluctant to give legislative support for the technology.
“People in headquarters around the world look at what’s happening in western Europe or North America and say, ‘OK well they are putting these things into place, we’ll put the cars there’,” he says.
Unless government policy changes, he believes Australian EV sales will remain small — at less than 5 per cent of the total market — for up to a decade.
But he doesn’t see that as necessarily a bad thing. “I’m a great believer in the less government interference the better.”
Kia sells two EVs in the United States, the Soul and the Niro, but head office hasn’t yet decided on which to bring in to Australia.
Meredith acknowledges that neither are likely to be sales hits but believes there is a social responsibility to explore the technology.
“You’re not going to break a sales record with EVs or hybrids at the moment but I think there’s a responsibility that we’ve got to have cars in place that are environmentally friendly,” he says.
There are other hurdles to EVs in Australia. Car dealers are unlikely to embrace the technology because EVs require fewer visits to the dealership, potentially denting profits.
“From a return on investment point of view, what do we do with the dealer network?” he says. “As EVs continue to grow in volume, the dealer profitability is at risk.”
Despite the hurdles, the current plan — supply permitting — is to have an EV on sale early next year, potentially launching during the Australia Open tennis, which Kia sponsors. The fallback position would be hybrids.
“If we can get supply of EVs, there won’t be hybrids,” Meredith says.
Extracted from News.com.au