Kia And Hyundai To Blaze The Way For More Affordable EVs, Outside The US Market

But what is the average price of a new car in the US? According to Fortune magazine, the average price is over $47,000, though it is expected to decline throughout 2024. Regardless, many people shopping for a new car (perhaps even most people) would say that $47,000+ is not affordable. Previously, I have used a price range of $25,000 - $35,000 to describe “affordable”.

In terms of electric vehicles (which usually cost less to fuel and maintain than gas powered cars) I also pointed out that there are no less than 18 such vehicles currently on sale or expected to go on sale this year, in the US market.

While that price range is reasonable to consider as “affordable”, it is still likely to be unattainable for a large number of shoppers in the US who might consider the $25,000 low end as the limit of what they can afford. As such, there is ultimately going to be a race, among car manufacturers, to offer fully electric vehicles (EVs) that cost $25,000 or less. 

Tesla, the current EV sales leader in the US, recently put its plans for a $25,000 EV on ice. I will point out that Tesla is still planning to make the vehicle, but instead design them for a low cost, self driving taxi fleet, which in no way prevents Tesla from quickly pivoting and making the car available as a personally owned vehicle too, at about the same $25,000 price point (so take all the negative news about the affordable Tesla with a grain of salt).

It also does not preclude Tesla offering this fleet taxi with a driver’s seat and requisite controls too, depending on how it is designed. In doing this, Tesla is trying to redefine the race, the race to design an affordable car for the urban masses, a mass of people that Tesla is gambling will prefer not to own a car at all (or at least not an inexpensive one) and instead prefer to get around town in an affordable, driverless (or not) EV.

While Tesla takes this unique approach, Kia and Hyundai are forging ahead with plans to offer EVs for around $15,000, new. It is critical to point out that this price represents the domestic price in South Korea for a tiny sub-compact vehicle that may or may not be offered for sale in the US. Add to this American’s predilection for larger vehicles, I would strongly suspect this EV will never show up on our shores (unless perhaps in a “stretched” version), even as part of a taxi or other fleet. But the US isn’t the largest auto market in the world anymore and Kia and Hyundai would certainly be targeting other Asian markets, besides their domestic market, with these vehicles. 

Since a prototype of Kia’s ~$15,000 EV2 is already on the road, not to mention the low priced Chinese EVs already on sale in other countries (some for less than $10,000 in China, or double that price in other countries), I can say with a high degree of confidence that Tesla is going to be late to the sub $25,000 EV game and brands like Kia and Hyundai will be leaders in the $25,000 and under EV section of the market, at least outside of the US.

Kia and Hyundai’s low cost EVs for the US market will likely start around $30,000 this year and next, with models like the forthcoming Kia EV3. It will take at least another model/generation for these two companies to offer a $25,000 (or less) EV in the US market, and the same is true for every other maker too, but the first company to offer an EV in the US market for $25,000 or less may either have a runaway hit on their hands or they may find that American buyers don’t have a significant appetite for such affordable, and diminutive EVs (just like we don’t seem to have much of an appetite for such cars that are powered by gasoline).

I am willing to bet that this is one factor in Tesla’s strategy regarding their driverless taxi fleet and self driving capability. Kia and Hyundai, along with the rest of the legacy automakers, may or may not find sales success in the US with their low cost EVs (that will probably lack “self driving” capability at the lowest price points). For American consumers, it may mean the low end of EV pricing may hover around $30,000 for quite a while.

Are you in the market for EVs that cost $25,000 or less? What type of vehicle would such an EV need to be and what are your requirements for such a vehicle? Will the lack of new EVs under $30,000 (before any incentives) keep you out of the market or relegate you to the used EV market only? Click on the Add New Comment red link below to voice your opinion.

Images courtesy of Kia.

Justin Hart has owned and driven electric vehicles for over 15 years, including a first generation Nissan LEAF, second generation Chevy Volt, Tesla Model 3, an electric bicycle and most recently a Kia Sorento PHEV. He is also an avid SUP rider, poet, photographer and wine lover. He enjoys taking long EV and PHEV road trips to beautiful and serene places with the people he loves. Follow Justin on Torque News Kia or X for regular electric and hybrid news coverage.