Kia to Start EV3 Production in Mexico in June to Ease U.S. Tariff Impact

Kia is expected to begin full-scale production of its small electric SUV, the EV3, at its Mexico plant as early as June as it seeks to reduce the burden of U.S. tariffs, industry sources said. The company is expected to start with a limited allocation to support launches in North and Central America in the second half of the year, with the possibility of gradually increasing local output.
 
According to the auto industry on Tuesday, Kia plans to ramp up EV3 production in Mexico as early as June. The company is reported to have shared the plan in its annual business roadmap presented at a labor-management production briefing last month.

The EV3, launched in July 2024, has been popular in South Korea and Europe. It is considered one of the most accessible models in Kia’s EV lineup, offering advanced features at a competitive price point.

Data from the Korea Automobile & Mobility Association showed the EV3 sold 21,254 units in South Korea last year, ranking second among passenger EVs. In Europe, about 65,200 units were sold last year, placing it ninth in the region’s EV market.
 
Kia’s push to strengthen local production comes as U.S. tariff costs rise. Since April last year, the United States has imposed a 15% tariff on imported vehicles, increasing cost pressure. As a result, Hyundai Motor Group’s tariff costs for the first quarter this year alone are estimated at about 2 trillion won.
 
With the EV3 set for its first entry into the U.S. market, Kia is moving to cut tariff exposure through production closer to the market. Kia plans to launch the “The all-new 2027 Kia EV3” in the United States in five trims in the second half of this year. It will offer two battery options: a long-range model with an 81.4-kWh battery and a standard model with a 58.3-kWh battery.
 
Labor opposition to shifting production is a key hurdle. Until now, all EV3 units have been built at Kia’s Gwangmyeong plant in South Korea. The decision would make the EV3 a dual-production model, built both at home and overseas. It would also be the first EV produced at Kia’s Mexico plant, which has previously made only internal-combustion models such as the K3 and K4.
 
Kia’s labor union is opposing the shift, citing concerns including job security. A union official said, “The company is pushing it through unilaterally.” The initial volume to be moved to Mexico is said to be relatively small at 10,000 units, but as U.S. sales grow, further expansion of local production would be a natural next step.