MEXICO CITY,(Reuters) – South Korea’s Kia will produce and sell fully electric vehicles in Mexico, managing director for the company Horacio Chavez said on Wednesday.
The car manufacturer will invest $649 million in Mexico, Chavez added during President Claudia Sheinbaum’s daily press conference.
The electric EV3 model is currently manufactured in South Korea, but starting August 4, production will begin at a Kia plant in the Mexican state of Nuevo Leon, Economy Minister Marcelo Ebrard said.
“It’s an investment made to adjust the production line, so the same plant continues to be used,” Chavez added.
“A significant portion is intended for the domestic market,” Sheinbaum said about the nationally produced car, as the government aims to promote the adoption of electric vehicles in Mexico.
RESPONSE TO U.S. PROTECTIONISM
Ebrard added that, amid growing protectionism from the United States — Mexico’s largest trading partner — the Latin American country is seeking out other markets and bringing in new technologies, such as Kia’s batteries and electric vehicles, in order to reduce imports.
During bilateral talks with Mexico to revise the North American trade agreement in May, the U.S. proposed requiring that 50% of the value of North American-built vehicles originate in the United States, a significant departure from current rules.
Automakers such as Toyota or General Motors have announced they will expand their capacity in the U.S. and move some vehicle production.
Reporting by Aida Pelaez-Fernandez, Editing by Iñigo Alexander and Nick Zieminski
