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S. Korea to raise concerns about EV credits, battery sourcing in U.S. visit

SEOUL — South Korean officials will meet U.S. counterparts this week to express "concerns" about the Inflation Reduction Act, which restricts who can receive U.S. subsidies for the production of electric vehicles and where firms can source battery materials. President Joe Biden signed into law this month a $430 billion bill, seen as the biggest climate package in U.S. history. The law requires that EVs be assembled in North America to qualify for tax credits, ending subsidies for several EV models, and that a percentage of critical minerals used in batteries come from the United States or an American free-trade partner. Automakers like Hyundai Motor face short-term competitive disadvantage to manufacturers of EVs that receive tax credits in the United States, while industry sources said Korean battery makers must make changes to mineral sourcing routes, which could affect cost adversely. South Korean officials are expected to tell counterparts from the U.S. Trade Representative's office and the U.S. Treasury that the new law may violate trade norms such as the U.S.-South Korea free trade agreement and the WTO agreement, the industry ministry said. Korean automakers will consider adjusting production plans to prioritize the construction of U.S. plants for example, the ministry said, while battery makers will seek to diversify where they source minerals from. Under new rules to kick in next year, at least 40% of the monetary value of the critical minerals in batteries will need to come from the United States or an American free-trade partner, with that proportion rising to 80% by 2027. Globally, the treatment of some 58% of lithium, 64% of cobalt and 70% of graphite goes through China, according to ministry data. FALLOUT The new rules are a major complication for battery makers LG Energy Solution (LGES), SK On and Samsung SDI, battery industry sources said. South Korea's LGES supplies Tesla and General Motors, while SK On and Samsung SDI supply Ford Motor and Volkswagen among others. The three battery makers together command more than a quarter of the global EV battery market, according to SNE Research. "It's become a huge headache ... Automaker clients said they didn't expect this new law would take effect this soon," said a South Korean battery industry source.

Kia teases e-AWD Soul concept for Chicago

Kia let slip just a few days ago that it is preparing an outdoorsy concept based on one of its most popular models for the 2015 Chicago Auto Show. After a brief wait, we are getting our first look at an unnamed e-AWD concept – or at least the front third of it. By all accounts, it looks to be rough and tumble version of its popular Soul compact. Beyond some tougher looks, the concept will get some extra oomph from an electric all-wheel drive system. Plus, to fit its inspiration of letting city dwellers go on off-road adventures, the styling wears a few tweaks from Kia's California design studio. The teaser shows off black body cladding around the lower air dam and wheel wells. The headlights also appear blacked-out with white trim around them for contrast, and the orange highlights in the wheels provide some visual pop. We're curious to see if Kia will do anything else for this Soul concept's design and how much power the electric all-wheel drive system adds. With the way the teaser image is tightly cropped, it could be a different bodystyle altogether, from a convertible to a pickup. All will be revealed when the concept is unveiled on Thursday, February 12, at the show. For the moment, we're just happy it appears that Kia is finally formally entertaining the idea of an AWD Soul. Kia Motors America will unveil an advanced and capable electric all-wheel drive (e-AWD) concept vehicle at the upcoming Chicago Auto Show. This bold off-roader was conceived by Kia's California design studio and built for city dwellers seeking the ultimate urban escape. Intended to enable a wide array of outdoor activities from skiing and snowboarding, to camping, hiking and mountain biking, this rugged runabout captures the essence of adventuring at higher elevations with the promise of surefootedness in the wild. Kia's newest concept will be revealed on the Kia stand Thursday, February 12 at 9 AM. See you there. News Source: Kia Design/Style Green Kia Crossover Hatchback Concept Cars Hybrid

Kia calls reports of second US plant 'groundless'

In discussing how Kia planned to use a focus on quality to raise its brand perception and take the fight to BMW and Audi instead of Toyota, a recent article in Automotive News Europe said one of the primary constraints was production capacity; Kia simply doesn't have the ability to make enough cars to meet its aims with the plants it has.
The CEO of Hyundai-Kia is said to be reluctant to build more plants because of that focus on quality and the fact that its suppliers are stretched to the limit. The effects of that position are being felt right now with both makers losing market share, as in the case of Hyundai not being able to make enough of its Veloster Turbo for the US market.
A South Korean newspaper apparently reported last week that Kia was planning to build a second factory in Georgia with capacity for up to 150,000 units annually, and that the company would break ground as soon as this month on "KMMG2." Kia has responded to the news by saying, "The report is all groundless." The mayor of West Point, site of the current KMMG plant, said he didn't know anything about such plans, nor did the Georgia department of economic development have knowledge of a new Kia factory.