Kia wants to make electric cars more affordable by offering various battery options for its new Kia EV5 model, in a bid to cater to a wider range of consumers.
The South Korean carmaker recently unveiled the Kia EV5, an electric SUV with a price tag that ranges from $35,000 to $50,000.
The price difference depends on the type of battery installed - a Kia EV5 that runs on Chinese-made lithium iron phosphate (LFP) batteries is about 20 million won ($15,000) cheaper than one that uses nickel-manganese-cobalt (NMC) batteries.
Kia showcased three new models - EV3, EV4, and EV5 - at the inaugural Kia EV Day on Friday. While Kia did not disclose specific prices for each model, Kia President Song Ho-sung noted that "cars with higher numbers (in the name) are the higher-priced models."
This implies that the EV3 and EV4 models will be more affordable than EV5, which is likely to be priced between 50 million won ($37,000) to 60 million won ($44,000) in Korea.
However, the price of the Kia EV5 that the company had previously unveiled in China in August was as low as $30,000.
The EV5 sold in China is produced at Kia's Yancheng plant in China and uses cheaper, lower-range LFP batteries. The EV5 sold in global markets, including South Korea, is produced at the Gwangju plant in South Korea and is equipped with lithium-ion batteries using NMC cathodes composed of lithium, nickel, manganese, and cobalt.
Since NMC batteries have a longer range per charge, they are normally 15 to 20 percent more expensive than LFP batteries.
As a price war in the EV market began intensifying after Tesla rolled out price cuts for its China models in August, the auto industry is looking to incorporate cheaper LFP batteries to lower prices.
Tesla Model Y rear-wheel drive (RWD) equipped with Chinese LFP batteries sold 4206 units last month, surpassing the combined sales of the Hyundai Ioniq 5, Ioniq 6, Kia EV6, and EV9. The Tesla Model Y RWD is $20,000 cheaper than Model Y which runs on NMC batteries.
More carmakers are attempting to use both LFP and NMC batteries in the same vehicle, or are giving consumers the option to choose batteries when buying an electric vehicle.
LFP batteries are mostly made in China, but Korean companies such as SK On and LG Energy Solutions are also developing LFP batteries.
"EV batteries account for a large proportion of the price of an electric car, so we are looking into using various types of batteries," Song said. "As for LFP batteries, we are not only considering Chinese batteries, but also domestic ones."
Volvo and Ford Motors also use both LFP and NMC batteries for the same EV model. Volvo's upcoming EV, the EX30, will be available as an LFP-based model with a range of up to 344 kilometers and an NMC model with a range of 480 kilometers. In Europe, the price of LFP EX30 is €36,590, and the price of NCM EX30 is €41,790.
Ford also added a lower-cost model with an LFP battery to its all-electric Mustang Mach-E lineup. The LFP model is about $400 cheaper than the existing NMC model.
Mercedes-Benz has also decided to use a combination of LFP and NCM batteries in its small car lineup, starting with the entry-level CLA when it launches next year.
This article was originally published on Oct. 16, 2023.