Hip pockets driving EV sales - not the planet

Kia Motors vice president Gregory Guillaume says consumers are buying EVs because of their hip pocket, not because of a desire to save the planet.

Guillaume says the time of people buying green cars to make a statement is gone. Now it’s financials that are driving demand in Europe.

“So, we’ve noticed that we’ve moved away from that time… of people buying a Prius because they wanted to make that statement. People that are buying electric cars in Europe at the moment are mainly [doing so] because of the financial advantage,” the Kia chief told carsales.com.au.

“We thought it must be because they’re believing in ‘we need to do something for the planet, we need to do this and this’. Actually, after two years of selling [electric cars] in the market, [it’s] none of that.

“The planet is nice to talk about it. But if you really ask them and if you question them, it’s finance. And the moment the finance [incentive] changes -- they’ll move their ship.

“There’s one market that’s the most volatile in Europe and it’s the Netherlands. They change the [CO2 emission related incentive] legislation almost yearly and you can really see which car sells the most. So it changes every year, depending on how the… car fits in the best or most advantageous segment.”

Kia is now selling a range of electrified vehicles in Europe. The Niro compact SUV is available in hybrid, plug-in hybrid and full EV versions. Elsewhere, the Soul is sold only as an electric vehicle and the Ceed small hatch is available from base grade as a mild hybrid.

Speaking with carsales.com.au after the Frankfurt motor show, the French born European head of design for Kia described the current period as the most challenging the auto industry has faced.

“It’s a very difficult time for the whole car industry right now. It’s [electrification] going to change the industry’s landscape,” he said.

The level of investment required from OEMs is already well documented. And Guillaume says new, harsher C02 emission laws will continue to ramp up the spend.

“I think some people are going to have it very hard with the amount of investment that is required. We have no choice in Europe basically with the legislation that has been passed --if we don’t have them [electric vehicles], any normal car you sell you’ll be paying so much in fines that you’ve got to put the price up by 2000-3000 euros and then wonder who is going to buy them,” Guillaume explained.

“The problem is we need to sell the cars everywhere and the requirements have become so different.

“[For example], California is doing something for it, but then the other parts [of America] – nothing, not interested. It’s getting more and more difficult.

Guillaume estimates under current European emission laws Kia must sell about one electric vehicle for every six or seven combustion-engined cars. Even so, he suggested the brand could face financial penalties in the future.

“It’s very, very difficult; loads of uncertainties. I mean, we have always said we are a challenger brand and we like the challenge, but I think right now for the whole industry… Whoa, it’s very tough.”