New Kia EV5 to undercut Tesla Model Y in price

The Model Y is Australia’s most popular electric vehicle by a handsome margin but a new SUV from an established car maker could challenge its dominance.

Kia has thrown down the gauntlet to Tesla’s dominant Model Y electric SUV, unveiling a new model that is expected to be roughly $5000 cheaper than the market leader.

The new EV5 will be built in China, helping Kia to cut its production costs and be more competitive on price.

Tesla’s Model Y and Model 3, as well as BYD’s popular Atto 3, are all built in China.

Tesla dominates the Australian electric vehicle market, accounting for more than half the EVs sold last year.

Mainstream makers such as Kia and Hyundai have been unable to match Tesla’s pricing and as a result have sold in small volumes.

The new Kia EV5 will be built in China and competitively priced. Picture: Supplied.

But the new EV5, the first Chinese-built Kia sold in Australia, is expected to have a drive-away price of less than $70,000 when it launches in June.

Kia engineer Graeme Gambold said China had unparalleled expertise in building huge numbers of electric cars for competitive prices.

“There are cost advantages to building cars in China, no question,” he said.

“Not just labour costs, material costs and everything else are much lower.”

Kia has invested heavily in the Chinese plant. Picture: Supplied.

Kia says its Chinese move is not just about slashing costs, as the brand has invested enormous sums into a new facility that resembles its Namyang research and development centre.

“This car, even though it’s made in China, is really made and engineered by Kia.”

The move also gives the Australian operation access to a healthy supply of cars. Sales of its EV6 have been constrained by continuing supplies bottlenecks.

Kia Australia general manager of product planning, Roland Rivero, said the new factory will pump out large numbers of the EV5 for Australia.

“We have a business plan, a sales plan to get to around 10,000 per annum,” he said.

“To get there it’s going to require a very competitive product, a good value proposition.

“To get those kind of numbers there’s a requirement to convert some of the ICE buyers out there who maybe don’t want to wait 18 months for a hybrid, for example, and would consider this a suitable product.”

Kia says the EV5 is priced to appeal to buyers who don’t want to wait for a hybrid to be delivered. Picture: Supplied.

Full prices and technical specifications for the car are not available but it will be available in front-wheel-drive and all-wheel-drive trim, and deliver about 500 kilometres of electric range.

The car has a few design elements that separate it from the herd, including a bench-style stone seat, flat-folding rear seats, a household power outlet in the boot and aviation-style tray tables for the back seat.

Rivero said Kia entry-level EV5 examples should start from less than $70,000 drive-away.

“We’re giving it the best chance to have success in our market,” he said.

“We’re targeting, at least an entry price point, to undercut Tesla Model Y.”