Kia commits $649 million to produce electric SUVs at Mexico plant
South Korean automaker Kia announced Wednesday it will invest $649 million in Mexico over the next two years to manufacture the EV3 SUV, the company's first fully electric vehicle to be produced in the country.
Speaking at President Claudia Sheinbaum's morning press conference, Kia Mexico CEO Andy Kim said the project aligns with Plan Mexico, the government's economic development strategy aimed at making Mexico the world's 10th largest economy by 2030 while increasing domestic content in automotive and strategic sectors by 15% and creating 1.5 million manufacturing jobs.
The investment, to be deployed between 2026 and 2028, will expand and adapt Kia's Pesquería plant in Nuevo León to produce the compact electric SUV. The facility, which has operated since May 2016 with an annual capacity of approximately 400,000 vehicles, currently manufactures the K3 and K4 models for Kia and assembles the Hyundai Tucson, exporting to more than 60 markets worldwide. The plant achieved a milestone of 2 million vehicles produced in August 2024 and earned recognition as the top manufacturing facility in Mexico and third in the Americas in the 2025 JD Power Initial Quality Study.
The EV3 features battery options of 58.3kWh or 81.4kWh, offering up to 600 kilometers of range under WLTP testing, and is equipped with a 150kW electric motor. According to Economy Minister Marcelo Ebrard, operations will begin August 4, making Mexico the first country outside Korea to manufacture the model.
Job creation and domestic content
The project will incorporate new industrial technology and more efficient energy systems, part of the investment allocated to environmental and sustainability initiatives including solar energy infrastructure and water treatment systems. Production will create 500 new jobs initially, with an additional 1,500 direct positions expected between 2027 and 2030.
The vehicle's domestic content will start at approximately 27% and is planned to increase through the inclusion of local suppliers. President Sheinbaum emphasized that a significant portion of production will serve the domestic market, supporting Plan Mexico's goal of strengthening electric vehicle adoption in the country.
The announcement comes as Mexico's electric vehicle market experiences rapid growth, with sales reaching 235,501 units by the first quarter of 2026. March 2026 marked a record with 16,374 units sold, representing a 33.9% year-over-year increase. Industry projections estimate the market will grow from $1.29 billion in 2026 to $4.46 billion by 2031, with Nuevo León state forecast to record the steepest growth at 28.25% annually.
Investment amid trade uncertainty
Kia's commitment offers reassurance for Mexico during a period of uncertainty about the investment environment due to protectionist measures by the United States and the ongoing review of the United States-Mexico-Canada Agreement. The USMCA is undergoing its scheduled six-year review in 2026, with automotive rules of origin a contentious topic as the U.S. seeks higher regional content thresholds beyond the current 75% North American content requirement for duty-free access.
"In a time of such uncertainty regarding the automotive industry, this decision means that this company is seeing investment opportunities in the country," Ebrard said.
The $649 million figure represents a finalized commitment that builds on an initial $600 million investment announced by Kia in April 2026 for expanding the Pesquería plant for electric vehicle production.