Kia Corporation, a South Korea-based automobile manufacturer and a subsidiary of Hyundai Motor Group, has announced plans to invest $1bn (Won1.3trn) to build a new electric vehicle (EV) plant in Mexico.
The new plant is expected to be built near the existing Kia facility in Pesqueria in the northern Mexican state of Nuevo Leon, which opened in 2016, and will allow the company to become eligible for federal subsidies under the Inflation Reduction Act (IRA).
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Pesqueria is part of the Monterrey metropolitan area, and such has Kia’s impact been on the location that it has been nicknamed ‘Pescorea’, a portmanteau of Pesquería and Korea. The municipality has experienced an influx of Korean immigrants since the Kia plant opened seven years ago.
The IRA was signed in August 2022 and offers a $7,500 tax credit to EV buyers if the car’s battery meets a certain threshold for sourcing parts from the US or other countries with which it is a free-trade partner, one of which is Mexico.
The Kia announcement comes on the back of a series of foreign investments in Mexico in 2023 from the likes of Brown-Forman, Quanta Computer, DHL Express and ZF Group.
