Kia Corporation plans to build a second plant in South Korea dedicated to battery-powered, purpose built vehicles (PBVs) as it targets future demand for “custom tailored” mobility products including large autonomous buses for urban public transport, according to media reports citing local industry sources.

The new factory is expected to be built in the company’s Hwaseong manufacturing complex with completion scheduled for 2028. Reports suggested the decision was also intended to appease local labour unions and strengthen the company’s wage negotiating position.

The new facility will complement the first PBV plant already under construction in Hwaseong since April 2023 and scheduled to begin production of smaller urban public transport vehicles from the second half of 2025. The company is investing KRW1trn (US$740m) in this plant which will have capacity for 150,000 units per year.

Kia sees commercial PBVs as a key driver of future growth and plans establish a strong early presence in this segment. It has set a target of 1.5m cumulative sales globally by 2030.

General Motors already sells PVBs to major logistics firms in the US, such as FedEx, while other companies including Toyota and US EV producer Rivian Automotive are also targeting this segment.

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By GlobalData