Kia has increased sales in Europe for 11 consecutive years and its sales are steady this year in a declining market with a 1 percent rise in the first nine months to boost market share to 3.2 percent from 3.1 percent. The main task for Emilio Herrera, who became Kia Europe's COO in April 2018, is to continue the upward trend despite the huge challenge posed by the need to comply with the new European Union CO2 emissions limits. The Spanish executive is confident that Kia will avoid paying fines for missing EU CO2 targets. He says automakers will have no choice but to electrify their ranges, even in smaller segments. Herrera discussed Kia Europe's electrification strategy with Automotive News Europe Correspondent Andrea Malan.
Renault aims to launch a 10,000 euro ($11,000) electric car in Europe within five years. What is your opinion?
That is a very bold statement. One of our biggest challenges is to make EVs profitable, and the smaller the car, the more complicated that is. Therefore, a 10,000-euro EV is very challenging and not very realistic. We know how difficult it is because we are looking to produce an electric version of the Picanto minicar. There is nothing confirmed yet, but we're really looking at it. But I don't think that it could be less than 10,000 euros, unless you strip the vehicle down to the bare bones.
What's the base price for your gasoline-powered Picanto?
It's 10,000 euros.
How much would an electric version of the Picanto cost now?
Close to 20,000 euros. You have to add 8,000 to 9,000 euros to the gasoline price. So as long as there are fiscal incentives to support sales of EVs, it could be feasible. But I think those incentives will be gone in five years because there will be so many EVs on offer by then that the governments would not be able to support them.
Are you that bullish about the future of full-electric vehicles?
Yes, I'm optimistic. Why do we believe that the EV market will grow? The main reason is that we have no other choice. Why is Volkswagen suddenly heading in this direction now? Not because they like it but because they are forced. Volkswagen Group sells 4 million cars in Europe; they need to offset that with EVs to avoid paying the EU's CO2 fines. Now, Volkswagen says when they start the mass production in December [of the ID3 battery-electric car] that they will be able to sell it for 30,000 euros ($33,000). I think it's a bold statement. It's a compact-segment vehicle; we're not talking about a Smart. We at Kia today are not capable of launching an electric vehicle at 30,000 euros.
If governments are withdrawing incentives for EV purchases why build an electric Picanto?
We will have no choice. We will have to do it. The A and B segments [minicars and small cars] are so important in Europe. In Italy, those segments account for 50 percent of the market. We will have to have an A-segment car that is electric. Our goal is to have an electric car in almost every main segment where we compete. Even if it's not confirmed today, I think we have no choice.
How much is a well-equipped Picanto?
Let's say 16,000 to 17,000 euros.
Is that close to what you could charge for an electric Picanto?
That would be a very reasonable price for an electric Picanto -- 16,000 to 17,000 euros. But it's not easy. Even that is a challenge. Now, if we think that the government's support will still be there, then the price difference can be offset by the subsidies. But take a country like France, which is heavily pushing EVs. The government is giving 6,000 euros for an EV, plus another 2,500 if you scrap your vehicle. That's a huge investment of public money. If the share of EVs gets to 20 percent, and you have to pay 6,000 euros for each one ... is that sustainable? And besides, a lot of the income from governments in Europe also comes from taxes on gasoline and diesel fuel. If we reduce fuel consumption, maybe they tax electricity, so electric cars are going to become more expensive to charge.
Would having EVs on the same platforms as combustion cars give you more flexibility?
If you have a dedicated EV platform, it's easier and the packaging is also easier. If you have a traditional platform, let's say the one we use for the Ceed, and you want to make this car an electric vehicle, it's not so easy because of the packaging. Where do you put the battery? It's feasible but it's more complicated. If you start with an electric platform, it is much easier.
Does that mean the electric Picanto would be on a dedicated platform?
The only vehicle it could share its platform with is the Hyundai i10, if they also wanted to build an electric version. More generally, in the future we will have both dedicated EV platforms and flexible platforms for both combustion cars and EVs. One example is the Imagine concept we showed at the Geneva show this year. The plan is for this to become a mass-produced vehicle in one or two years and to have a dedicated electric platform.