Kia Motors Corporation

Kia has set two scope 1 and scope 2 emissions reductions targets for its direct operations with 2025 and 2040 timeframes. These follow the South Korean government’s roadmap for greenhouse gas emissions reduction by 2030 which has been cited as insufficient by Climate Action Tracker. While setting long-term targets is positive, the target pathways are not ambitious enough with both aiming to achieve only around 50 percent of the reduction required by the company’s decarbonisation pathway. Moreover, the company has not set a target to cover vehicle in-use emissions which are the most significant source of emissions for auto manufacturers. To demonstrate its commitment to improving the emissions performance of its light duty vehicles, Kia should set a science-based targets for its vehicle in-use emissions.

Kia performs poorly on low-carbon vehicle share – the most significant indicator of this assessment. In 2019, low-carbon vehicles accounted for only 1.9 percent of Kia’s total sales compared to the 6 percent required by its decarbonisation pathway. While Kia’s conventional hybrid vehicle sales have grown more significantly over the assessment period, accounting for 3.3 percent of total sales in 2019, these are not considered low-carbon vehicles by this assessment as they still require fossil fuels. Though the company has set a target to sell 500,000 electric vehicles by 2025, it is not clear whether this figure is an annual target or cumulative total. If annual, this still equates to only 19 percent of the company’s 2019 sales, which is below the 26 percent of sales needed by 2025 to align with the company’s decarbonisation pathway.

The majority of Kia’s income is still derived from conventional internal combustion engine vehicles, which accounted for more than 94 percent of sales in 2019. The company’s strongest performing new business model is its recent involvement with the IONITY charging station joint venture in Europe, which was well established when Kia joined the venture. Kia has shown limited innovation or efforts to significantly grow its alternative low-carbon revenue streams despite its stated ambition to focus on customised mobility solutions.

Kia has set targets to reduce scope 1 and scope 2 emissions for its direct operations by 2025 and 2040 based on the South Korean government’s roadmap for greenhouse gas emissions reduction by 2030. While the company does not have any targets in place to reduce its vehicle in-use emissions, Kia states its ambition to achieve a 6 percent share of the electric vehicle market globally (excluding China) by 2025.

Kia uses an internal carbon price to test investments relating to its business sites and drive progress on its mid-term manufacturing emissions reduction targets. The company also aims to release 11 new electric models as well as reach 500,000 electric vehicle sales by 2025, though it is not clear whether this is annually or in total. Kia’s electrification plans will focus on developed markets that have stricter environmental regulations, namely Europe, South Korea and the US. In less developed markets, the company will continue to sell internal combustion engine vehicles until there is a market demand for low-carbon alternatives.

Low-carbon vehicles occupy a small portion of Kia’s total sales, only reaching 1.9 percent in 2019. Financial and charging incentives for consumers to promote the sales of its low-carbon vehicles have been limited to South Korea, with no similar efforts identified in the company’s other major sales regions of Europe and the US.

Between 2014 and 2019, Kia reduced its global vehicle in-use emissions per passenger kilometre only by 6 percent, far from the 22 percent required by the company’s decarbonisation pathway. These limited reductions are in part due to vehicle in-use emission increases in the US – one of the company’s primary sales regions – where sales have shifted from smaller vehicles towards SUVs in recent years. Kia’s efforts to reduce its emissions per vehicle produced have proven equally unsuccessful, with nearly zero change in its manufacturing emissions intensity figures from 2014 to 2019.

Kia’s approach to decarbonisation requires significant improvement. The company’s target to increase its absolute electric vehicles sales still allows for internal combustion engine vehicle sales to persist. Moreover, the company’s approach to satisfy the current market demand for low-carbon vehicles in only a few regions, undermines its ambition to re-position itself as a leading electric vehicle manufacturer.