The production threshold follows the Aug. 4 launch of the all-electric EV3 compact SUV. Despite holding an annual installed capacity of 400,000 units, the manufacturing plant has never operated at full capacity since opening a decade ago.
The assembly plant recorded a output of 155,000 vehicles during the first half of 2026. The addition of the EV3 alongside the gasoline-powered K3 and K4 models is expected to push total annual output above 300,000 units.
Global Production Hub and Investment
The US$649 million capital allocation for the EV3 introduced new manufacturing technology and infrastructure to the Pesqueria site, establishing Mexico as Kia’s sole production hub for the EV3 outside of South Korea.
The facility will supply the EV3 to the domestic Mexican market, where Kia targets sales of 500 units over the remainder of 2026, and export the vehicle to select Latin American markets. Exporting the EV3 to the United States remains unconfirmed by corporate leadership, though US dealership networks anticipate a late-2026 commercial launch following a debut at the New York International Auto Show.
"Right now, that is something we cannot confirm. The only thing we can say is that we will be reaching more markets and, as they are confirmed, we will announce where we are sending it. It seems to me that not only is the United States a potential market, but in Latin America there are already countries selling this type of vehicle in that segment, and it is a much more accessible vehicle that will offer sales volume," said Horacio Chavez, Managing Director, Kia Mexico in an interview with El Economista.
Chavez noted that Kia Global's overarching strategy relies on establishing production centers near regional consumer bases. Electrified models currently account for 25% of Kia’s global sales, with the automaker targeting a 52% share within the next four years.
Industrial Policy and Supply Chain Integration
The EV3 begins production with an initial domestic component content of 26.5% to 27%. Kia and the Mexican Ministry of Economy plan to scale this figure through local supplier development, replicating the strategy previously utilized for models such as the Rio, Forte, K3, and K4.
The expansion aligns with the Mexican government's "Plan México" industrial strategy, designed to elevate national manufacturing value and substitute imported components across strategic sectors.
"In the automotive sector, for example, Kia's vehicle will start with 27% national content, and the objective is precisely to generate more supply capability. Manufacturing has to step up its level; it must have higher added value. It is not just an assembly process. We have to develop a great deal of technology and human capital so that we can have more added value," said Ximena Escobedo, Subsecretary of Industry and Commerce, Ministry of Economy.
Escobedo noted that localizing automotive supply chains requires technical capacity development and typically yields measurable results over a three- to four-year period.
Trade Dynamics and Regional Rules of Origin
The localization effort comes as Mexican manufacturing exports grew 25.8% year-over-year in the first half of the year, led by non-automotive sectors (up 37.6%), while automotive exports expanded by 1%.
The development of domestic supply chains is central to compliance with USMCA rules of origin. Mexico's supply-chain strategy contrasts with trade measures in the United States under the Trump administration, which rely heavily on import tariffs to incentivize domestic manufacturing.
"Our industrial policy is based on Plan México. In the United States, industrial policy is based on tariffs," Escobedo said.
Fitch Ratings estimates the effective tariff rate on Mexican goods exported to the U.S. at 3.7%, compared to 7.1% for Canadian goods.
"Despite the context, we are positioned much better," Escobedo added. "Is it the optimal scenario? No, but it is the realistic scenario."
https://mexicobusiness.news/automotive/news/kia-ev3-launch-puts-mexico-plant-track-record-300k
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