Kia to produce hybrid cars at Hyundai's Georgia factory from next year

SEOUL (Reuters) - South Korea's Kia Corp ( KIMTF ) plans to produce hybrid vehicles at its affiliate Hyundai Motor's ( HYMTF ) new U.S. factory starting in mid-2026 as it seeks to meet growing demand, Kia's chief executive said without disclosing the models.

Hyundai - the world's No. 3 automaker when including Kia Motors, in which it owns a 35% stake - broke ground for an all-electric car factory in the state of Georgia in 2022 under former President Joe Biden's administration, which promoted EV-friendly policies.

But in a shift in strategy, Hyundai now plans to add hybrid cars to the factory's production lines at a time when demand for pure electric cars is cooling and President Donald Trump's administration is threatening to end EV subsidies.

Kia vehicles will represent 40% of the Georgia facility's total production, Kia CEO Song Ho-sung told reporters on the sidelines of an opening ceremony for the factory on Wednesday.

Hyundai said it plans to expand the factory's annual production capacity to 500,000 vehicles from an originally planned 300,000, bringing Hyundai and Kia's combined total U.S. production capacity to 1.2 million vehicles per year.

The upgraded plan represents part of the $21 billion in investments announced by Trump and Hyundai chairman Euisun Chung at the White House earlier this week.

Trump announced 25% import tariffs on cars and auto parts on Wednesday, a move that may hurt companies, especially Asian automakers, which are among the largest vehicle exporters to the U.S.

After Mexico, South Korea is the world's largest exporter of vehicles to the United States, followed by Japan, according to data from S&P.

Kia Motors currently produces most of its hybrid cars, including its Sportage hybrid crossover, in South Korea.

Song said the new U.S. factory would help achieve Kia's target of boosting U.S. sales to 1.25 million vehicles a year, up from 850,000 currently.

(Reporting by Hyunjoo Jin; Editing by Joe Bavier)