South Korea's Kia Corp (000270.KS) said on Thursday it had delayed plans to build "software-defined vehicles" by about one year to 2028, and announced a hefty hike in investment plans, underscoring its struggles to catch up with the likes of Tesla (TSLA.O).
Shares in the automaker tumbled on the plans announced in an investor presentation, closing down 5.5% compared with a 1.6% drop for the broader market.
Both Kia and Hyundai Motor (005380.KS), which together form the world's No. 4 automotive group, are seen as laggards in self-driving technology and other software features compared to Tesla and their Chinese rivals.
Kia said its first software-defined vehicle or SDV will be equipped with semi-automated driving technology for highways in 2028, while a more advanced vehicle capable of operating in city streets would be ready in early 2029.
Last year, Kia said it planned to start production of its first SDV in 2027.
Kia said it will invest more than $500 million to strengthen its physical AI capabilities and vision-language-action models, while deepening strategic partnerships with technology companies such as Google's (GOOGL.O) DeepMind and Nvidia (NVDA.O).
Last month, Hyundai Motor Group announced an expanded strategic partnership with Nvidia to advance autonomous driving technology development.
BIG HIKE IN INVESTMENT PLANS
The delay comes after Hyundai's former president, Song Chang-hyeon, who had spearheaded the group's SDV efforts, resigned in December, sparking concerns that the group was falling behind in developing such technologies.
He has been replaced by Park Minwoo, a former Nvidia and Tesla engineer.
Kia also said it now plans to spend 41.4 trillion won ($28 billion) from 2026 to 2029, a whopping 30% more than an earlier estimate as it seeks to boost vehicle electrification, software and new businesses.
At the same time, it cut its 2030 target for electric vehicle sales by about 20% to 1 million units, reflecting weaker demand and the scrapping of EV subsidies in the U.S. last year.
Kia also trimmed its 2030 sales target for all vehicles to 4.13 million vehicles, which would be around a 4.5% share of the global market.
That would represent a 30% jump from last year's sales of 3.14 million units, when Kia had a 3.5% share. It also plans to boost annual hybrid sales to 1.1 million units by 2030, up about 60% from this year’s target.
Kia joined Hyundai in unveiling plans to deploy Atlas humanoid robots developed by Boston Dynamics. It will use them at a factory in the U.S. state of Georgia from 2029.
Hyundai plans to use the robots at a new plant in Savannah, Georgia, from 2028 and has said it aims to build a factory capable of manufacturing 30,000 robots annually by that time.
($1 = 1,481.1000 won)
