Why the just-announced 2025 Kia EV2 is a big deal for the Korean brand as it pivots to take on cheap electric cars from MG, BYD and GWM

As part of Kia's inaugural EV Day, the South Korean brand dropped a surprise announcement that an EV2 was on the way.

The EV Day's purpose this year was to show off the production version of the EV5 mid-size SUV, and near-production versions of the EV3 small SUV and EV4 crossover sedan, but the announcement of the EV2 is significant as it might give the brand a low-cost rival to Chinese newcomer brands which are dominating the affordable EV space.

We don't know what the EV2 will even look like yet, although size-wise it will sit below the EV3 small SUV, making it likely to be some form of small crossover or hatch.

The brand said the EV2 will start production in 2025 at its Slovakia plant, with a focus on the European market, although did not rule out the model being produced in right-hand drive at its new Indian venture as part of its new global electrification strategy. As it is, importing a small, low-cost vehicle from Europe may not be competitive on the all-important price.

Importantly, Kia's President and CEO, Ho Sung Song, mentioned the EV2 is trying to break the US$25,000 barrier (AU$40,000) to help it undercut the circa-$50,000 target pricing of entry-level versions of the EV3.

If such a price could be achieved in the Australian market, it would give buyers a Korean alternative to the current Chinese low-cost hegemony which consists of the BYD Dolphin (from $38,890 before on-road costs), MG4 (from $38,990), and the GWM Ora (from $39,990). The next-cheapest non-China-sourced option is the Nissan Leaf hatch, which hails from Japan and starts from $50,990 for the standard range (311km) version.

Kia is undergoing a massive shift as it rolls out a more expansive electric vehicle offering, starting with the EV5 in 2024. The EV5 itself is a big change for Kia, as it is the first car based on the brand's e-GMP platform to run at 400-volts rather than the 800-volt architecture used in the larger EV6 and EV9, and also the first vehicle to make the switch to front-wheel drive.

In a first for Kia Australia, the EV5 will also be built in a Chinese factory for the Australian market. Kia is realigning all its factories for strategic output, with the China factory producing medium and large models for domestic and export markets, Korean factories continuing to do much of the heavy lifting for the brand (which it defines as an 'EV global hub'), a new factory in India for small and affordable vehicles for emerging markets, and the existing Slovakia factory, which will build small and mid-size vehicles for Europe.

Kia will also have a factory in the USA and Mexico, which will cover "full line-up production" for the Americas.

Kia plans to sell a million EVs, making up 25 per cent of its overall volume by 2026. In Australia, the EV9 will launch before the end of 2023, which will be joined by the EV5 sometime during the course of 2024. The production version of the EV3 is due to be revealed in 2024 but likely won't arrive in Australia until 2025, while production versions of the EV4 and EV2 are expected to break cover in 2025.

The soon-to-launch EV9 is decidedly at the opposite end of the price spectrum, expected to start from just under $100,000 before on-road costs, the most expensive production Kia model ever made.