Kia Warns of Europe Price War as Chinese Rivals Gain Ground

Kia is warning that Europe has entered the opening phase of a global EV price war, with Chinese challengers forcing established automakers to choose between margins and market share. The company said its price gap with Chinese rivals in Europe has shrunk this year to about 15% to 20%, down from 20% to 25% before, while BYD car registrations in Europe jumped nearly 150% in March.

Chief executive Song Ho-sung told investors that Chinese companies had launched an aggressive push with low-priced EV models and that, in some European countries, their market share was rising much faster than Kia had expected. The message from Seoul was blunt: Europe has become the key battleground in global EV competition, and pricing now matters almost as much as product design. Lower prices may help consumers and speed EV adoption, but they also threaten factory utilization, profit margins and the return on billions of euros in industrial investment.

Kia’s latest quarterly numbers show how expensive that fight can be. The company posted record first-quarter revenue of KRW 29.5 trillion, but operating profit fell 26.7% year on year to KRW 2.21 trillion. Kia said global retail sales rose 3.7% even as industry demand fell 7.2%, and its global market share climbed to 4.1%, the first time it has passed 4%. The company also pointed to higher incentives in Europe and the full impact of U.S. tariffs as drags on profit.

Even so, Kia is leaning into the market rather than retreating. At its 2026 CEO Investor Day in Seoul on April 9, the company set targets of 3.35 million wholesale sales in 2026 and 4.13 million annual sales by 2030. It also said Europe would be a major growth market, with a target of 746,000 annual sales by 2030, and it plans to expand its EV lineup to 14 models while lifting annual EV sales to 1 million. Over the next five years, Kia plans to invest KRW 49 trillion.

The European backdrop helps explain why the pressure is intensifying. The European Automobile Manufacturers’ Association said EU new car registrations rose 4% in the first quarter of 2026, with battery-electric vehicles reaching a 19.4% market share, up from 15.2% a year earlier. Hybrids held 38.6% of the market, while petrol and diesel together fell to 30.3% from 38.2% a year earlier. New tax benefits and incentive schemes across major markets are supporting demand, even as the European Commission’s countervailing duties on Chinese battery-electric vehicles, effective from October 30, 2024, have not stopped Chinese brands from gaining ground.

Song said Beijing’s strategic focus could eventually shift away from autos toward sectors such as AI and robotics, and that subsidies may later be wound down. For now, though, Europe looks set for a prolonged discount war, with Chinese entrants pressing harder and legacy automakers testing how much profit they are willing to sacrifice to hold their place.