South Korean automaker Kia Corp. is expected to reduce its workforce assigned to produce its upcoming compact electric sport utility vehicle (SUV), the EV5, which is scheduled for release in the second half of this year.

According to labor representatives on Sunday, Kia recently notified workers that it intends to cut more than 100 employees originally slated for EV5 production at its Gwangju plant, amounting to about 13 percent of the planned workforce. The union has opposed the plan, making negotiations necessary.

The EV5 was launched in China in November 2023 as a strategic model for that market but has underperformed, with cumulative sales reaching just 8,246 units as of May due to intense competition.

Kia now plans to reposition the EV5 for the domestic market as part of efforts to expand its electric SUV lineup, with sales expected to begin as early as September. For the Korean launch, the company is redesigning the vehicle’s interior and exterior to suit local consumer preferences and upgrading the battery from lithium iron phosphate (LFP) to nickel-cobalt-manganese (NCM) to improve competitiveness. Even before full-scale production begins, however, Kia has moved to adjust staffing levels.

This trend is not limited to the EV5. Production suspensions have continued for Hyundai Motor Co.’s Ioniq 5 and Kona EV amid sluggish global demand.

In late June, Hyundai suspended operations for three days at Line 12 of its Ulsan Plant 1, marking the fourth suspension this year. Similar shutdowns occurred in February, April, and May, ranging from four days to a week, due to reduced production volumes tied to weak demand.

The slowdown is closely linked to falling electric vehicle (EV) sales, particularly in the U.S. market. Although Hyundai has begun local production of the Ioniq 5 at its Metaplant in Georgia, it has continued to export Korea-made vehicles to the U.S. However, weakening sales have led to intermittent production.

During the first half of the year, Hyundai and Kia sold 44,555 EVs in the U.S., down 28 percent from a year earlier. Hyundai’s sales fell 4.6 percent to 30,988 units, while Kia’s sales plunged 53.8 percent to 13,567 units. This decline contrasts with overall U.S. EV market growth, where total sales rose 5.2 percent over the same period to 589,328 units from 560,198 units.

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