Kia Corp: First Take: An unexpected 2Q miss on higher Europe EV incentives

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Kia Corp: First Take: An unexpected 2Q miss on higher Europe EV incentives

J P M O R G A N Asia Pacific Equity Research

24 July 2026

Kia Corp Overweight

000270.KS, 000270 KS

First Take: An unexpected 2Q miss on higher Europe Price (24 Jul 26):W130,500

EV incentives Price Target (Dec-27):W260,000

Our First Take: Kia’s 2Q OP of W2.6tn missed JPMe (W2.9tn) and BBGe

(W2.8tn). The miss was surprising, given sales volumes grew 6% y/y in 2Q. The

discrepancy vs. JPMe was driven mainly by a larger-than-expected increase in

Europe EV incentive spending (JPMe: ~W0.3tn). Management remains confident

of meeting its full-year OP guidance of W10.2tn, citing robust 2H volume growth

and the absence of quality-related costs. The key debate on the earnings call

centered on Europe EVs, where intensifying competition has driven higher Korea Auto, EV battery, Nuclear and

incentives and weighed on profitability. While management sought to frame the Utility

issue as manageable, the share price reaction during the call (from -6% to -13%) Sonny Lee AC

suggests the market remains concerned. We stay positive and reiterate Overweight, (82-2) 758 5716

supported by: (1) continued HEV mix improvement and (2) volume strength. We sonny.lee@jpmorgan.com

also remain in the bull camp on the tangible progress in Hyundai Motor Group’s Seri Yoon

robotics and autonomous driving initiatives. (82-2) 758 5704

seri.yoon@jpmorgan.com

J.P. Morgan Securities (Far East) Limited, Seoul

Branch

Key Positives

• HEV profitability should help offset the incremental EV mix. Management

indicated that HEV profitability is ~1.5x that of ICEs, supporting mix-driven

margin resilience.

• Management reiterated confidence in the W10.2tn full-year OP guidance,

highlighting 2H operating leverage on ~+10% y/y volume growth in the US