Selling cars in Europe today is no longer just about satisfying consumer demand—it’s about navigating a complex web of regulatory requirements, economic pressures, and shifting market preferences. And no automaker illustrates this balancing act better than Kia.

Despite the European Union’s aggressive push toward electrification, combustion-engine vehicles still dominate the roads. According to data from the European Automobile Manufacturers’ Association (ACEA), electric vehicles (EVs) accounted for just 15.3% of new car sales in the EU during the first four months of the year. Yet the regulatory noose is tightening: the EU is pressing ahead with stricter CO₂ emissions limits and has mandated that all new cars sold from 2035 onward must be electric.

Caught in this tug-of-war is Kia, which is carefully trying to strike the right balance. “If we rely too much on combustion cars, we risk not reaching the CO₂ targets and having to pay fines. If we push EV sales too much, we end up denting our profit margins,” said Carlos Lahoz, Vice President of Sales for Kia Europe, in an interview with Automotive News Europe.

The dilemma isn’t unique to Kia. Across the continent, automakers are grappling with a similar paradox. Traditional internal combustion engine (ICE) vehicles are still more profitable and in higher demand, but EVs are essential to meet emissions targets and avoid hefty fines. Volkswagen and Renault have both voiced fears that failing to comply with new EU emissions standards could cost them billions of euros as early as 2025.

The EU has somewhat eased the pressure by allowing carmakers to average their emissions over the 2025–2027 period rather than hitting targets in 2025 alone. Still, the road ahead is steep. Stellantis’ chairman recently revealed that over a quarter of engineers’ working hours are now consumed by regulatory compliance tasks, much of it related to emissions standards.

At the heart of the problem is a lack of profitability in the EV sector. Lahoz acknowledged that battery costs remain a major hurdle, preventing electric vehicles from achieving cost parity with their gas-powered counterparts. As a result, Kia must use profits from ICE models to fund the transition to electric—a strategy echoed by many automakers across Europe.

Nonetheless, Kia is proving that strategic flexibility can pay off. The South Korean brand is enjoying a strong year in Europe, capturing a 4.1% market share in the EU, EFTA, and UK combined during the first four months of 2025. That puts it ahead of several well-established rivals, including Ford (3.4%), Opel/Vauxhall (2.9%), Citroën (2.8%), Fiat (2.3%), and SEAT (1.7%). Impressively, it even surpassed its larger affiliate Hyundai (3.9%).

For now, Kia’s strategy hinges on maintaining a careful equilibrium: continuing to sell ICE vehicles to support short-term profitability, while steadily growing its EV lineup to ensure long-term survival in an increasingly green automotive landscape. Whether that tightrope walk can remain sustainable as regulations tighten and competition from low-cost EV manufacturers, particularly from China, intensifies remains to be seen.

But one thing is clear—Europe’s automotive future is electric, and Kia, like the rest of the industry, must evolve without stumbling.

Source: Automotive News Europe