Kia has taken a proactive stance in addressing the issue of markups on its upcoming EV9 electric SUV, as evidenced by a letter addressed to its dealerships. In the letter, which was obtained by CarsDirect, the automaker politely but firmly requests that dealers refrain from marking up the EV9 above the Manufacturer Suggested Retail Price (MSRP). This approach highlights Kia’s commitment to price transparency and emphasizes the importance of providing a fair purchasing experience to customers.
Markups have been a contentious issue within the Kia brand, with some dealerships imposing excessive “market adjustments” on popular models like the Telluride and the EV6. For years, consumers struggled to find these vehicles without facing markups, which sometimes amounted to an additional $10,000 or more. The situation led to vehicles such as the EV6 being priced similarly to luxury brands like BMW due to dealer markups.
While the letter’s tone may seem polite, it raises the question of whether a strongly-worded request can effectively dissuade dealers from imposing markups, given the well-known challenges of dealing with car dealerships.
However, Kia is not merely relying on words to combat markups. In a bulletin also obtained by CarsDirect, Kia introduces a tangible incentive for its dealers. Dealerships could receive a $2,000 delivery bonus for each EV9 they sell, contingent on the condition that the vehicle goes to a registered reservation holder rather than a buyer willing to pay a substantial premium to expedite the purchase.
This bonus is designed to encourage dealers to prioritize reservation holders, helping to ensure a fair distribution of EV9 units. Although it may be an effective carrot to incentivize compliance, it remains to be seen whether dealers will abide by these rules when customers are willing to pay substantial amounts above MSRP to secure an early EV9.
The pricing for the 2024 Kia EV9 was recently unveiled, revealing that it falls in the higher price range. Starting at $54,900 ($56,265 w/destination charges) for the Light RWD trim, it’s uncertain whether this model qualifies for the $7,500 federal tax credit. Initial production will take place in South Korea, with eventual plans to shift production to Georgia, potentially making the EV9 eligible for the tax credit. The pricing then escalates to $63,900 for the Wind e-AWD, $69,900 for the Land e-AWD, and $73,900 for the GT-Line e-AWD. While these prices may appear steep for a three-row SUV, they are competitive in the context of the limited options in the fully electric SUV market at this price point.
It is essential for Kia to avoid exorbitant markups on the EV9 to ensure a successful launch and maintain its competitive edge in a market segment that is rapidly evolving. By taking a stand on this issue and offering incentives to dealers who prioritize reservation holders, Kia demonstrates its commitment to providing customers with a fair and transparent purchasing experience for its highly anticipated electric SUV.
