IONIQ5 production line at Hyundai Motor’s Ulsan plant (Image courtesy of Hyundai Motor Group)
SEOUL, April 18 (Korea Bizwire) — Hyundai and Kia were notably absent from the list of subsidized electric vehicles selected by the US government under the guidelines of the Inflation Reduction Act (IRA).
Nonetheless, the domestic auto industry appears to be relatively calm. According to the domestic industry’s analysis, the likelihood of receiving subsidies was slim, to begin with, and commercial vehicles are not subject to IRA regulations, creating a gap that has resulted in fewer vehicles being eligible for subsidies and improving competition conditions.
On April 17, the US government announced that 16 subsidized electric vehicles (22 including sub-models) from four companies would receive subsidies ranging from $3,750 to $7,500 for meeting local assembly and battery requirements in North America. The vehicles include Cadillac Leaf, Chevrolet Volt and Equinox, Ford F-150 Lightning, and Tesla Model 3 and Model Y.
However, none of the subsidies went to Hyundai and Kia, which sell electric vehicles locally. The reason is that the IRA requires that at least 40% of the key minerals in the battery be mined and processed in the US or a country with a free trade agreement with the US, and Hyundai’s Genesis GV70 electrified model doesn’t meet this requirement.
The company plans to expand the proportion of lease sales in the US market to more than 30% to take full advantage of the subsidy requirements, accelerate the completion of the dedicated EV plant to be built in Savannah, Georgia, and work with battery companies to meet the IRA battery requirements. Battery makers are also working with their customers, automakers, to fulfill the IRA subsidy requirements.
M. H. Lee (mhlee@koreabizwire.com)
