U.S. Car Brands Will Benefit Most From Electric Car Tax Breaks

The law seeks to reduce the auto industry’s reliance on China, which makes most of the world’s batteries and dominates the processing of raw materials. The law also establishes limits on sales prices and excludes individuals who earn more than $150,000 a year and couples who make more than $300,000. The rules also exclude vehicles made outside North America, including in allied countries like South Korea and Germany.

“We were not happy,” José Muñoz, the chief executive of Hyundai and Genesis Motor North America, said in an interview at the New York International Auto Show this month. Hyundai’s Ioniq 6 electric sedan was named World Car of the Year at the show, but will not be eligible for tax credits because it is assembled in Korea.

Hyundai, based in Seoul, is investing $10 billion to build car and battery plants in Georgia, which will allow the company to meet the Inflation Reduction Act requirements — but not for several years.

Officials at the carmaker and the Korean government asked the Biden administration to allow Hyundai and Kia cars to qualify for credits while the factories are under construction, but were told the law did not allow such an exception, Mr. Muñoz said.

The Hyundai car factory in Georgia is expected to begin producing cars in 2025. The battery plant, which Hyundai is building with SK On, will start production in 2026. “We are working on putting ahead that date so we can qualify earlier,” Mr. Muñoz said.

Article source: https://www.nytimes.com/2023/04/17/business/electric-vehicles-tax-credits.html