To Find a Breakthrough
Hyundai Motor Group chairman Chung Eui-sun hurriedly left for the United States on Aug. 23 to deal with the fallout from the implementation of the Inflation Reduction Act (IRA) in the United States.
Hyundai Motor Co.'s IONIQ 5 and Kia Corp.'s EV6 electric vehicles were excluded from the list of models eligible for tax credits on Aug. 16 (local time) as the IRA went into effect. Under the IRA, a tax credit of US$7,500 per unit is given only to EVs that are produced in North America. Currently, Hyundai and Kia's EVs sold in the United States are 100 percent produced in Korea and exported to the U.S.
If Korean-made EVs are excluded from subsidies, they will lose their price competitiveness. Thus, Hyundai Motor Group is seeking various countermeasures, in cooperation with the Korean government.
The group is planning to advance the completion of an EV-only plant in the U.S. state of Georgia from the first half of 2025 to the second half of 2024. However, even in this case, Hyundai and Kia cars will be excluded from the subsidies for at least two years. Therefore, the Korean automaker is considering converting production lines in the Alabama plant to assemble EVs.
Hyundai Motor plans to produce the Genesis G70 EV at its Alabama plant beginning from December 2022, but the plant's main focus will still be put on internal combustion engine-powered models such as the Santa Fe, the Tucson and the Avante.
Earlier, Chung met with Pat Wilson, commissioner of the Georgia Department of Economic Development (GDEcD), in Seoul on Aug. 20. They exchanged opinions regarding the early start of the EV plant in Georgia. Hyundai Motor Group also operates a Kia plant in Georgia. For this reason, some analysts are raising the possibility of converting part of the production lines at the Alabama or Georgia factory to an EV line to produce the IONIQ 5 and 6 or the EV6.