Hyundai looks to start U.S EV production early to catch new incentives
Hyundai is now considering jump-starting their production in the U.S. earlier for their vehicles to qualify with incentives.
According to Reuters, an inside source at Hyundai-Kia has stated the company is now considering attempting to start U.S. production of their electric vehicles sooner rather than later. The company already planned on breaking ground on a new production plant in Georgia in 2023, with EV production starting in 2025; news of new U.S. incentives may shift this schedule forward.
The “Inflation Reduction Act” written into law by President Biden will now require EVs to be domestically assembled to qualify for federal incentives. This requirement had led many foreign manufacturers to scramble to plan new production facilities that could mean that their vehicles would remain covered by the latest incentives: Hyundai-Kia is just one of them.
While Hyundai-Kia’s original plan to break ground in 2023 and start EV production in 2025 was already ambitious, the company may be considering breaking ground later this year to start production at the facility by mid-2024. The planned facility would have a capacity of 300,000 units annually.
Currently, Hyundai-Kia’s lineups offer a compelling set of electric and electrified vehicles, most notably the Hyundai Ioniq 5, which won Car and Driver’s EV of the year. However, with the new EV incentives structure, their products may be uncompetitive as only domestically produced options would receive the large $7,500 incentive. The auto industry overall has criticized the new act due to the high requirements that manufacturers must meet to earn incentives.
Some have stated that the new act is anti-competitive due to its bias toward American assembly. Reuters states in their report that the South Korean government is considering issuing a formal complaint with the World Trade Organization over the act’s passage.
Elon Musk was yet another who has criticized incentive structures more generally. He instead argued for all incentives (for both oil and gas producers and electric vehicle manufacturers alike) to be removed. With these incentives only now rolling out, many will be looking to see if the act can increase EV adoption and how foreign manufacturers and countries will react.
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