Tax credit changes could hurt Hyundai and Kia EV sales

Hyundai and Kia are anticipated to lose EV market share due to the Inflation Reduction Act.

Thanks to the Hyundai Ioniq 5 and Kia EV6, Hyundai Motor Group is the second-best seller of electric vehicles in the U.S. It sold more EVs than Ford, Volkswagen, and GM between January and July. This may change.

As part of the Inflation Reduction Act, federal EV tax credits require North American-built vehicles. Hyundai and Kia's EVs are made in Korea, therefore this is bad news. Some dealers report a change.

Andrew DiFeo, a Florida-based dealer, told Reuters that some potential buyers have dropped Hyundai EVs.

If all things are equal and if I buy this one I get a $7,500 tax credit and if I buy that one I don't, I love you Hyundai but I'll buy the one with the tax credit.

Hyundai isn't ignoring North America. In fact, it's committed to developing a $5.5 billion EV plant in Georgia, which Biden praised, adding, "We won't let you down."

Senior Hyundai official: "So much for not letting us down." "It's chaotic."

South Korean officials met with U.S. counterparts to express concerns. Euison Chung, chairman of Hyundai Motor Group, was also in Washington.

South Korean officials have petitioned the Biden administration to delay the new requirements until 2025. Tax credit modifications may also contravene the U.S.-South Korea FTA.

“Our U.S. EV manufacturing plan was to seek subsidies due to the rising EV demand in the U.S.,” a Hyundai official said.