Hyundai, Kia EVs qualify for US subsidies for first time

Five electric vehicle models from Hyundai Motor Group, encompassing Kia Corp., were included in the 25 EV models qualifying for US tax credits in 2025 under the US Inflation Reduction Act (IRA), according to the US Department of Energy on Wednesday.

It marked the first time for the South Korean automotive group to receive tax benefits from Washington for its EVs since the IRA was signed into law in 2022.

It came as Hyundai and Kia have been ramping up production in the US since completing their new plants in the state of Georgia in late 2024.

Hyundai’s IONIQ 5 crossover and IONIQ 9 SUV were named among the EVs eligible for a tax credit of up to $7,500 per vehicle from the start of this year.

Kia’s two SUV models -- EV6 and EV9 – were included in the list as well, along with the Electrified GV70 sedan under the Genesis brand.

The IRA is designed to grant up to $7,500 in tax credits to buyers of EVs whose final assembly is in North America and in which a certain portion of critical minerals and battery components are sourced from the region, or its trading partner.

A total of 25 EV models from 10 carmakers were selected as the recipients of the US government subsidies. Excluding Hyundai and Honda Motor, the other vehicles are made by American brands such as Tesla, Ford Motor, Cadillac, Chevrolet and Chrysler.

Hyundai Motor launched mass production of the IONIQ 5 crossover and the IONIQ 9, its first large electric sport utility vehicle (SUV), at Hyundai Motor Group Metaplant America LLC (HMGMA) at the end of 2024. It is its newly completed EV-dedicated plant in Georgia.

The South Korean carmaker also operates assembly lines in Alabama.

Its sibling Kia is manufacturing the EV6, its first-ever all-electric SUV and the EV9, its flagship all-electric SUV, in Georgia since the end of 2024.

With the subsidies, Hyundai Motor Group’s EV sales are expected to gain momentum and generate higher profit margins. It has discounted its EVs by as much as tax credits granted to its competing models.

Hyundai Motor and Kia together sold 112,566 EVs in the US in the January-November period of 2024, a 19.3% increase from the year prior.  

But the tax credits could vanish in Donald Trump's second term. The president-elect transition team is aiming to scrap the tax benefits for EV purchases.

Write to Jin-Won Kim at Jin1@hankyung.com
 


Yeonhee Kim edited this article.