Washington, Seoul to hold formal talks on US EV tax credit act

WASHINGTON D.C. – South Korea and the United States have agreed to launch formal negotiations over ways to address the negative impacts of the Inflation Reduction Act on imported Korean electric vehicles.

Cho Tae-yong, Korean ambassador to the US, said both sides will soon hold a bilateral meeting in Washington.

“We have met with US administration and congressional officials to emphasize the unfairness of discriminatory measures against Korean electric vehicles, and the US side has not presented any differing views,” he told a media briefing with Korean reporters in Washington D.C. on Monday.

“We have continuously monitored the Inflation Reduction Act and the Build Back Better (BBB) Act, the basis of the IRA.”

The ambassador said Korean government officials will actively engage in talks with US congressional and government officials over the issue.

Earlier this month, US President Joe Biden signed the $430 billion IRA, which gives as much as $7,500 in tax credits to “Made in USA” electric vehicles.

The law, aiming to diminish China’s power in the global EV market, is expected to impact Korea’s finished car makers as well. Hyundai Motor Group’s main EVs, such as the IONIQ 5 and the EV6, are manufactured in Korea and exported to the US.

A Korean delegation led by Deputy Trade Minister Ahn Sung-il also flew to Washington earlier this week to convey Seoul’s concerns.

After meeting with the delegation, the US Trade Representative (USTR) said the two sides will hold a meeting in coming weeks.

Seoul and Washington “agreed the two sides would keep in close contact on this issue over the coming weeks," the USTR said in a statement on Tuesday.

Next week, Korean Trade Minister Ahn Duk-geun will head to the US for talks with US officials.

HYUNDAI MOTOR CHIEF IN US

Hyundai Motor Co. Chairman Chung Euisun flew to the US earlier this week to meet government officials and business leaders.

He has visited the US state of Georgia, where Hyundai is building an EV plant, and asked Georgia government officials for additional incentives for the construction of the factory, according to industry sources.

In May, the state authority and Hyundai Motor Group agreed on incentives of some $1.6 billion, including tax breaks, as the Korean carmaker has decided to build its first dedicated EV and battery manufacturing facilities in Georgia.

Korean government officials and business leaders expect the outcome of the US mid-term elections in November to emerge as a key variable in addressing the IRA issue.

If Biden wins the mid-term polls, he may attempt to partially amend the act to address the concerns raised across the auto industry, industry watchers said.

Korean is also considering filing a complaint with the WTO.

Write to In-Seol Jeong at surisuri@hankyung.com
In-Soo Nam edited this article.