Friday, July 12, 2024

President Joe Biden open to discuss with South Korean leaders for federal tax incentives

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President Biden is open to continuing talks with South Korean leaders about the Inflation Reduction Act that makes EVs like Hyundai and Kia ineligible for federal tax incentives.

To qualify for a tax credit under the new law, electric vehicles need to be assembled in North America with battery packs and also need to be assembled locally with battery materials sourced directly or from a country with a free trade agreement with the US.

South Korean electric vehicles such as the Ioniq 5 and and Kia EV6 are manufactured exclusively in their home country and therefore do not qualify for federal tax incentives.

Biden recently gave his assurances to South Korean president Yoon Suk-yeol after the leader sought help from the US leader to allay his concerns.

“We assess that President Biden reaffirmed his understanding of our concerns through a personally signed letter … it shows Biden’s willingness to consider South Korean companies in the future,” a South Korean official told Reuters.

Earlier, U.S. Senator Raphael Warnock of Georgia introduced the Affordable Electric Vehicle Act for America, which introduces the EV procurement transition period and manufacturing requirements set out in the Inflation Reduction Act.

Hyundai plans to build a $5 billion production facility in Georgia which is expected to be operational by 2025.

Officials from South Korea have been vocal about the Inflation Reduction Act for making electric vehicles from Hyundai or Kia eligible for tax incentives.

Kia Corp to build electric vehicles in the US from 2024 to get EV tax credit

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