Hyundai Motor chief visits US amid new EV tax break law

Seoul, Aug 24

Hyundai Motor said on Wednesday that its Chairman Chung Euisun was visiting the US amid growing concerns over a new law excluding electric vehicles (EVs) built outside the country from tax breaks.

The South Korean carmaker didn't provide any details about Chung's US schedule, reports Yonhap news agency.

Chung was expected to meet US government officials and business leaders to explain the carmaker's situation as it relates to the recently passed Inflation Reduction Act (IRA) and ask them to "help improve an unreasonable part" of the IRA, auto industry officials said.

Last week, US President Joe Biden signed the $430 billion bill, which allows up to $7,500 of tax subsidies only for EVs assembled in the the country.

The new law is expected to deal a blow to Hyundai Motor and Kia, key affiliates of the group, which manufacture all of their EVs at home.

It is also putting the two Korean carmakers at a disadvantage in the world's most important automobile market where local rivals, such as Tesla and General Motors build EVs and receive full state subsidies.

The passage of the IRA comes months after Hyundai Motor announced its plan to invest $5.54 billion to start construction on a 300,000-unit-a-year EV plant in Georgia in January 2023 and begin production in the first half of 2025.

In response, Hyundai Motor, the main affiliate of the group, is considering speeding up the construction of its dedicated electric vehicle (EV) plant in the U.S., industry sources familiar with the matter said.

Hyundai Motor will consider starting construction of its $5.54 billion EV and car battery plant in Georgia later this year, under a goal of commencing production in the second half of 2024.

It was originally planning to start construction on the U.S. EV facility in January 2023 and begin production in the first half of 2025.

Hyundai Motor plans to roll out 17 EV models by 2030, including six Genesis models, with Kia scheduled to release 14 EVs by 2027.

Hyundai and Kia, which together form the world's fifth-biggest carmaker, aim to sell 3.23 million EVs, including 840,000 units in the US, in 2030 to account for 12 per cent of the global EV market. Their share stood at 5 per cent last year.

Hyundai said it could start producing the all-electric version of the Genesis GV70 SUV at its Alabama plant from late this year but the Hyundai IONIQ 5 and Kia EV6 will be produced at their domestic plants for exports.