The law aims to reduce the auto industry’s dependence on China, which makes most of the world’s batteries and dominates the processing of raw materials. The law also sets limits on sales prices and excludes individuals earning more than $150,000 a year and couples earning more than $300,000. The rules also exclude vehicles made outside of North America, including allied countries such as South Korea and Germany.
“We weren’t happy,” Jose Munoz, chief executive of Hyundai and Genesis Motor North America, said in an interview at the New York International Auto Show this month. Hyundai’s Ioniq 6 electric sedan was named World Car of the Year at the show, but it won’t be eligible for tax credits because it’s assembled in Korea.
Seoul-based Hyundai is investing $10 billion to build car and battery plants in Georgia, which will allow the company to meet the requirements of the Inflation Reduction Act, but not for several years.
Automaker and Korean government officials asked the Biden administration to allow Hyundai and Kia cars to get credits while factories are under construction, but were told the law did not allow for such an exception , said Muñoz.
Hyundai’s Georgia auto plant is expected to start producing cars in 2025. The battery plant, which Hyundai is building with SK On, will begin production in 2026. “We are working to advance that date so we can qualify before,” said Mr. . Munoz said.
Tesla had already told potential buyers that the least expensive version of the Model 3 sedan would only qualify for half the credit, or $3,750. This month, Tesla dropped the price of this car by $1,000 to $41,990. After accounting for partial credit, the car will cost many buyers a little more than $38,000, about as much as a top-of-the-line Honda Accord and cheaper than an entry-level BMW 3 Series sedan.
Other versions of the Model 3 and Model Y SUVs will continue to receive full credit. Tesla sold more electric vehicles in the U.S. last year than all other automakers combined, according to Kelley Blue Book.
