US to end subsidies for Korean electric vehicles – Chosun Ilbo (English version): Hankook Ilbo

The U.S. on Tuesday suspended tax credits for all electric vehicles not made in North America.

The measure was part of the Inflation Control Act signed by US President Joe Biden. Korean vehicles are not included in the list of vehicles eligible for the US$7,500 credit for final assembly in North America. Regulations affecting the availability of EV credits will be phased in over the next few years.

About 70% of all EVs sold in the US are not listed because they are manufactured outside of North America.

The US plans to announce a new list in January next year. When the additional regulations take effect, a percentage of EV batteries and other components will be required to be manufactured in North America.

This means South Korean automakers and battery companies will need to increase production in the United States, and some have already committed to do so.

U.S. President Joe Biden (center) will sign the Inflation Reduction Act into law at the White House in Washington on Tuesday. /AP-Union

Less than half of the cars on Tuesday’s list of 21 models are from foreign-based automakers such as Audi, BMW, Mercedes-Benz, Nissan and Volvo. Tesla and GM are included, but will not be eligible for credit until next year as they have already hit their 200,000 unit quota.

Korean automakers will continue to be at a disadvantage for the time being. His EV plant at Hyundai in Georgia won’t be completed until 2025. The South Korean automaker accounted for his 9% share of the US EV market in the first half of this year, his second share behind Tesla’s 70%.

Hyundai’s Ioniq 5 and Kia’s EV6 surpassed Ford and Volkswagen in price competitiveness and quality. But without the tax credit, Hyundai would struggle to expand its presence in the US market.

Starting next year, South Korea’s three EV battery makers (LG Energy Solution, SK On and Samsung SDI) are also expected to be affected by new regulations on raw material sources and production locations.

Under the law, EV buyers can get a half tax credit if the battery is made from raw materials such as nickel and lithium from North America or countries that have free trade agreements with the United States. .Components Produced in the USA

Chinese parts will be banned from 2023, and the use of Chinese battery raw materials will be banned from 2025.

South Korean battery makers have no choice but to invest more in the US and look for sources of production materials outside of China.

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