Hyundai is on a hot streak in the U.S., but Biden’s Inflation Reduction Act could spoil it

by | Nov 23, 2022 | Business

Drew Angerer | Getty Images News | Getty ImagesSAVANNAH, Ga. — Hyundai Motor Group is having its best years ever in the U.S.The South Korean automaker has successfully moved from bargain economy vehicles and dancing hamsters to competing against formidable automakers in the highly profitable American market.related investing newsThe company’s Hyundai, Kia and Genesis brands are expected to capture nearly 11% of the U.S. new vehicle market this year — marking its highest level since the automaker entered the country in 1986. It’s also set to be among the top sellers of electric vehicles this year, trailing only Tesla through the third quarter.But whether the world’s fourth-largest automaker by sales last year can continue that winning streak, especially in EVs, is in question. In August, Hyundai buyers lost federal tax credits associated with purchasing an electric vehicle due to changes in the program under the Biden administration’s Inflation Reduction Act.Domestic automakers, including Hyundai’s closest competitors in EVs — Tesla, Ford Motor and General Motors — still qualify for the credit. All of Hyundai’s electric vehicles are currently imported to the U.S., though it produces several gas-powered models at plants in Alabama and Georgia.Hyundai Motor Co. CEO Jaehoon “Jay” Chang, in an exclusive interview with CNBC, described the loss of incentives as concerning and a “very challenging issue.” But he said he believes the automaker can continue its long-term growth in the U.S., despite the near-term hiccup.”IRA, short term, it gives us some limitation on the customers’ choice,” Chang told CNBC last month as the company celebrated the groundbreaking of a new $5.5 billion electric vehicle and battery plant in Georgia. “For the long term … we have a very solid plan. … I think we can be competitive.”Hyundai, including Genesis, and Kia are owned by the same Seoul, South Korea-based parent company but largely operate separately in the U.S.Navigating IRAHyundai, Kia and other non-domestic automakers have been vocal opponents of the new electric vehicle tax credit regulations under the IRA. The law, passed by Congress in August, immediately eliminated a tax credit of up to $7,500 for plug-in hybrid and electric vehicles that are imported from outside North America and sold in the U.S.Hyundai is working closely with public officials in the U.S. and South Korea to change the regulations or secure the automaker an exemption, Chang said. U.S. officials confirmed such discussions are ongoing, including a meeting last week between U.S. Trade Representative Katherine Tai and South Korea’s Minister for Trade, Ahn Dukgeun.Hyundai argues its investment in Georgia — the largest economic development project in that state’s history — should count for something in the way of an IRA revision.Hyundai executi …

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