Photo: Kia
Kia is one of the carmakers that loses the most once the new incentives in the IRA enter into full effect. It is a strong reason for the Korean carmaker to consider building electric vehicles in the U.S. as soon as possible.
The new bill will see tax credits going away for electric vehicles produced outside North America. This would not be a big problem for automakers that have exhausted their quota under the previous tax credit program. But for Kia and Hyundai, which only started selling EVs in the country not long ago, the IRA conditions are a blow to their business plans.
According to Reuters, which cites local media outlets SBS TC and Maeil Business, Kia is working around the clock to rectify that. Reports indicate that the Korean automaker will start assembling electric vehicles in the U.S. beginning in 2024. This is the same year the IRA’s tax credits become available. Hence, the deadline is imperative if Kia wants to keep its customers happy. Without the tax credits, Kia would have to either settle for much fewer customers (by selling more expensive EVs) or a much thinner margin on its vehicles sold in the U.S.
In the coming months, we expect more carmakers to change their strategy toward the North American market. Several EV battery makers have already announced plans to build factories in the U.S. or signed contracts to source raw materials from Canadian companies. This is all thanks to the Inflation Reduction Act, which promises hefty incentives for every kWh of EV batteries manufactured in North America.
Tesla, for instance, is pushing for increased battery production in the U.S. to benefit from IRA’s generosity. This shift was thought to hamper the ramp-up at Giga Berlin. Still, Tesla denied it and said it would simultaneously ramp its battery cell production at Giga Texas and Giga Berlin.
According to Reuters, which cites local media outlets SBS TC and Maeil Business, Kia is working around the clock to rectify that. Reports indicate that the Korean automaker will start assembling electric vehicles in the U.S. beginning in 2024. This is the same year the IRA’s tax credits become available. Hence, the deadline is imperative if Kia wants to keep its customers happy. Without the tax credits, Kia would have to either settle for much fewer customers (by selling more expensive EVs) or a much thinner margin on its vehicles sold in the U.S.
In the coming months, we expect more carmakers to change their strategy toward the North American market. Several EV battery makers have already announced plans to build factories in the U.S. or signed contracts to source raw materials from Canadian companies. This is all thanks to the Inflation Reduction Act, which promises hefty incentives for every kWh of EV batteries manufactured in North America.
Tesla, for instance, is pushing for increased battery production in the U.S. to benefit from IRA’s generosity. This shift was thought to hamper the ramp-up at Giga Berlin. Still, Tesla denied it and said it would simultaneously ramp its battery cell production at Giga Texas and Giga Berlin.
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