President Joe Biden signed into law the Cut Inflation Act in late August, designed to encourage domestic production of electric vehicles and reduce reliance on foreign supply chains.
The legislation, which changes eligibility requirements for a longstanding $7,500 tax credit for electric vehicles, forces the auto industry to scramble to reshape complex production plans and supply chains in order to comply with strict procurement rules.
To benefit from the federal incentive, automakers must now assemble electric vehicles in North America. New restrictions on list price, buyer income, battery components and supply of critical minerals come into effect on January 1.
Only about 20 electric vehicles are eligible for subsidies under the new rules, including models from Ford and BMW and, from next year, GM and Tesla.
The new law caught industry off guard, including South Korea-based Hyundai Motor Group, which previously announced more than $10 billion in US investments, including a $5.5 billion EV factory. in Georgia.
Reuters reported that South Korean officials met with their American counterparts to express their concerns, and the FinancialTimes Hyundai Motor Group Chairman Euisun Chung also visited Washington.
“Our US EV factory plan was to get subsidies given the growth of the US EV market,” a company official told Reuters. “The new law affects us negatively and directly.”
Seoul asked Washington to delay the new rules until its Georgia plant is completed in 2025 and noted that the new law could violate treaties such as the US-China free trade agreement. South Korea.
Comments are closed.