Japan, South Korean leaders push for US EV tax credit rule changes

Published

2 years ago

November 4, 2022

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South Korean officials and leaders from Japan are expressing concerns over the new US EV tax credit requirements that kick in at the end of the year. New reports are surfacing that Japan and South Korea will request flexibility in the rule changes. Will they get their way, paving the way for automakers like Toyota, Hyundai, and Kia electric vehicles to qualify?

The Biden Administration passed the landmark Inflation Reduction Act (IRA) in August, introducing a new set of incentives to buy an electric vehicle with up to $7,500 in tax relief.

However, for an automaker’s EV model to qualify, it must meet strict battery sourcing and assembly requirements. Half of the tax credit ($3,750) is concerning using critical EV battery minerals, which states at least 40% of the value of the minerals used must be manufactured or assembled in the US or with its free trade partners.

The other half ($3,750) covers the EV battery components, requiring at least half the value to be manufactured or assembled in North America.

Although the initiative is driving significant manufacturing investments in the US (+$40 billion) and job creation (+642,000 jobs added since 2021), several leaders believe it’s unfair for foreign automakers.

South Korean automaker Hyundai, in particular, has expressed concerns over the upcoming changes. Hyundai had already announced its plans to build a $5.5 billion mega EV facility in Georgia in May before the IRA was passed.

Since the new climate initiatives passed in August, South Korean officials have lobbied with US leaders for a grace period to be included in the tax credit, expressing major concerns. Nonetheless, Hyundai accelerated its construction plans, breaking ground on October 25, 2022, rather than early next year.

South Korean officials are not the only foreign leaders concerned with the new rulings. The EU has also asked the US to allow European automakers to qualify for the tax credit.

Today, new reports are surfacing that South Korean officials and leaders from Japan are asking for more flexibility for non-American carmakers.

Japan-South-Korean-EV (2) — Hyundai IONIQ 5 (Source: Hyundai)

Will Japan, South Korean EV models qualify for the US tax credit?

According to a report from the Kyodo news agency, Japan will soon submit a request for added “flexibility” in the US EV tax credit for foreign automakers.

Japan intends to:

Make nearly completed cars exported from Japan eligible for the tax credits as long as the final process takes place in the United States, Canada, or Mexico.

Furthermore, the Japanese government will also ask for its country to be included in the critical mineral tax requirement that currently includes US free trade nations.

The news comes shortly after a statement suggesting South Korean officials are pushing for a three-year grace period to allow its automakers to receive the EV tax credit until they get operations up and running at its Georgia facility.

Electrek’s Take

I believe it would make sense to include South Korean automakers like Hyundai and Kia in the EV tax credit, considering they already established plans to build electric vehicles before the IRA tax credit.

Before the new bill was passed, models such as the Hyundai IONIQ5 and Kia EV6 qualified, but when the new requirements kick in at the beginning of the year, that will no longer be the case. Giving them time to build and scale production is fair. There’s not much else the company can do at this point.

I get the idea of bringing manufacturing back to the US, but kicking automakers out when they are already building on US soil may do the opposite by discouraging foreign leaders from working with the US.

I’m not saying every EV model deserves to qualify. There should still be requirements, but a grace period while they ramp production wouldn’t hurt.

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What makes a Honda a Honda? Prologue engineers help us find out!

Published

4 hours ago

November 16, 2024

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What makes a Honda a Honda? Prologue engineers help us find out!

On today’s informative episode of Quick Charge, we’ve got Honda engineers Jason Hwang and Emilio Sanchez to talk us through some of the things that make the GM Ultium-based Honda Prologue EV feel like a real Honda, and why that matters.

Jason and Emilio talk about some of the choices they made to make the Honda Prologue and Acura ZDX feel different from its GM-branded cousins, and explain why this was much more than a case of badge-engineering. Give it a listen, then let us know what you think of the Prologue and ZDX in the comments.

Today’s episode is sponsored by BLUETTI, a leading provider of portable power stations, solar generators, and energy storage systems. For a limited time, save up to 52% during BLUETTI’s exclusive Black Friday sale, now through November 28, and be sure to use promo code BLUETTI5OFF for 5% off all power stations site wide. Learn more by clicking here.

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New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news!

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The Eastern US’s first CFI-funded EV charging hub comes online

Published

7 hours ago

November 15, 2024

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The Eastern US's first CFI-funded EV charging hub comes online

CF EV charging — Photo: Joint Office of Energy and Transportation

The first EV charging hub funded by the Charging and Fueling Infrastructure (CFI) Program in the Eastern US is now online in Deerfield, Massachusetts.

The town installed the region’s first DC fast chargers (four ports), along with four Level 2 chargers, at 59 North Main Street in South Deerfield.

These new charging stations, funded with $2.46 million from the CFI program, are conveniently located near Interstate 91 in Franklin County, the most rural county in Massachusetts, which serves drivers from Connecticut up to the Canadian border.

The hub also features local and regional bus stops and designated bike lanes with secure onsite bike racks. The chargers are meant to cater to everyone: from local residents and visitors to municipal EVs and commercial vehicles that service the region’s businesses, like those in food and beverage manufacturing.

Gabe Klein, executive director of the Joint Office of Energy and Transportation, sees this as a model for future projects:

Multi-modal charging hubs in communities are key to giving more people the choice to ride and drive electric. The Town of Deerfield is showing leadership in building out convenient charging infrastructure that brings new transportation choices to rural and disadvantaged communities while supporting local commerce.

In recent years, Deerfield has experienced increased climate change-driven flooding from nearby rivers, including the Deerfield River, the Connecticut River, and the Bloody Brook. The project incorporates environmental engineering designed to mitigate and adapt to the effects of flooding and climate, including the installation of permeable asphalt and rain gardens, planting of native trees, grasses, and shrubs, and the creation of new greenspace in the center of Deerfield.

The Biden-Harris administration’s CFI Grant Program is expanding EV infrastructure nationwide. It offers grants for projects that complement and expand upon the initiatives of the NEVI program in urban, rural, and disadvantaged and low-income communities. So far, the CFI Grant Program has allocated over $1 billion to nearly 100 projects across the US, encouraging private investments and expanding the EV charging network to make EV ownership more practical and convenient.

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Kia’s new low-cost EV4 was just spotted in the US for the first time

Published

8 hours ago

November 15, 2024

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Kia's new low-cost EV4 was just spotted in the US for the first time

Kia’s upcoming EV4 electric sedan was just spotted testing in the US for the first time. The low-cost EV is expected to make its big debut by the end of the year. Here’s a look at the new model.

The EV4 will round out Kia’s new “EVs for all” master plan launched last year. Kia showcased three new models, the EV3, EV4, and EV5, during its first annual EV Day in October 2023.

During the event, Kia outlined its new global strategy to “lead and accelerate the EV revolution” with a wide range of models priced from $30,000 to $80,000.

Kia plans to rapidly expand its lineup with a series of smaller, lower-priced models. It launched the EV9, its first three-row electric SUV, which is already proving to be a hot seller in the US. Starting at under $55,000, the EV9 is still a great deal compared to others in its class, but Kia plans to go even lower.

The EV3 and EV4 are expected to be among the most affordable electric vehicles when they arrive in the US.

Kia’s new EV4 is now testing in the US

Ahead of its official debut, Kia’s new EV4 sedan was recently caught driving on US streets for the first time.

The latest image from KindelAuto doesn’t reveal much more than what’s been shown in the past, but the fact that it’s now testing in the US is significant.

Kia EV4 caught on US streets for the first time (Source: KindelAuto)

Kia’s EV3 is already on sale in Korea, starting at around $30,000 (42.08 million won). Earlier this week, the company said its new compact SUV is now available across Europe, starting at around $38,000 (36,000 euros) with a “segment-leading range” of up to 375 miles (WLTP).

Next up will be the EV4. Kia is expected to officially reveal the new EV by the end of the year, with deliveries starting in 2025. It could be as soon as next week at the 2024 LA Auto Show.

The interior will feature Kia’s advanced new ccNC infotainment system with dual 12.3″ navigation and driver display screens. An otherwise minalimalistic design is expected inside.

Kia’s EV4 will also be available in a hatchback variant. Although the hatch is likely aimed at European buyers, it was also recently spotted testing in the US for the first time.