Hyundai and Kia Kick Off U.S. EV Production Amid Tax Credit Uncertainty

On Friday, Hyundai announced the launch of its inaugural electric vehicle production in the United States, coinciding with its affiliate Kia, which also commenced EV production in the U.S. on the same day. However, both companies have not yet provided information on whether these vehicles qualify for the $7,500 federal tax incentive.

The inaugural vehicle to come off the production line at Hyundai's electric vehicle dedicated facility close to Savannah, Georgia, will be the Hyundai Ioniq 5, as stated by Jose Muñoz, the Hyundai Motor North America CEO, during a conversation with Automotive News. The commencement of American production is scheduled for October, aligning with the accelerated electric vehicle production schedule for the U.S. that Hyundai disclosed the previous year.

Production of Kia Electric Vehicles in Georgia State

Muñoz confirmed that starting U.S. electric vehicle production with the Ioniq 5 was the obvious choice, as it's the top-selling model. "Therefore, it's clear that it should be the one," he said.

Hyundai is aiming to increase its electric vehicle and battery pack production to about 300,000 units annually at its upcoming Georgia facility, which is a segment of a massive $7.6 billion production hub that encompasses a collaborative battery factory with LG Energy Solution. According to Muñoz in a discussion with Automotive News, the battery facility is expected to commence operations approximately a year after the assembly plant. Until then, Hyundai intends to procure batteries from SK On's manufacturing site in Hungary.

Upcoming 2024 Kia Electric Vehicle Model

According to a report by Automotive News, the manufacturing plant is set to produce a range of six models for Hyundai, Kia, and Genesis brands. Back in April, Hyundai announced a shift from their original intention of exclusively producing electric vehicles at this factory, now including hybrid vehicles in their production lineup. Meanwhile, Genesis, which represents the high-end division of the Hyundai Motor Group, has commenced the production of its Electrified GV70 electric SUV at a different facility located in Alabama.

Production of the Kia EV9 commenced this Friday at the car manufacturer's established plant in West Point, Georgia, although some of Kia's electric vehicles will be assembled at the Metaplant.

Electric vehicles manufactured at both facilities will face stricter regulations concerning the source of their batteries and the materials used in them, leaving it uncertain at this time if these first versions will be eligible for the entire $7,500 incentive.

Hyundai Motor America informed Green Car Reports that further information and particularities will be disclosed as the production date approaches.

Previously, Kia had predicted that the EV9s manufactured in the U.S. would be eligible for the tax credit. However, this was before the government released new guidelines in December, which will take effect in January 2024 and restrict the inclusion of foreign components in the battery to a broader range of items considered to be of "low value." Green Car Reports has contacted Kia to inquire if they anticipate their new American-made EVs will meet the criteria for the tax credit in full or partially right from the start.

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