new U.S. clean energy lawhas lit a fire under the production efforts of some foreign brands. In order to qualify for the $7,500 electric vehicle tax credit, EVs now must also be built domestically.
In order to meet the requirements for upcoming EVs, South Korean-based automaker
Hyundaiis working to move production efforts stateside much sooner than previously planned.
Read on with the car ownership experts at super app Jerry to learn more about this new law and when Hyundai plans to complete the construction of its Savannah, Georgia manufacturing plant.
Why foreign automakers are scrambling to open US plants
The new tax credit restrictions come as part of the Biden administration’s Inflation Reduction Act, which was signed into law over the summer. While the act alleviates some frustrations for automakers by lifting the 200,000 unit eligibility cap for a full year, it came with a few added stipulations as well.
Income limits would prohibit joint filers that make over $300,000 and individuals that make over $150,000 from access to the tax credit. That amount is halved for used EVs.
Lastly, the final assembly of the vehicle must take place in the U.S. in order to qualify. According to
The Verge, this includes brands like Hyundai, Genesis, its affiliate brand Kia, several European brands, and even a few domestic automakers that rely on foreign-sourced materials.
Bloombergreported that, while Hyundai had initially planned on a 2025 opening date for its new Savannah, Georgia plant, the brand is now looking at completing construction as early as October of 2024.
Are Hyundai EVs worth it?
Hyundai currently offers three EVsthat will now be excluded from the federal tax credit, the Kona Electric ($35,245), the IONIQ 5 ($41,195), and the IONIQ Electric ($34,250). Hyundai’s luxury sub-brand Genesis is also launching its first electrified vehicle with the
2023 Genesis GV60 EV, starting at $59,995.
Kiaalso has three EV offerings, the 2022 Kia Niro EV ($39,990), 2022 EV6 ($40,900), and the 2024 EV9 SUV. Pricing for the EV9 has yet to be released.
In spite of no longer qualifying for the $7,500 tax credit, it should be noted that these cars are still very highly rated and competitively priced. If you’re shopping for an EV, it could be worth it to give one of these foreign-made cars a test drive before making your final choice.
In spite of the short-term struggles for some automakers, the new law will hopefully work as intended to create more jobs across the U.S. and potentially strengthen domestic interest in EVs as well.
How to save money on a new EV
Losing out on a $7,500 tax break to get your dream car can be a tough blow, but there are other ways you can save to help make up the difference. The average
Jerryuser saves over $800 a year on car insurance.
A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and can even help you cancel your old policy. To ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. Sign up today!