Earlier this year, President Biden signed the Inflation Reduction Act, which created new tax credits for EV purchases, including used EVs for the first time. Though praised as a significant step forward for climate change mitigation and the environment, vehicles must meet strict requirements to qualify for the tax credits. To meet the requirements for its newest EV, Kia plans to move some manufacturing of the exceptionally popular EV6 crossover.
The EV Officials reported that the South Korean automaker plans to build the EV6 in the U.S. in 2024 to meet the new legislation’s requirement that only North American-built EVs qualify for the credits. Even so, there’s language in the bill that requires increasing percentages of U.S.-based battery materials and assembly. That affects Volvo, Volkswagen, Toyota, Subaru, and others, meaning that a significant number of EVs on sale today won’t qualify for a credit come January 1, 2023.
Kia and its corporate cousin Hyundai combine for second place in the EV market here, so, understandably, they’ve called the legislation discriminatory. The pair have gone so far as to threaten legal action over the issue, but it appears they’ve decided that it’s easier to build the cars here instead.
Other automakers have taken similar steps in the last year. Volkswagen now builds its ID.4 electric crossover at its plant in Chattanooga, TN, and Mercedes builds the EQS electric SUV in Alabama. Others like Toyota and Subaru have further to go, as their first EVs are made in Japan and China.