In a rollercoaster turn of events, Hyundai and Kia EVs are expected to again qualify for the full $7,500 federal tax credit. With new models rolling out this year, the Korean auto giants expect another big year in the US in 2025.
After opening the doors to its new manufacturing plant in Georgia, Hyundai said earlier this year that US-made EVs, including the 2025 IONIQ 5 and IONIQ 9, would qualify for the $7,500 federal tax credit.
Hyundai’s new electric SUVs were expected to be among 25 models that qualified in early January. The announcement was significant given that this would be the first time Hyundai would qualify since the Inflation Reduction Act (IRA) was passed in 2022. Until now, Hyundai has been passing the credit on through leases.
An updated list released by the Department of Energy (DOE) in mid-January excluded Hyundai’s EVs. Although no official statement was made, it was expected to be due to the new battery sourcing rules.
The only Hyundai Motor Group vehicles on the DOE list were the 2025 Kia EV9 and EV6. Its luxury Genesis brand also lost eligibility.
Do Hyundai and Kia’s EVs qualify for the US tax credit?
It appears Hyundai already has a plan to regain eligibility. According to Business Korea, Hyundai will begin mass producing the 2025 IONIQ 5 next month.
At the same time, SK Battery America (SKBA), a division of SK On, will begin building batteries for Hyundai and Kia EVs, also expected as early as next month.
SK will produce batteries on 9 out of 12 assembly lines at Hyundai’s new EV plant in Georgia. The move will shift 75% of SK On’s local plant production to support Hyundai and Kia.
Hyundai and SK On’s battery plant in Bartow County can transport batteries to the new EV plant in about five hours. Once up and running, it will have roughly 16.5 GWh annual battery capacity, or enough for around 200,000 EVs.
Last year, Hyundai officials said they expected US-made EVs to qualify for a partial $3,750 tax credit until the battery plant came online.
Meanwhile, Trump’s threat to end EV incentives, including the $7,500 tax credit, could throw a loop in Hyundai’s plans.
Until then, Hyundai will continue passing the $7,500 tax credit on through leasing. With leases starting as low as $199, the updated 2025 IONIQ 5 (now with more range and an NACS port to charge at Tesla Superchargers) is even cheaper than a new Toyota RAV4 right now.
Hyundai is also offering a free ChargePoint Level 2 home charger or a $400 public charging credit for those who purchase or lease a new 2025 IONIQ 5.
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