"US: Half of Passenger Car Sales to Be Electric Vehicles by 2030 Due to IRA Impact... What About Korea?"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the Biden administration in the United States pushes to expand electric vehicle (EV) adoption through measures such as the implementation of the Inflation Reduction Act (IRA), it is projected that by 2030, more than half of the passenger cars sold in the U.S. will be electric vehicles.

On the 21st, Bloomberg News cited the industrial research firm BloombergNEF, reporting that the share of electric vehicles in total U.S. passenger car sales is expected to reach 52% by 2030. Initially, this figure was only 5% last year, below the global average of 9%, but it is anticipated to rise to 23% by 2025 and then more than double within five years.

This pace is faster than previous forecasts. BloombergNEF's earlier projections estimated the EV share at about 16% in 2025 and 44% in 2030. BloombergNEF now expects the U.S. to surpass the global average EV share two years earlier than previously thought, moving from 2028 to 2026.

Earlier, President Biden set a goal for battery electric vehicles (BEVs) and other electric vehicles to account for half of all vehicle sales by 2030. With the IRA's implementation this year accelerating EV sales growth, achieving this target appears increasingly feasible.

Under the IRA, the U.S. offers a tax credit of up to $7,500 (approximately 10 million KRW) per vehicle for electric cars that meet certain conditions, such as being assembled in North America. BloombergNEF forecasts that American automakers Tesla, General Motors (GM), and Ford will be the primary beneficiaries of the IRA in the short term.

Korean companies like Hyundai Motor and Kia, which produce electric vehicles such as the Ioniq 5 and EV6 entirely domestically, are excluded from the tax credit benefits. In response, Hyundai is considering advancing the groundbreaking of its dedicated EV plant in Georgia from the first half of next year to October this year, aiming to begin operations in the second half of 2024.

Connie Cantor, an analyst at BloombergNEF, stated, "There won't be a significant difference in sales due to the IRA until around next year," but added, "By the late 2020s, electric vehicle and battery tax credits will sharply reduce EV production costs."

This content was produced with the assistance of AI translation services.