[Special Stock] Hyundai Motor and Kia Benefit from US IRA Reduction Act 3-Year Grace Period Amendment Proposal

[Asia Economy Reporter Lee Seon-ae] Hyundai Motor and Kia are on the rise from the early trading hours on the 7th. This is interpreted as a positive factor following the news that a bill to delay the US Inflation Reduction Act (IRA) by three years has been proposed.

At 9:29 a.m. on the 7th, Hyundai Motor was trading at 168,000 KRW, up 3.07% from the previous day. It rose to 169,500 KRW immediately after the market opened. Kia is trading at 66,500 KRW, up 1.99%, having surged to 67,200 KRW in the early session.

The news that a bill to delay the IRA provisions by three years was introduced in both the US House and Senate is believed to have influenced the market. On the 5th (local time), Democratic Representative Terry Sewell of Alabama introduced the "Affordable Electric Vehicle Act for America," which stipulates postponing the enforcement of the North American final assembly rule, which began last August, until December 31, 2025. The bill also proposes delaying the enforcement date of regulations on specific minerals and battery components, which are additional tax credit conditions starting next year. Earlier, in September, Democratic Senator Raphael Warnock of Georgia had introduced a similar amendment in the Senate.

Hyundai Motor and Kia's stock prices had fallen amid forecasts that their performance would inevitably be hit if subsidies were suspended due to the IRA. In response, Hyundai Motor Group stated, "Not providing tax benefits for electric vehicles assembled in Korea, a country with which the US has a Free Trade Agreement (FTA), violates both the content and spirit of the Korea-US FTA," and argued that "electric vehicles manufactured by corporations that made binding commitments to build electric vehicle plants in the US before the law takes effect should be considered as meeting the North American assembly requirements or be granted a grace period." The group has launched an all-out effort to respond to the IRA.

Last month, the US Treasury Department announced that it would collect opinions from stakeholders by the 4th of this month to establish detailed regulations of the IRA by the end of this year. Accordingly, Hyundai Motor Group has provided feedback not only on the 'Clean Vehicle Tax Credit,' which offers tax credits only for North American-made electric vehicles, but also on various provisions in the IRA that provide incentives to companies.

Hyundai Motor Group Chairman Chung Eui-sun is also making an all-out effort to respond to the IRA. Last month, Chairman Chung attended the groundbreaking ceremony of the electric vehicle-only new plant, "Hyundai Motor Group Meta Plant America (HMGMA)," held in Bryan County, Georgia, USA, and said, "We will make the new plant Meta Plant America the world's most admired top-level electric vehicle production facility." Hyundai Motor Group also plans to establish a battery joint venture in the US to respond to the IRA.

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