"Commercial Electric Vehicles Eligible for Subsidies" Accepted by the US... Limited Benefits Expected in Han

Hyundai Motor's exclusive electric vehicle Ioniq 5

[Asia Economy Reporter Choi Dae-yeol] Although the U.S. government has decided to provide tax credit benefits for commercial electric vehicles such as leases, it is expected that Korean electric vehicles will not immediately reap significant benefits. This is because the sales network has been primarily expanded targeting individual customers, making it difficult to quickly broaden other demand channels.

On the 30th, Hyundai Motor Group stated regarding the additional tax credit guidelines from the U.S. Department of the Treasury, "We believe that Korea's opinions have been reflected, and we plan to actively utilize this by expanding lease programs, etc. We will work closely with the Korean government to find various measures to minimize the negative impact caused by the U.S. Inflation Reduction Act (IRA)."

According to the company, among the electric vehicles sold by Hyundai, Kia, and Genesis in the U.S., only about 5% are sold commercially through leases or similar methods. Commercial sales involve selling to companies that rent or lease vehicles, which is relatively less profitable compared to individual customers. After production disruptions due to COVID-19, supply lagged behind demand, and most automakers, including Hyundai, devised sales strategies focused on individual customers.

For Hyundai Motor Group, it is not easy to meet the 'final assembly in North America' requirement before 2025. Therefore, they have requested a deferral of the Inflation Reduction Act application for companies that qualify for tax credits on commercial vehicles or have committed to local facility investments. Since only the former was accepted this time, it is evaluated that the worst-case scenario has been avoided.

The company is reportedly preparing promotional activities such as expanding programs to broaden the commercial electric vehicle sales network in line with the new U.S. Treasury guidelines. They plan to increase the commercial sales volume, currently about 5%, to double digits in the mid to long term.

An industry insider said, "According to the regulations released so far, even automakers producing electric vehicles locally find it difficult to meet requirements related to battery assembly or raw material composition such as minerals. After specific guidelines are finalized early next year, the fortunes of companies will clearly diverge."

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