[Special Stock] Hyundai Motor and Kia Drop Over 3% on News of Exclusion from US EV Subsidies

Hyundai Motor and Kia's electric vehicles are both experiencing declines in early trading on the 18th following news that they have been excluded from the U.S. government's subsidy program.

As of 9:30 a.m. today, Hyundai Motor is trading at 189,000 KRW, down 3.08% from the previous trading day on the KOSPI market.

At the same time, Kia is trading at 81,900 KRW, also down 3.08% compared to the previous day.

On the 17th (local time), the U.S. government announced a list of 16 electric vehicles (22 models including sub-models) eligible for subsidies of up to $7,500 (approximately 9.9 million KRW) under the detailed guidelines of the Inflation Reduction Act (IRA), but electric vehicles from Hyundai Motor and Kia were not included on the list.

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The IRA stipulates in its provisions that only electric vehicles finally assembled in North America are eligible for tax credits of up to $7,500.

In particular, the detailed guidelines announced at the end of last month specify that even for electric vehicles finally assembled in North America, for this year, a subsidy of $3,750 is granted if more than 50% of the battery components are manufactured or assembled in North America, and another $3,750 if more than 40% of the critical minerals are mined or processed in the U.S. or FTA countries.

Due to these stricter subsidy requirements, the number of eligible vehicles has significantly decreased from over 40 previously, with some Japanese Nissan and certain U.S.-made electric vehicles also excluded.

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