New Tax Credit Rules Are Squashing Sales of America’s Best EV

“On a roll” barely describes the momentum of Hyundai, now the world’s third-largest automaker, trailing only Toyota and Volkswagen. But Muñoz wasn’t all smiles in New York, thanks to federal rules that have made every Hyundai, Kia and Genesis EV ineligible for consumer tax credits — along with every foreign-built EV from Nissan, Toyota, BMW, Mercedes, Audi, Volvo and Polestar.

“All we can do is invest and pull ahead the timing for compliance,” he said. “But it’s difficult to be more committed than three plants and $10.5 billion.”Last week, the company finalized details of a $5 billion battery plant in Bartow County, Ga., in tandem with South Korea’s SK On. Slated to open in 2025, the 35 gigawatt-hour plant could crank out enough batteries for 300,000 Hyundai, Kia and Genesis EVs annually.

Karl Brauer, executive analyst for iSeeCars.com, argued that Hyundai and other automakers should have been granted a phase-in period to meet the rules. . Not for the first time, GM will kill off a model just when things are looking up. Chevy now plans to produce about 70,000 Bolt models this year, despite its lame-duck status.Then there’s the Cadillac Lyriq, of which Cadillac managed to deliver a grand total of 968 units in the first three months of 2023. That leaves the Ford F-150 Lightning — itself struggling to ramp up production — Volkswagen’s Tennessee-built ID.4, and Tesla’s Model Y and 3.

For buyers, the IRA sets new income thresholds to receive credits, including $300,000 for a married couple, and base price caps of $55,000 for electrified passenger cars and $80,000 for SUVs and pickups. .But for lease customers, none of that applies: Brands including Hyundai, Kia, Volvo, Polestar, BMW and Mercedes, shut out of buyer credits, are aggressively trumpeting cash-back deals of up to $7,500 on leases, passing the commercial credit to consumers.

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