South Korean automaker Hyundai entices prospective American electric vehicle buyers with up to $7,500 in cash bonuses after missing out on the Inflation Reduction Act’s tax credits in the United States.
Hyundai matches US tax credits
According to Hyundai’s official website, the $7,500 Retail Bonus Cash program is accessible to buyers of its award-winning Ioniq 5, Ioniq 6, and Kona Electric until January 31, 2024.
However, customers who already benefitted from a Special Lease or Low APR program through Hyundai Motor Finance (HMF) will no longer qualify for the newly launched Retail Bonus Cash program.
Hyundai’s move to match the IRA’s tax credits of up to $7,500 for electric vehicles is indeed crucial for the South Korean automaker to stay competitive in the US market.
Hyundai does not qualify for government incentives due to its lack of local production, which is a major requirement of the IRA.
IRA’s tax credit qualifications
The US government’s Inflation Reduction Act (IRA) of 2022 significantly boosted investment in local electric vehicle and battery production. According to CleanTechnica, the bill has already brought $92.3 billion in investments in this particular industry since its enactment.
It is part of the Biden administration’s efforts to cut its heavy reliance on China’s electric vehicle supply chain. As we already know, it offers up to $7,500 tax credits for EV buyers.
However, it imposes strict requirements to qualify for the EV purchase incentive. For instance, the vehicle must undergo assembly in the US or with primary parts sourced domestically.
As of today, no Hyundai EVs meet the qualifications for the tax credits. In response, the South Korean automaker aims to develop a $7.6 billion EV and battery factory in Georgia toward the end of 2024. It set an annual production target for the proposed local factory of 300,000 units.
Sales performance in 2023
Hyundai and its Kia brand’s battery electric vehicle sales reached a total of 69,259 units in the US in 2023. This remarkable sales figure enabled Hyundai to advance as the second top-selling brand behind Tesla, according to BloombegNEF.
Its popular Ioniq 5 and 6 EVs enjoyed a whopping 104% year-on-year increase to 46,917 units in 2023.
Hyundai’s move to offer up to $7,500 in cash bonuses will enable the automaker to overcome its disadvantaged position against rivals with local production that qualify for the US tax credits.
