Hyundai’s $5.5 billion EV plant in the U.S. facing incentives settlement issue

Hyundai Motor Group may not get full incentives for its $5.5 billion electric vehicle (EV) plant in the U.S., fears the car maker.

Korea’s Seoul Economic Daily says the U.S. Department of Energy is delaying a request for 30 percent tax incentives for the new Hyundai plant in Georgia. Thus, putting an inconclusive pause on millions of dollars in incentives.

Hyundai has approached the Energy Department to claim a 30 percent tax credit under the Inflation Reduction Act (IRA). This incentive scheme for investors is called the 48C Manufacturing Tax Credits program and it offers up to 30% incentives for clean energy projects.

The report mentioned that Hyundai is expecting around $350 million in incentives, which was calculated by applying the maximum 30% to its corporate tax rate of 21 percent.

A Hyundai Motor representative said that the automaker is in discussion with the U.S. government but “Nothing has been decided and we’re waiting for the result”.

In 2022, Hyundai broke ground on a new manufacturing plant at the Bryan County Mega site in Georgia with an investment of $5.54 billion. The plant aims to produce new EVs from Hyundai, Genesis, and Kia brands. This facility expects to begin commercial production in the first half of 2025.

Other than Hyundai, Korean battery makers are also establishing multi-billion dollar investments in the U.S. to build their manufacturing factories. However, these brands have not commented on their conversation regarding investment subsidies.

(via – Koreanherald)