Hyundai Seeks To Sidestep US Tax Credit Barriers With $7,500 EV Cash Incentives

Hyundai Motor Co. HYMTF is offering up to $7,500 in cash bonuses for American buyers of its electric vehicles (EVs) in a bid to catch up to players, including Tesla Inc TSLA, whose select vehicles qualify for a federal tax credit in the same amount. This month-long scheme will be in effect until January 31, 2024.

What Happened: The cash discounts will apply to Hyundai’s Ioniq 5, Ioniq 6, and Kona Electric models, Bloomberg reported. The company’s EVs are not currently eligible for tax credit under President Joe Biden’s Inflation Reduction Act (IRA).

As per recent data compiled by Kelly Blue Book, a research firm under Cox Automotive, Hyundai and Kia sold 87,597 electric vehicles in 2023, overtaking both GM and Ford individually. Despite not having an operational EV plant in the US, the company has positioned itself as a major contender in the industry, second only to Tesla.

Why It Matters: Only a few electric vehicles qualify for federal EV tax credit after the rules were made more strict to reduce the EV industry’s reliance on foreign players like China.

However, five vehicles from Tesla, including all versions of its best-selling Model Y SUV, continue to be eligible, posing competition to Hyundai’s best-selling Ioniq 5 SUV or Kia’s EV6.

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