Seoul asks Washington to include car-sharing EVs in IRA

Hyundai Motor’s EV on display during a ground breaking ceremony of the automaker’s EV plant held in Atlanta, Georgia, on Oct. 26. [YONHAP]

The Korean government asked the U.S. government to include car-sharing EVs such as Uber and Lyft in the EV tax incentives under the Inflation Reduction Act (IRA).

A month ago it asked for commercial vehicles such as rental EVs to be included.

The Ministry of Trade, Industry and Energy said Friday it submitted a second so-called IRA guidance public input to the U.S. Treasury Department and the Internal Revenue Service.

Unlike passenger vehicles, commercial vehicles are not required to be assembled in North America to be eligible for a tax credit of $7,500,

Under the IRA, commercial vehicles eligible for the tax incentive are defined as “clean vehicles and mobile machinery” for business use with battery capacity of 15 kilowatt hours.

For heavy-duty vehicles, the tax credit is raised to $40,000.

The U.S. government noted that the tax credit for commercial vehicles will “help support deployment of electric or hydrogen truck and buses.”

In its first submission, the Korean government asked that the IRA tax incentives be given a grace period of three years for EV factories that were being built before the legislation went into effect in August.

Korean automaker Hyundai Motor broke ground on an EV factory in Georgia in October and expects the first EVs to be made in 2025.

The batteries in the cars must meet strict content-sourcing requirements. A certain percentage of minerals and components must come from countries that have signed FTAs with the United States.

While earlier there were concerns that the IRA would have an impact on Hyundai Motor’s EV sales along with its affiliate Kia, in October they actually rose 65 percent year-on-year.

However, according to Hyundai Motor, the EVs that were sold in October were on contracts signed before the IRA went into effect in August. The impact of the tax incentives is expected to be felt next year.

Hyundai Motor and Kia have the second-largest share in the U.S. EV market of around 9 percent after market leader Tesla.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]