With a built-in Tesla North American Charging Standard (NACS) plug, more range, upgraded software and a new all-terrain XRT model, the 2025 Hyundai Ioniq 5 may be one of the most promising new electric vehicles on the market. Yet despite now being made in Georgia instead of South Korea, the Ioniq 5 doesn't qualify for any EV tax credits—not yet, anyway.
It should soon, Hyundai Motor America officials said at the car's media launch this week. And until it does, Hyundai's dealers are baking the $7,500 discount right into the price of financing the car. And all EVs, regardless of origin or battery pack, quality for the $7,500 credit if they are leased.
John Shon, the senior group manager of product planning for Hyundai Motor America, said that right now the Ioniq 5's batteries are made by the Korean company SK On at a plant in Hungary. For that reason, it doesn't qualify for any tax credits, even though it's now built at Hyundai's Metaplant in Georgia. But from March onward, Hyundai and SK On's Georgia battery factory will supply its power cells instead, and that should put the car back in the tax credit game.
"That will qualify [it] for the tax credits around March," Shon said. He added that the Ioniq 5 will then secure the full $7,500 tax credit. "That said, we're still making our customers whole through incentive programs." Shon said that this meant cash-back deals when the Ioniq 5 is financed, or the $7,500 credit that is currently applied to any EV when it's leased, regardless of its manufacturing origin.
The EV tax credit, passed under the Inflation Reduction Act (IRA) of 2022, is meant to incentivize automakers to build their electrified cars and batteries in North America. The move was designed to spur local manufacturing, which Hyundai is now doing in force with its future EVs and hybrids, while reducing America's dependence on China for batteries.
The system has often been quite convoluted, however, leading many customers to simply lease their EVs for a guaranteed $7,500 tax credit discount. The Hyundai Motor Group's combined three brands—Hyundai, Genesis and Kia—finished 2024 second to Tesla in EV sales, but the vast majority were leased.
Perhaps the biggest question is whether the tax credits themselves will survive 2025. President Trump has vowed to end the program, but most experts believe an act of Congress would be needed to repeal all or parts of the IRA. Since Trump returned to the White House, auto industry officials have urged his administration to keep the program going, as it will likely help automakers deliver on their U.S. job investments and future sales goals.
The 2025 Hyundai Ioniq 5 Starts At $43,975 for the base SE Rear-Wheel Drive Standard Range, and goes up to the Limited Dual Motor model at $59,574. The EV has between 245 and 318 miles of range depending on its trim level, battery side and powertrain. It is the first non-Tesla car to come with a Tesla-style plug from the factory and have native access to that automaker's Supercharger network.
Our first-drive review of the 2025 Ioniq 5 and Ioniq 5 XRT will be published next week on InsideEVs.
Contact the author: patrick.george@insideevs.com
