Some news in the EV market: Hyundai Motor Group, which includes the Kia and Genesis brands, has models that now qualify for the $7,500 federal electric vehicle tax credit.
The EV tax credit, a key component of President Biden's signature Inflation Reduction Act (IRA), has become a popular incentive for consumers interested in switching to electric vehicles. While some industry manufacturers, like Tesla, have had various models on and off the official list of eligible vehicles, this is the first time since the IRA was enacted that the Korean automakers' EVs qualify for the incentive.
In recent years, as Kiplinger reported, South Korea was vocal in its belief that strict EV tax credit requirements meant many EVs, including those made by Hyundai and Kia, wouldn’t qualify. However, the manufacturer made strategic moves that helped make five models eligible for the tax break.
The eligibility, effective January 1, 2025, is expected to enhance Hyundai and Kia's competitiveness in the U.S. market. However, this development comes as President-elect Trump’s transition team has signaled an intention to eliminate the EV tax credit.
So, if you’re in the market for an electric vehicle and are excited about the Kia and Hyundai models, here’s what you need to know.
Hyundai IONIQ 9, Kia EV6 among cars that qualify for the EV tax credit
The federal EV tax credit is up to $7,500 for new eligible "clean vehicles" and up to $4,000 for used eligible EVs.
The credit amount considers factors like the vehicle’s price, sourcing, and assembly (which must primarily be in North America for the full credit) and when you placed your vehicle into service.
Five electric vehicles from the Hyundai Motor Group are now among twenty-five EV models that qualify for the federal tax credit:
The new eligibility stems from recent production shifts to meet the IRA's North American assembly mandate. For example, Hyundai began production at its new multibillion-dollar EV manufacturing plant in Georgia last fall.
Kia also started manufacturing its popular EV6 and EV9 models in Georgia, while the Genesis Electrified GV70 was built at Hyundai's plant in Alabama.
Some hope that including the Hyundai and Kia models in the tax credit program will positively impact the EV market. For example, with a reputation for competitive pricing, these newly eligible models could attract more consumers to electric vehicles.
The EV credit's uncertain future
While this is positive for some Hyundai and Kia enthusiasts, the timing is interesting since the future of the federal EV tax credit program is uncertain. As mentioned, the incoming Trump administration has indicated plans to potentially eliminate the incentive.
Repealing the EV tax credit would require congressional approval, likely as part of a larger tax reform package. So, the tax credit's fate isn't yet sealed and will probably be a point of contention in upcoming legislative debates on Capitol Hill. (Stay tuned and consider leveraging clean energy tax credits sooner rather than later to benefit from existing savings opportunities.)
One such opportunity involves benefiting from the EV tax credit at the point of sale. As of last year, registered dealers can pass EV credit savings on eligible vehicles to you when you buy, so you don't have to wait to file your return to save. For more information, see The Point of Sale EV Credit is a Hit.
Also, it's important to remember that income limits apply to this tax break. You won't qualify for the EV tax credit if you're single and your modified adjusted gross income (MAGI) exceeds $150,000.
The income limit for married couples filing jointly is $300,000. And, if you file as head of household and make more than $225,000, you also won’t be able to claim the electric vehicle tax credit.
