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Kia plans to build EVs in the US to comply with new federal tax credit

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Photo by Roberto Baldwin for The Verge

Kia is planning to manufacture its electric vehicles in the US, according to South Korean media sources Maeil Business and SBS (via The EV Officials). The automaker currently builds its flagship electric car and North American sales hit, the Kia EV6, in South Korea at its Hwasung plant. But now, Kia will shift some of its EV assembly to the US by 2024, according to the report.

Manufacturing EVs in the US would allow Kia to qualify for new incentives that were included in the recently passed Inflation Reduction Act, which requires automakers to build EVs in North America to qualify.

Kia and its parent company, Hyundai, had threatened legal action against the US over what they see as a “discriminatory” policy. Other provisions will exclude automakers from incentives if they use Chinese-sourced minerals and battery components, which could effectively cut off almost every domestic EV manufacturer once the law goes into effect.

Hyundai and Kia combined currently hold the second-highest market share for electric vehicles in the US, a position that could be at risk if customers can’t take advantage of the new federal incentives (and man, are EVs getting expensive).

Hyundai, specifically, is making state-side investments already by building electric vehicle and battery plants in Savannah, Georgia — though it won’t be ready to go until 2025.

It might be in Hyundai’s best interest to speed up that process and start building the Ioniq 5 and perhaps even help bring Kia’s EV6 manufacturing state-side. Both vehicles are based on a shared E-GMP EV platform. And by the time Kia and Hyundai get everything set up, the automakers hopefully will have their next-generation cars, like the Kia EV9 SUV and the Hyundai Ioniq 6, ready to go.

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