After failing to qualify for the federal EV tax credit, Hyundai is intensifying its efforts to regain eligibility by ramping up U.S. production and sourcing more electric vehicle (EV) battery components from within the country
Hyundai’s new Metaplant in Georgia is central to this strategy, focusing on manufacturing U.S.-made EVs. The automaker had initially expected these American-made vehicles, including the 2025 IONIQ 5 and IONIQ 9, to qualify for the federal tax credit. This announcement was significant, as Hyundai’s EVs have been excluded from the credit since the Inflation Reduction Act (IRA) was enacted in 2022.
However, when the Department of Energy (DOE) released its list of EVs eligible for the federal tax credit in mid-January, most of Hyundai’s EV portfolio was notably absent. Hyundai’s luxury subsidiary brand, Genesis, also did not meet the requirements to qualify. The only Hyundai Motor Group vehicles on that made the cut were the 2025 Kia EV9 and EV6.
While the specific reasons for Hyundai’s exclusion haven’t been officially confirmed, it is widely believed that it stems from the IRA’s new battery-sourcing rules. These regulations require a higher percentage of battery components to be sourced from the U.S. or its trade partner countries.
Hyundai plans to increase U.S. production by mass-producing the 2025 IONIQ 5 at its Georgia-based Metaplant to regain eligibility. Additionally, SK Battery America (SKBA), the U.S. subsidiary of SK On, will produce batteries for both Hyundai and Kia EVs, further aligning with the IRA’s requirements.
Until Hyundai’s vehicles are eligible for the tax credit, the automaker will continue passing the $7,500 credit on to consumers through leasing options. However, potential changes in federal policy, such as President Donald Trump’s proposed plan to scrap EV incentives, could disrupt Hyundai’s strategy and plans.Â
