South Korea seeks 3-year grace period on US electric vehicle tax incentive law

SEOUL, Nov 4 (Reuters) – South Korea is asking for a three-year grace period on the U.S. Inflation Act to allow Korean automakers to continue receiving incentives for electric vehicles (EVs) at United States, the Seoul Foreign Ministry said on Friday.

US President Joe Biden signed into law a $430 billion bill in August, which, among other measures, excludes Hyundai Motor Co (005380.KS) and its subsidiary Kia Corp (000270.KS) from federal tax credits because they don’t make electric vehicles yet. in North America.

The State Department said it had proposed that the United States offer a federal electric vehicle tax credit to companies with planned U.S. investments.

In May, Hyundai Motor Group announced that it would invest more than $10 billion in the United States by 2025 to strengthen collaboration with American companies in cutting-edge technologies, such as robotics, autonomous driving and artificial intelligence, among other fields.

The US Treasury Department and the Internal Revenue Service began seeking public comment on the new law last month.

South Korea reiterated its position that the new law could violate trade standards such as the U.S.-South Korea free trade agreement and World Trade Organization agreements.

Hyundai Motor Group inaugurated a $5.54 billion EV and battery factory in the United States late last month, aiming to begin commercial production in the first half of 2025 with an annual capacity of 300,000 units.

Reporting by Heekyong Yang; Editing by Kenneth Maxwell

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