The South Koreans are clearly worried about being cut out of the market.
When President Biden signed the Inflation Reduction Act (IRA), he also ensured that electric vehicle tax credits will be extended through 2032. As we know, not all EVs on the roster will make the cut and South Korea got a bit mad at the US government over the new tax credit regulations, as it pushed Korea out of the market. Here's how, in brief: Around 20 cars will receive the $7,500 credit because the law stipulates the car has to be assembled in North America. Obviously, that means any EV made by South Korea is excluded, including cars like the Hyundai Ioniq 6 and Kia EV6. So, Korea got vocal. Now, the US will look at how the IRA will affect South Korean carmakers.
The nation's national security advisor, Kim Sung-han, spoke to Yonhap, detailing talks with US officials in Hawaii, which included national security advisor Jake Sullivan.
"[Sullivan] said [the US] will take a detailed look at how the EV subsidy issue will pan out going forward, and what impact it will have. He said the IRA is likely to bring more pluses than minuses to Korea, but he would take a closer look at how the electric vehicle subsidy issue will develop going forward and what impact it will have."
Evidently, SK is extremely concerned about being pushed out of a market its companies worked very hard to break into.
Korean brands like the Hyundai Motor Company (which includes Hyundai, Kia, and Genesis) are now seen as legitimate competitors in the autos space when they weren't just a decade ago.
South Korean president Yoon Suk-yeol also took time to meet with Arizona Governor Doug Ducey. The president asked for Ducey's cooperation when addressing Korean concerns regarding Biden's new IRA.
"In particular, President Yoon asked that as our firms have large concerns about the recently enacted Inflation Reduction Act, that the state government also make active efforts to ensure our businesses there can receive the same benefits as US firms without discrimination," read the president's statement.
The release also added that "President Yoon said that our businesses in the battery and other advanced industry sectors are expanding in Arizona and across the United States and increasing investments, and asked for the interest and support of the US federal government and the state government for these firms."
Gov. Ducey has said he is taking great care in providing support to strengthen his state's cooperation with the Asian nation. For now, it's unclear how other foreign automakers, South Korea included, will choose to handle this new policy. For many, that means shifting battery production to the Americas, thus circumventing the loss of the $7,500 cut.