Shulou(Shulou.com)11/24 Report--

After the United States signed the inflation reduction Act, it was reported in South Korea that the United States would stop paying subsidies for electric vehicles (EV) that were not assembled in North America from August 16 local time. The US government has published a list of electric vehicles eligible for subsidies.

By the end of this year, 21 models assembled in North America alone will receive subsidies of up to $7500 (about 50850 yuan). The list does not include the five models sold by Hyundai Motor Group in the United States-- the IONIQ5, KonaEV, GenesisGV60, EV6 and NiroEV.

The inflation reduction Act only subsidizes electric vehicles assembled in North America, and perhaps more than a certain proportion of battery materials or parts come from countries that have signed free trade agreements (FTA) with the United States. Although the US government chose to subsidize electric vehicles based on North American final assembly conditions this time, it added that it would publish a new list in January. By 2023, it will also require a certain proportion of components and raw materials for electric vehicle batteries to be manufactured in North America. The policy puts South Korean car and battery makers on red alert.

A total of 21 models are eligible for subsidies, according to the U.S. Department of Energy. Overseas car companies, some North American production of Mercedes-Benz, Audi, BMW, Gyibug, Volvo and other EV and PHEV models will be subsidized. Among Asian companies, only one Nissan EV is on the list. Although Tesla and GM have met North American manufacturing standards, the subsidy for each brand is limited to 200000 vehicles, so their cars will receive subsidies from 2023.

All five models sold by Hyundai Motor Group in the United States are made in South Korea and exported to the United States. Currently, the group does not have any electric vehicle assembly lines in the United States. The EV plant decided to build in Georgia is expected to be completed by 2025. Although the group plans to transform existing US production lines into EV such as the GV70EV and EV9, major models such as the IONIQ5 are likely to be excluded from the US government's subsidy list for a long time.

Hyundai Motor Group ranked second in the US electric vehicle sales rankings in the first half of this year, with a market share of about 9 per cent, second only to Tesla's 70 per cent. Although Tesla is unstoppable, major Hyundai models such as the IONIQ5 and EV6 are still well received, beating competitors such as Ford and Volkswagen. As of July, the group had exported about 40000 electric vehicles to the US.

In addition, the US government has lifted the subsidy limit for each brand, with a threshold of 200000 vehicles. So far, Tesla and GM have sold more than 200000 vehicles, so buyers will not be able to get subsidies for these models in the second half of this year. However, from next year, Tesla and General Electric vehicles will not be subject to the upper limit of 200,000 vehicles, and all vehicles sold will be subsidized. Us automakers such as Tesla and General Motors are likely to further consolidate their position in the US electric vehicle market.

South Korea's big three battery makers-LG Energy Solution, SKOn and Samsung SDI---are also likely to suffer setbacks under the new subsidy rules. This is because the regulations on battery production areas and raw material procurement will come into effect. Under the inflation reduction Act, to receive half of the $7500 subsidy from next year, carmakers will have to use batteries made from core materials supplied by the US or countries that have signed free trade agreements (FTA) with the US. In addition, the other half can be subsidized only if the proportion of the main components of the battery made in North America is at least 50%.

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