With Kia just beginning to expand its U.S.-made electric vehicle (EV) lineup, the automaker may have a good idea of what the loss of electric vehicle tax incentives could mean for the industry and the economy.
The new Trump administration's transition team is reportedly planning to eliminate the $7,500 federal tax credit for purchasing or leasing an electric vehicle. Under the Biden administration's Inflation Reduction Act (IRA), an electric vehicle manufactured in North America is eligible for the incentive.
According to Steve Center, COO of Kia America, ending the loan would have a negative impact on U.S. jobs and the entire automotive industry.
“It would just be stupid,” Center told InsideEVs on the sidelines of the Los Angeles Auto Show. “[The government has] has taken the industry in a certain direction and I think you have to allow the industry to recover its investment and then take it public.”
Kia and parent company Hyundai have made major investments to bring production of electric vehicles such as the EV6, EV9 and new Ioniq 9 to the state of Georgia, in part to meet the requirements of the incentive.
Many analysts believe that eliminating tax incentives would mean a slump in electric vehicle sales. Some predict this would result in an immediate 27% drop in demand for electric vehicles.
“They are pulling the rug out from under the entire industry. And to be honest, it’s not just Kia and the import brands,” says Center. “Many other companies have spent a lot of money trying to comply.”
Similarly, the Zero Emission Transportation Association (ZETA), a trade group with members including Tesla, Waymo, Rivian and Uber, has advocated for existing federal tax incentives for both the production and sales of electric vehicles.
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