Hyundai and Kia EVs Set to Regain the $7,500 US Tax Credit – Here’s What You Need to Know
- evautos2
- Feb 18
- 3 min read
In a surprising turn of events, Hyundai and Kia electric vehicles (EVs) are expected to once again qualify for the full $7,500 federal tax credit. This development is poised to significantly impact the US EV market in 2025, as Hyundai ramps up production of its latest electric models.
Hyundai’s Plan to Regain Tax Credit Eligibility
Hyundai has been a major player in the EV space, but its vehicles had been left off the Department of Energy’s (DOE) updated list of eligible models in early January. The reason? Strict new battery sourcing rules implemented under the Inflation Reduction Act (IRA). While Hyundai has been able to pass the credit on through leasing, it has been pushing for full eligibility for direct buyers.
Now, the company has a clear plan to requalify. Starting next month, Hyundai will begin mass production of the 2025 IONIQ 5 at its new manufacturing plant in Georgia. This move aligns with new battery production efforts by SK Battery America (SKBA), a division of SK On, which will soon begin producing batteries for Hyundai and Kia EVs in the US.
How Hyundai’s Battery Strategy Plays a Role
Battery sourcing has been a major hurdle for many automakers trying to qualify for the tax credit, but Hyundai’s partnership with SK On is set to change the game. SK will dedicate 9 out of its 12 assembly lines at Hyundai’s new Georgia plant to building batteries specifically for Hyundai and Kia EVs.
With Hyundai’s new EV plant and SK On’s battery facility just five hours apart in Georgia, the automaker will be able to streamline production while meeting the strict IRA battery sourcing requirements. Once fully operational, Hyundai and SK On’s joint battery plant will have an annual capacity of 16.5 GWh—enough to power around 200,000 EVs.
Which Hyundai and Kia EVs Will Qualify?
As of mid-January, only a few Hyundai Motor Group vehicles were on the DOE’s list of eligible models. The 2025 Kia EV9 and EV6 made the cut, while Hyundai’s popular IONIQ 5 and IONIQ 6, along with Genesis models, were left out.
However, with the new battery production plan in place, Hyundai expects that the US-made 2025 IONIQ 5 and IONIQ 9 will qualify for the full $7,500 federal tax credit. This means that for the first time since the IRA passed in 2022, buyers will be able to claim the credit upfront when purchasing, rather than relying on lease-based incentives.
How This Affects Buyers
If you’ve been eyeing a Hyundai or Kia EV, this news could make your purchase even more attractive. Hyundai has already been offering competitive leasing deals to pass on the tax credit, with 2025 IONIQ 5 leases starting as low as $199 per month. Now, with direct purchase incentives likely returning, Hyundai’s EVs could be some of the best deals in the market. Additionally, Hyundai is sweetening the deal with extra perks. Buyers of the 2025 IONIQ 5 can choose between a free ChargePoint Level 2 home charger or a $400 public charging credit, making it even easier to transition to an EV.
Potential Roadblocks: Political Uncertainty
While Hyundai’s strategy seems solid, there’s still some uncertainty surrounding the long-term future of the federal EV tax credit. Former President Donald Trump has stated that if he is re-elected, he may eliminate EV incentives, including the $7,500 tax credit. If this happens, Hyundai and other automakers may need to rethink their US EV strategies once again.
Final Thoughts
For now, Hyundai and Kia are making bold moves to ensure their EVs remain competitive in the US market. With local production ramping up and battery sourcing in compliance with federal guidelines, the IONIQ 5, IONIQ 9, and other Hyundai-Kia EVs are on track to regain full tax credit eligibility.
If you’re considering making the switch to an EV, this could be the perfect time to take advantage of Hyundai and Kia’s incentives. Check with your local dealer to see if these models are available in your area and how you can benefit from the upcoming tax credit changes.
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