South Korea and Automakers Urge US Government to Tap Commercial EV Tax Credit

The government of South Korea and several automobile companies are urging the US government to tap a commercial electric vehicle tax credit to boost consumer access to electric vehicles, a plan that can help ease concerns over a climate bill approval in the country.

The 430 billion dollars US Inflation Reduction Act (IRA) passed in August 2022 ended 7,500 dollars consumer tax credits for electric vehicles assembled outside North America, sparking anger from Japan, European Union, South Korea, and others.

According to some automobile companies, a less noticed IRA provision for commercial clean vehicles can be used to boost electric vehicle producers and address foreign concerns. Companies, including Hyundai Motor, Kia Corp, and Rivian Automotive among other want the US government to let consumer vehicle leasing qualify for the commercial EV tax credit that can decrease monthly lease payments.

The government of South Korea has publicly urged Treasury to include rental cars, vehicles purchased for use in Lyft rideshare or Uber fleets, and rental cars. South Korean government has also leaked Treasury not to impose any budget restrictions on the commercial tax vehicle credits through 2025.

Kia and Hyundai Motors want Treasury to allow people leasing electric vehicles to do so qualify for around 4,000 dollars tax credit for used Electric Vehicles if they purchase vehicles when the leases expire.