Former U.S. President Donald Trump hinted on the 19th that if re-elected, he may eliminate the federal electric vehicle (EV) tax credit, which currently offers up to $7,500 for EV buyers. If Trump follows this plan, it could significantly impact Hyundai Motor Group and South Korea’s battery industry.
In an interview with Reuters after a campaign rally in Pennsylvania, Trump called the EV tax credits under the Inflation Reduction Act (IRA) “ridiculous.” He indicated that if he returned to the White House, he would either eliminate them or push Congress for a full repeal.
However, Trump also mentioned that he is a fan of EVs, though he expressed interest in gasoline and hybrid vehicles, saying that he has not yet made a final decision.
Under the Biden administration’s IRA, EV buyers in the U.S. can qualify for a tax credit of up to $7,500 if they meet certain conditions. If Trump abolishes this credit, it could potentially slow down EV sales. This would be an unsettling development for Hyundai Motor Group, which holds the second-largest market share in the U.S. EV market after Tesla.
The potential repeal could also negatively affect South Korean battery manufacturers that supply EV batteries. If the tax credit is removed, reduced demand could hurt the profitability of major companies like LG Energy Solution, Samsung SDI, and SK On.
Trump also stated that he would repeal the Biden administration’s carbon emission standards and introduce new tariffs on cars made in Mexico, aiming to boost U.S. manufacturing. If these policies were to take effect, they could lead to a significant shakeup in the U.S. auto market and pose additional challenges for South Korean automakers and battery manufacturers.
If Trump is re-elected, Hyundai Motor Group and South Korea’s battery industry may need to develop new strategies to address the uncertainty in the EV market.
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