Kia America is slowly assembling the EV9 at its West Point, Georgia, plant until it can add American-sourced batteries in the spring.
Chief Operating Officer Steve Center told Automotive News’ “Daily Drive” podcast that Kia will wait to ramp up production of the three-row electric crossover in the U.S. because the rules for qualifying for the $7,500 federal tax credit for electric vehicles, particularly regarding battery assembly, are too complex.
The Center covered a range of topics in the Sept. 5 podcast, including consumer demand for electric vehicles, federal incentives and unknowns surrounding the U.S. presidential election.
Despite the growing number of electric vehicle models on the market, only 13 qualify for credit through the Inflation Reduction Act.
Kia’s relocation of EV9 production to its Georgia plant has positioned the crossover as the first Hyundai Motor Group EV to qualify for the full credit under new, stricter guidelines that went into effect this year.
The group is racing to finish construction of a massive $7.6 billion electric vehicle and battery complex called Metaplant in Bryan County, Georgia, which will build electric vehicles for the Hyundai, Genesis and Kia brands.
The Hyundai Ioniq 5 will be the first vehicle to roll out of the factory when it goes into service next month. But the battery pack, part of a joint venture with LG Energy Solution, will lag behind by about a year, so the initial vehicles will be eligible for only a partial credit of $3,750.
A joint venture with SK On in Bartow County, Georgia, scheduled to open in the second half of 2025, will supply batteries to other U.S. plants, including Kia Georgia in West Point and Hyundai’s Montgomery, Alabama, plant that builds the Electrified GV70. The Center did not specify where the U.S.-sourced batteries that will power EV9s next spring will be built.
Until now, Kia has relied on a provision in the law that allows automakers to pass the incentive on to buyers if they choose to lease an EV, regardless of its assembly location. That has benefited the EV9, as well as Kia’s compact EV6 and Niro subcompact crossovers.
In the first eight months of the year, EV9 sales reached 13,874. Kia’s overall EV sales increased 27 percent in August, compared to the month a year ago.
Center said the stimulus money — both state and federal — available to consumers is a “great leveling playing field in terms of car prices.”
The industry is facing uncertainty over its electric vehicle strategy ahead of November’s presidential election.
“What will impact consumer demand is when you have a very strong policy reversal,” he said. “If the administration were to change, and the $7,500 tax credits were eliminated, that would impact a lot of middle-class buyers and below,” he said.
High-income earners wouldn’t be impacted by a policy reversal, Center said, because there’s a threshold for a buyer’s income to be eligible. Those who aren’t eligible: married couples filing jointly and bringing home $300,000 a year; heads of households earning more than $225,000; and everyone else earning more than $150,000.
The Center said that therein lies the “fallacy.”
“The reality is that on the purchase side, most people who buy electric vehicles will not get that credit unless they lease the car, which [case] you understand anyway,” he said.
But the leasing provision is a “very weak” regulation “because it’s an IRS interpretation, and they can probably reinterpret things.”