With Kia just getting started with the expansion of its U.S. made electric-vehicle (EV) lineup, the automaker may have a good perspective on what losing tax incentives on EVs could mean for the industry and the economy.
The transition team of the incoming Trump administration is reportedly planning to end the federal $7,500 tax credit on the purchase or lease of an EV. Under the Biden administration’s Inflation Reduction Act (IRA), an EV made in North America is eligible for the incentive.
According to Kia America COO Steve Center, the move to end the credit would have a negative impact on U.S. jobs and the whole auto industry.
“It would just be dumb,” Center told InsideEVs on the sideline of the Los Angeles Auto Show. “[The government has] steered the industry in a direction, and I think you need to allow the industry to recover its investments and then let it float.”
Kia, and parent-company Hyundai, have made large investments to bring the manufacturing of EVs, such as the EV6, the EV9, and the new Ioniq 9, to the state of Georgia, partly to comply with the incentive’s requirements.
Many analysts predict that ending the tax incentives would be a hit to EV sales, with some expecting this would lead to an immediate drop of 27% in demand for EVs.
“You’re pulling the rug out from under the whole industry. And quite frankly, it isn’t just Kia and the import brands,” Center says. “A lot of other companies have spent a lot of money trying to comply with the regulations.”
Similarly, the Zero Emission Transportation Association (ZETA), a trade group with members including the likes of Tesla, Waymo, Rivian, and Uber, has come out in support of existing federal tax incentives for both the production and sale of EVs.