Update: On October 25th, 2022, Kia officially confirmed that it will begin manufacturing EVs at a new factory in Savannah, Georgia beginning in the first half of 2025. The new facility will be dedicated to EV and battery production.
The recently signed Inflation Reduction Act drastically changed the requirements for electric vehicles to be eligible for the $7,500 federal tax credit. In order to be eligible for the available federal tax credit, automakers must assemble vehicles in the U.S., which is why only a small portion of EVs are currently eligible for the federal tax credit after the changes went into effect in August. To meet the new requirements for electric vehicles, Kia is reportedly planning to move production of some of its electric cars to the U.S.
According to the South Korean newspaper and television channel SBS, Kia is expected to move production of its electric vehicles to the U.S. starting in 2024. The report is light on other news or information on how Kia will be making the move. Additionally, the news site doesn’t have any information on what vehicles the automaker plans to build in the U.S.
Based on Kia’s current lineup of electrified vehicles, it makes sense for the South Korean automaker to move production of the EV6 to North America. The electric vehicle has proved to be incredibly popular and competes in the hotly contested electric SUV segment. With Kia and Hyundai combining to be the second-most popular EV brand in the U.S., losing out on the federal EV tax credit could see the brand fall behind competitors that build electric cars that are eligible for the credit.
Building an electric car in North America is just one requirement of the Inflation Reduction Act. By 2024, the Act requires EVs to have at least 50% of their batteries come from Canada, Mexico, or the U.S. That figure will rise to 100% by 2028. In order to meet the battery requirement, EVs must have a battery built in North America and have minerals that are mined or recycled on the continent. This requirement could be the hardest thing for automakers to meet, as the majority of brands source battery components from China.
Because of the Inflation Reduction Act and the requirement for EVs to be built in North America, we expect to hear more news about automakers looking to shift production of EVs to the continent. EVs that are currently built in North America include the Ford Mustang Mach-E, GMC Hummer Pickup and SUV, Nissan Leaf, Lucid Air, Rivian R1S, Rivian R1T, as well as all of Tesla’s EVs.