Summary
- U.S. production of the Kia EV9 is being cut back
- 2025 models assembled in the U.S. qualify for a $3,750 federal EV tax credit
- The 2025 Kia EV9 costs $56,225
- The EV9 is labeled as ineligible to benefit from the full IRA benefits due to battery issues and price
- SK On is working on building a new battery cell plant in Georgia to meet tax-credit sourcing rules
Article
U.S. production of the Kia EV9 electric SUV is being reduced, with 2025 models assembled in the U.S. qualifying for a $3,750 federal EV tax credit. This credit is only half of the maximum amount due to the fact that the batteries for the EV9 are still being manufactured by supplier SK On in China, which is considered a foreign entity of concern by the U.S. government. Under rules enacted as part of the Inflation Reduction Act, vehicles with battery materials sourced from countries labeled as foreign entities of concern are disqualified from the full credit amount.
The 2025 Kia EV9 is priced at $56,225, with the base model starting at that price. The IRA rules also include an $80,000 price cap for electric SUVs, but many versions of the EV9 fall below that threshold. While Kia began producing EV9s at its West Point, Georgia plant in June, most U.S.-market vehicles are still sourced from South Korea. The report also mentioned that EV9s are being built at Hyundai’s Metaplant in Georgia, but in limited quantities, with just 21 produced in the third quarter and one sold in the U.S.
SK On has been working with Hyundai and Kia to meet the tax credit sourcing rules, with plans to construct a new battery cell plant in Georgia near the Hyundai and Kia plants. The new plant is projected to have an annual capacity of 35 gwh, enough for 500,000 EVs. Hyundai is also planning a joint venture battery plant in Georgia with LG Energy Solution. Despite the brisk sales of the EV9, Kia’s focus seems to be on meeting the demand rather than specifically manufacturing vehicles in the U.S. to meet the tax credit requirements.
The Kia EV9 debuted as a 2024 model and has seen strong sales, with nearly 18,000 units sold through October. However, due to the sourcing of batteries and other factors, the EV9 may not qualify for the full tax credit amount for the foreseeable future. Additionally, there are concerns that the tax credit could be eliminated under the new Trump administration, which has expressed a desire to remove it. The focus for Kia appears to be on meeting consumer demand for the EV9 rather than prioritizing U.S. production to achieve the full tax credit.
In summary, U.S. production of the Kia EV9 electric SUV is being scaled back, with 2025 models assembled in the U.S. qualifying for a $3,750 federal EV tax credit. The battery sourcing from China is impacting the eligibility for the full tax credit amount, and Kia is working to address these issues by partnering with suppliers for local battery production. The EV9 has been a popular choice among consumers, but the focus seems to be on meeting demand rather than prioritizing U.S. manufacturing for tax credit benefits. The future of the tax credit under the new administration also remains uncertain, which could further impact the incentives for electric vehicle purchases.
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