U.S. Treasury says S. Korean leased EVs qualify for tax credits

The Biden administration decided to include the electric vehicles (EVs) leased by consumers can qualify for the Inflation Reduction Act (IRA) tax credits even if manufactured outside North America. That means South Korean EVs may benefit from the IRA subsidies if sold in a lease.

The U.S. Treasury Department said in its new IRA guidance via FAQ and the white paper on December 29 local time that it will include in its definition of eco-friendly commercial vehicles any vehicle obtained by a taxpayer who intended to use it directly or lease it and that the EVs are eligible for the consumer tax credit of 7,500 U.S. dollars (approx. 9.65 million Korean won). The new guidance indicates that the Biden administration accepted requests from the South Korean government and carmakers such as Hyundai and Kia Motors to include leased, rental and shared-transport vehicles in the usual range of commercial vehicles such as trucks and buses.

“The company will work to minimize the negative impacts of the IRA through cooperation with the government.


weappon@donga.com