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Hyundai Motor chief returns from US trip over US EV tax credit

Sept. 5, 2022 - 15:41 By Kim Da-sol


Hyundai Motor Group Executive Chair Chung Euisun (right) delivers a speech during US President Joe Biden's state visit to Seoul at Grand Hyatt Seoul on May 22. (Yonhap)

Hyundai Motor Group Executive Chair Chung Euisun returned from a two week US trip where he sought for measures to deal with the latest US tax credit bill that has scrapped subsidies for foreign-made electric vehicles. But market insiders say there isn't room for businesses to resolve the issue and it is a matter that depends heavily on the government’s strategic approach.

According to industry experts quoted in local media on Monday, Chung visited New York, Los Angeles, Boston and Georgia to not only discuss measures over the axed subsidies for eco-friendly cars made in South Korea with local experts, including executives, but also inspect its US facilities and new business opportunities.

In a rare closely-packed schedule for Chung, the chairman met with officials close to the IRA matter in New York. Hyundai Motor Group reportedly excluded a plan to visit Washing D.C. considering that South Korean government’s representatives are visiting D.C.

In the second leg of the trip, Chung flew to L.A. to inspect local sales. The Korean carmaker’s US sales headquarters is located in Irvine, southeast to L.A.

Chung has also visited Georgia, where Hyundai’s $5.5 billion EV manufacturing plant will be built, targeting for mass production of some 300,000 cars annually from the first half of 2025.

Later, he stopped by Boston, and industry sources said Chung may have discussed the latest robotics trends with Boston Dynamics Founder and Chairperson Marc Raibert. Hyundai Motor Group acquired the US mobile robot company for $1.1 billion in June last year. Most recently, Boston Dynamics clinched a $10 million deal with US’ top 3 logistics firm NFI Industries to offer truck-unloading system robot Stretch.

Following the Biden Administration’s $430 billion Inflation Reduction Act signed last month that would allow up to $7,500 of tax credits for “Made in US” EVs only, Hyundai is even considering moving up construction schedule of its first EV factory in the US to the end of this year from 2023.

Experts said Hyundai could mull lowering vehicle prices or offering promotional benefits equivalent to subsidies given to US-made EVs.

Despite such efforts, market experts say the only clear way to resolve the issue depends on the South Korean government’s strategic approach to deal with US government.

“To be honest, there is nothing much that companies can do with the current situation. For now, the firms are eyeing what US authorities or the related associations will do when the South Korean representatives visit them to convey Korean carmakers’ concerns,” said an industry insider who declined to be named due to the sensitivity of the issue.

The Federation of Korean Industries survey on corporate awareness on global supply chain risks released in July showed that just 6 percent of the firms said they are ready with concrete measures to overcome the supply risks. Forty-four percent said they are currently discussing the measure, while 35.3 percent said they would seek measures in the future. Slightly less than 15 percent said they do not have a plan to seek measures.

“To minimize the uncertainties and risks on companies’ global supply chain, the government should play a role to adjust issues between governments and come up with measures and policies to support local firms,” said professor Kim Pil-soo of automotive engineering from Daelim University.

Meanwhile, the government said Monday that the Trade Minister Ahn Duk-geun has departed for the US to meet with US government officials and Congress, including the Trade Representative Katherine Tai. Ahn’s visit comes just days after Seoul sent a delegation to Washington.

Ahn will convey local carmakers’ concerns that they may lose ground in the US market as they make EVs at domestic plants for export, the government said.