Kia America’s COO Blasts Ending EV Tax Credit as a “Dumb” Move
The Future of Electric Vehicles: How Lax Incentives Could Affect the Industry
As Kia FY2022 gets underway, the company is well-positioned to provide valuable insights on the impact of losing tax incentives on the electric vehicle (EV) market. With the Trump administration reportedly planning to end the federal $7,500 tax credit on EV purchases or leases, the automaker may have a unique perspective on the consequences of this move.
The Economic Consequences of Repealing Tax Incentives
According to Steve Center, COO of Kia America, ending the tax credit would have a negative impact on US jobs and the entire auto industry. "It would be dumb," he says. "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’s Investment in Electric Vehicle Production
Kia and its parent company Hyundai have made significant investments to move EV production to the United States, bringing models like the EV6 and EV9 to Georgia. These investments were partially driven by the desire to comply with the existing tax incentives. With the potential repeal of these incentives, the company’s investments may be put at risk.
The Economic Impact on the Entire Industry
Many experts predict that ending the tax incentives would lead to a significant decline in EV sales, with some analysts expecting a 27% drop in demand. According to Center, "You’re pulling the rug out from under the whole industry. And quite frankly, it isn’t just Kia and the import brands. A lot of other companies have spent a lot of money trying to comply with the regulations."
Industry Support for Tax Incentives
The Zero Emission Transportation Association (ZETA), a trade group consisting of companies like Tesla, Waymo, Rivian, and Uber, has come out in support of the existing federal tax incentives for both the production and sale of EVs.
The question remains: what does the future hold for the electric vehicle industry if these tax incentives are repealed? Stay tuned to find out.
