The sport-utility vehicle (SUV) Hyundai Genesis GV70 electric vehicle in the first half of the year is expected to be eligible for subsidies in the American market
under the US Inflation Reduction Act (IRA).The model is highly likely to be classified as an SUV rather than a sedan due to a change in regulations of the US Treasury Department.
The department on Friday changed the classification standards for the vehicle category of sedans and crossover utility vehicles (CUV) and that of SUVs and trucks.
The US Environmental Protection Agency for the GV70 will apply its fuel economy regulation instead of its Corporate Average Fuel Economy standards, which defines as an SUV or truck a vehicle with three seat rows, four-wheel drive and a combined weight of 6,000 pounds (2,700 kg) or more.
To qualify for a subsidy under the IRA, an electric-powered sedan or CUV must have a sale price of under $55,000 and that of an electric SUV or truck must be less than $80,000.
Five electric-powered models – the five-seat model Tesla Model Y, Cadillac Lyriq, Volkswagen ID.4, and Ford Mustang Mach-E and Escape Plug-in Hybrid were classified as SUVs eligible for subsidies. Tesla raised the price of its Model Y by $1,000 after its subsidy status was confirmed.
Hyundai Motor's first GV70 electric cars produced in the US are also likely to receive subsidies despite the model being initially classified as a CUV ineligible for the benefit. The model's estimated sale price of $65,000 exceeds the subsidy ceiling of $55,000 but the classification change makes it highly likely that the GV70 falls under the SUV category.
If the maximum subsidy of $7,500 per unit is received, the GV70 EV's purchase price will rival that of the Tesla Model Y.
Like in Korea, GV70 EVs manufactured in the US will have batteries made by SK On. An industry source said, "Batteries meeting the requirements for minerals and components under the IRA will be delivered, so no difficulty in getting subsidies is expected."
Write to Hyung-Kyu Kim at
khk@hankyung.com
