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Here's a fresh article from the Korean car website, Auto Post. It seems that the Korean auto unions are OK with KIA/Hyundai building a US factory for their EV models.

Does it make sense for KIA/Hyundai to build an expensive plant to satisfy the demands of the Inflation Reduction Act for the few years Biden remains in office? What if the next president or a new congress drastically changes the rules as there is a free trade agreement with Korea?


Article translated to English from Korean.

auto post

WHY KIA IS BUILDING FACTORIES IN AMERICA WITHOUT 100% UNION OPPOSITION

September 21, 2022






U.S. FACTORY THAT
UNIONS UNDERSTAND



Hyundai Motor Group is on the verge of being eliminated from the US market due to the ' Inflation Reduction Act ' announced by the Biden government. Hyundai Motor Group's electric vehicles that were not produced in the United States are not receiving subsidies due to the inflation reduction law, which is causing a sharp decline in sales.
Due to the pressure from the US government, Kia Motors hastily took special measures to lead the stabilization of the US market. Let's take a look at Kia's efforts to cope with the US Inflation Reduction Act from 2024.




EV6 TO BE PRODUCED AS EARLY AS 2024

The EV6 currently sold in the US market was produced in a domestic factory and exported to the US. The EV6, which has been produced at Hwaseong Plant 3 so far, is expected to be produced at Hwaseong Plant 2 from the end of this year. However, the problem is that electric vehicles produced in Korea are no longer able to receive subsidies in the US market, so Hyundai Motor Group feels the need for US factories more than anyone else.
Hyundai Motor Group currently operates its Alabama plant in the US and plans to complete the construction of its Georgia plant later. Hyundai Motor Group was scheduled to produce the EV9 at its new Georgia plant, but decided to produce the EV6 immediately after completion in 2024.
Yonhap
U.S. PRODUCTION OF EV6 REQUIRES UNION CONSENT

In order for the Kia EV6 to be produced at the US plant, the consent of the Kia union in Korea is required. However, the Kia union does not oppose EV6 production in the United States. In fact, in the collective agreement between Hyundai Motor and Kia, there is content that requires deliberation and resolution if the model is transferred to an overseas plant or if there is a production plan for the same model that is being produced in Korea.

However, the union of Kia is not opposed to the US production of EV6 in response to the problem of electric vehicle sales within the Hyundai Motor Group due to the inflation reduction law. In addition, there is a consensus that domestic electric vehicles must comply with US laws in order to be competitive in the US market.


HOW TO STOP THE DAMAGE RIGHT NOW

In fact, the reality is that the subsidy problem caused by the Inflation Reduction Act cannot be solved right now. In response, Hyundai Motor Group decided to produce the Santa Fe hybrid model at its Alabama plant.
In fact, 72.4% of the sales of eco-friendly vehicles sold in the US are hybrid vehicles, and the company intends to increase the hybrid production ratio to recover the minimum damage in the US market for two years. However, there has been a major setback in the increasing sales of electric vehicles, and it is unclear what will happen in the future.
 

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Because it’s against free trade and could trigger a trade war
Easy solution then. Remove the NA final assembly requirement. In 2023, Kia and Hyundai will qualify for half the battery credit or full depending on how much is not from China.

In 2024, my guess then it will be GM and Tesla only that will qualify for any tax credit as no battery minerals or processing can be from foreign entities of concern (China, Russia, etc) and only those two are setup to assemble large numbers of cells and batteries in the US from minerals from Canada, Australia, etc. Something like 90% of cathode and anode processing happens in China so the Korean carmakers and battery suppliers need to pivot.
 

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Easy solution then. Remove the NA final assembly requirement. In 2023, Kia and Hyundai will qualify for half the battery credit or full depending on how much is not from China.
I'd be in favor of this. As I've stated before, the fight against climate change is a global issue and we shouldn't worry so much where the EVs are manufactured.

I wouldn't be in favor of your last point which is to delete the EV tax credit. Gas cars and gasoline are far too cheap and so EVs need a tax credit to be competitive. If you delete the EV tax credit, then yank all subsidies for gasoline and see it spike above $6/gal everywhere. I'm sure big oil wouldn't let that happen so the best we can do is have an EV tax credit and slowly titrate down oil & gas subsidies.
 

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Thread Cleaned, please keep any politics off the forum, we only end up getting lots of complaints as everyone has a view and some are shared and others not, thank you for your understanding.
 
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