Don't 'Sledgehammer' EV Tax Credits, Says GOP Rep At Hyundai's Metaplant

Right now, the threat of tariffs looms large over the entire global automotive industry. But no carmaker that's invested big into electrification has forgotten that electric vehicle tax credits could go away this year, if President Donald Trump has his way. In theory, losing those deals could dampen EV demand, which isn't great news for major investments like the Hyundai Motor Group's new Metaplant near Savannah, Georgia. 

It's why even Georgia Rep. Buddy Carter, a member of Trump's own party, says the situation is more complicated than simply deleting President Joe Biden's Inflation Reduction Act.

"I was one of the 18 [U.S. House members] originally who signed a letter asking leadership and the Speaker to, instead of taking a sledgehammer, to take a scalpel to this," Carter told InsideEVs at the factory's opening ceremony. "I've always maintained that if parts of the IRA stabilize the supply chain, if they result in domestic manufacturing, that's what we want."

Photo by: Patrick George

Hyundai Georgia Metaplant

Carter was among the many dignitaries on hand Wednesday for the opening of Hyundai's factory, the largest economic development project in Georgia's history. Other guests included Georgia Gov. Brian Kemp and South Korea's ambassador to the U.S.

Earlier this month, Carter was among 21 Republicans who sent a letter to Ways and Means Committee Chairman Jason Smith, R-Mo., voicing support for “sector-wide energy tax credits” that can help make “major investments in domestic energy production and infrastructure for traditional and renewable energy sources alike.” The clean energy tax credits include up to $7,500 for the purchase of domestically-made EVs and plug-in hybrids, as well as a "leasing loophole" that qualifies any leased EV for that tax break regardless of where the car was made. 

Those credits were included in Biden's IRA as part of an omnibus job-creation and clean-energy initiative; on the automotive side, they were designed to get Americans to buy cleaner cars that were made in the U.S., while building up a battery-focused supply chain here in America—an alternative to the Chinese battery supply chain, which dominates global markets. 

Yet while Trump has said he wants to return manufacturing jobs to U.S. shores, losing the EV tax credits could hurt demand for those cars and put at risk the investments into factories that make them. Many of those factories are in purple and red states, including Georgia.  

In that way, Carter, Georgia and Hyundai's Metaplant all represent a kind of conundrum for red states, and for Republican elected officials. Anyone elected to office would want an investment like the one Hyundai is making: a massive, 16 million square-foot factory built from the ground up to make the U.S.-spec Ioniq 5 and Ioniq 9 while generating more than 14,000 manufacturing jobs.

Photo by: Patrick George

Hyundai Georgia Metaplant

In total, the Metaplant project is slated to bring more than 100,000 jobs to the area for related industries and projects. Hyundai and Kia also recently announced the plant will make hybrid cars as well, as the Korean conglomerate needs its largest U.S. investment to yield sales successes.

Yet red states, and red-state elected officials in the Trump era, are among the most skeptical of EVs and EV adoption. Carter himself has said he's excited about EVs but previously railed against Biden's so-called "EV mandate," the derisive term for the tighter emissions and fuel economy rules meant to lead America to a mostly-electric new car market. 

But on Wednesday, Carter said that he wants the Hyundai plant to flourish and also recommends not "throwing the baby out with the bathwater." 

"Let's look and see," Carter said. "Perhaps there are parts of [the IRA] that would behoove us to keep." 

When asked how he thought Trump's White House and the rest of Congress would land on this, Carter said, "I think they understand. I know they understand the importance of securing the supply chain. I know they understand the importance of domestic manufacturing." 

Photo by: Patrick George

Hyundai Metaplant Georgia

That, however, has been thrown into chaos by the threats of 25% tariffs against foreign automotive and parts production, which Trump said this week will go into effect on April 2. Analysts and experts have said that those tariffs will make many cars—including those made by U.S. brands like Ford and Chevrolet in Canada and Mexico—become more expensive by potentially thousands of dollars. 

Hyundai's new investment in Georgia may shield it somewhat from those tariffs. Though they still depend on imported parts like every other new car, the Ioniq 5 and Ioniq 9 are now some of the more promising U.S.-made electric vehicles. And at the Metaplant's opening, other Georgia officials said the plant should allow Hyundai's EVs to sell competitively, with or without any tax credits.

"Let the consumer decide," said Chris Clark, the president and CEO of Georgia's Chamber of Commerce. "We got rid of our EV tax credit in Georgia years ago, and we've seen EV sales skyrocket. We've seen the companies move here. At the end of the day, the consumer is going to make the decision." 

Contact the author: patrick.george@insideevs.com