U.S. President Donald Trump announced the abolition of the “electric vehicle mandate” during his inaugural address on Jan. 20 (local time).
“With my actions today, we will end the Green New Deal and we will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American autoworkers. We will build automobiles in America again at a rate that nobody could have dreamt possible just a few years ago,” Trump said.
This announcement comes amid significant developments in the electric vehicle (EV) industry, particularly concerning Hyundai Motor Co.’s recent decisions.
According to industry sources on Jan. 21, Hyundai plans to replace the batteries in the Ioniq 5, Ioniq 9, and Genesis GV70 Electrified models sold in the U.S. as early as March. These models originally had batteries that did not meet the parts and minerals requirements stipulated by the U.S. Inflation Reduction Act (IRA). The U.S. Department of Energy, which had initially listed these models as eligible for subsidies on Jan. 1, excluded them from the list after additional investigations conducted over approximately two weeks.
The U.S. government provides subsidies only for electric vehicles produced in the U.S. that meet the parts and minerals requirements. Batteries with parts originating from countries like China and Russia are excluded from eligibility. This policy is part of the IRA, a significant piece of legislation passed in 2022 aimed at addressing various economic issues, including climate change and energy security. One of its key provisions is the promotion of electric vehicles through subsidies, but only for those that meet specific requirements regarding the sourcing of parts and minerals.
Hyundai Motor will replace the batteries in three of its electric vehicle models that are ineligible for U.S. subsidies under the IRA due to their failure to meet the requirements for parts and minerals. Kia and Genesis will also equip their vehicles with new batteries that exclude regulated minerals. This move is seen as a strategic response to ensure their vehicles remain competitive in the U.S. market, where subsidies can significantly impact consumer purchasing decisions.
