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Kia Leans Into Inflation Reduction Act Changes for Federal Tax Credit

Written By, Jordan R

Wow, that announcement about the changes coming to the battery-electric vehicle (BEV) credit due to the recent Inflation Reduction Act provision are something else. Prior to this, just about any BEV out on the market could offer the buyer of a new model up to a $7500 federal tax credit. Supporting American business and the economy more, that federal tax credit eligibility is changing, and automakers may need to rethink how they can incentivize new consumers entering the market for an electrified model. Kia America is looking at using the $7500 federal tax credit as an upfront discount instead, and in the most affordable way possible – the deal is eligible for consumers who opt to lease versus buy.

Okay, so here’s the issue that the Inflation Reduction Act has raised. Unless the battery components of a BEV were mostly assembled or made in North America, and the materials for it were also extracted by U.S. entities, processed in the U.S. (or in a country where the U.S. has a free-trade agreement), or from materials that were recycled in North America, then said BEV will no longer be eligible for the $7500 federal tax credit. That is a huge blow for many automakers in the auto industry, and we’re sure to see a bit of an uproar, but Kia America will be taking advantage of a provision in the law that states until 2032, the $7,500 may be used as a discount off an EV's price rather than as a tax credit, and in doing so, the made-in-America barriers no longer apply.

"…every brand is going to see how they can use those provisions to best position their electric vehicles and build their business going forward…Leasing will be a key component of how Kia develops and sells its EVs until it can qualify for partial or full tax credit," according to Eric Watson, the automaker's sales chief

Although there are pros and cons that we can argue against or in favor of buying a new car or leasing a new car, for automakers and consumers to benefit, leasing is a better option when it comes to a new BEV. Kia America already expects an increase of leasing making up a larger share of its sales, from 15-percent to 30- or 40-percent. With popular vehicle models like the Niro EV, Kia EV6, and the upcoming EV9, there are plenty of BEVs that eligible for the discount. The Georgia HMG Metaplant may increase Kia America North American production, but the West Point factory will be the new home of the Kia Telluride, Sorento and Sportage SUVs, and the K5 midsize sedan. New BEVs, like the EV6 and Niro EV, are currently shipped from South Korea.

If leasing isn’t in your car buying future, there are plenty of reasons to purchase a new BEV, one of them being ownership. At NowCar, we also strive to get our consumers the best price for their new vehicle from the very beginning. For buying a new car online the fast and easy way, you can buy a car online with You can get started with a credit application at

Photo Source/Copyright: Kia Media