Hyundai IONIQ 5 to gain $7,500 tax credit as first EV at new plant

The top-selling Hyundai EV is about to become even more attractive. Hyundai says the IONIQ 5 will be the first EV built at its new $7.6 billion EV and battery plant in Georgia, unlocking access to the $7,500 federal tax credit.

After selling nearly 34,000 IONIQ 5 models last year (+48% YOY) in the US, Hyundai’s top-selling EV has not slowed down this year.

Hyundai sold 3,361 IONIQ 5 models in March, a new record. Through the first three months of 2024, 6,822 IONIQ 5 models have been handed over to customers (+18% YOY), also a new record.

Although Hyundai’s second EV, the IONIQ 6, launched in the US last January, IONIQ 5 sales are still nearly double that of the electric sedan. Meanwhile, the electric SUV is still imported from Korea.

Hyundai’s global chief operating officer, Jose Munoz, said it’s a “no-brainer” for the IONIQ 5 to be the first EV built at its new EV and battery Metaplant in Georgia.

In an interview with Automotive News, Munoz said the IONIQ 5 “absolutely is the bestseller.” Munoz added, “So I think it is a no-brainer that it needs to be that one,” referring to Hyundai’s first EV to roll out of the Metaplant.

Hyundai IONIQ 5 to gain $7,500 EV tax credit eligibility

The EV production line will be ready in October when Hyundai will begin assembling the IONIQ 5 in the US.

Although the battery unit will open about a year later, Munoz said the expectation is that the IONIQ 5 will gain eligibility for the $7,500 EV tax credit once assembly begins.

While Hyundai waits for the battery portion to come online, it will source IONIQ 5 batteries from a factory in Hungary. “We needed the critical components of the battery, the materials of the battery and also the assembly with the proper sourcing,” Munoz explained.

Hyundai, like several automakers, is passing the $7,500 tax credit on for those leasing through a loophole in the Inflation Reduction Act.

However, that’s about to change this fall. “As of October, we’ll be able to do so as well with retail customers who pay cash or finance. That’s going to be good news,” Munoz said.

The news comes after Kia announced its first three-row EV9 electric SUV rolled off the assembly line at its West Point, GA plant Thursday. Kia’s EV9 made history as the first EV assembled from start to finish in the Peach State.

Electrek’s Take

Hyundai already has some of the most affordable and fuel-efficient EVs. Hyundai’s electric models account for six of the top ten most fuel-efficient EVs in the US this year.

Starting at $41,800, the IONIQ 5 is one of the best deals on the market. With a $7,500 tax credit, the IONIQ 5 could be bought for as low as $34,300. That would be one of the most affordable electric options in the US.

It will be interesting to see how US production impacts Hyundai’s EV sales. In an exclusive interview with Electrek, Hyundai’s North American CEO told us the automaker is “humble and hungry” to separate itself from the competition (read the full interview here).

If you’re ready to see why Hyundai’s IONIQ 5 is already outpacing the competition, we can help you get started. You can use our link to find deals on the Hyundai IONIQ 5 at a dealer near you.