Raphael Warnock asks Janet Yellen to be flexible on new EV tax credit

SAVANNAH, Ga. (AP) – U.S. Sen. Raphael Warnock urged the U.S. Treasury Secretary on Friday to use “maximum flexibility” to implement a revised tax credit for Americans who buy electric vehicles, a benefit that Hyundai could lose when the automaker is investing billions of dollars to open its first US electric vehicle plant in the Democratic senator’s home state of Georgia.

Warnock sent a letter to Treasury Secretary Janet Yellen to worry that the revised tax credit that President Joe Biden signed last month as part of a sweeping climate and health bill could put some car manufacturers at a competitive disadvantage. That’s because the new law says the credit of up to $7,500 only applies if electric vehicles and their batteries are manufactured in North America.

That means vehicles made by South Korea-based Hyundai would no longer qualify for the credit until the company begins producing electric vehicles in Georgia, which isn’t expected until 2025.

“I urge you to provide maximum flexibility for vehicle manufacturers and consumers to take full advantage of the electric vehicle tax credits available under the law,” Warnock’s letter said.

The United States Department of the Treasury is responsible for adopting regulations to carry out revisions to the electric vehicle tax credit approved by Congress. Warnock’s letter does not ask the department for any specific remedies.

In an interview, Warnock said he hopes to see Treasury officials interpret congressional reviews so that “we don’t end up punishing the very companies, like Hyundai, that are helping us bring this clean energy future.”

Hyundai announced plans in May to build a $5.5 billion plant to make electric vehicles and the batteries that power them in Bryan County, west of Savannah. The company plans to hire at least 8,100 workers.

Hyundai spokesman Michael Stewart said in an emailed statement that the company was “disappointed” with the tax credit review.

“We are hopeful that a solution can be found through the U.S. federal government that takes into account Hyundai’s future investments and committed future investments in the U.S. market, including the $5.54 billion electric vehicle plant in Georgia,” Stewart said.

Stewart did not say whether the problem could affect Hyundai’s plans to produce up to 300,000 electric vehicles a year in Georgia. State and local governments agreed to give the automaker tax breaks and other financial incentives worth $1.8 billion.

But the tax credit issue is causing some anxiety among Georgia officials working closely on the project.

“Hyundai is quite concerned about the lack of tax credit,” said Trip Tolleson, president and CEO of the Savannah Area Economic Development Authority, who meets frequently with Hyundai officials to discuss the planned Georgia plant.

“All of us really hope that the Biden administration, in partnership with our two U.S. senators, can fix this and get this resolved,” Tolleson said. “There is a lot of play in this project.”

Warnock, a freshman senator, is seeking re-election this fall against Republican challenger Herschel Walker, a Georgia football hero and close friend of former President Donald Trump, in a swing state where Democrats have no guarantee of keeping the political ground they won in 2020.

Warnock insisted that the health and climate bill that Democrats pushed through Congress was a big win for Americans and “signals that we are serious about the role that electric vehicles will play in the future.”

“As we see this expansion in South Georgia, the prospect of building electric vehicles made by Georgia workers, we need to do everything we can at the federal level to strengthen that work, not to impede it,” Warnock said.

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