U.S. Senate Passes OBBBA, Raising Concerns for Korean Automakers

The U.S. Senate's recent passage of the "One Big Beautiful Bill Act (OBBBA)" has sent shockwaves through the automotive industry, particularly affecting Korean automakers like Hyundai Motor Group. With a significant investment in local electric vehicle production, the potential abolition of electric vehicle subsidies poses a serious threat to demand and profitability.

Impact on Electric Vehicle Subsidies

If enacted, OBBBA will prematurely end the electric vehicle subsidy tax credit, a move that could drastically reduce consumer demand. Originally set to last until 2032, the subsidy's timeline has been controversially shortened, with the Senate pushing for an earlier termination than even the House had proposed.

Hyundai and Kia's Strategic Response

Facing these challenges, Hyundai and Kia are exploring various strategies to mitigate the impact. From adjusting production lines to include hybrid vehicles to diversifying their export markets, the automakers are seeking ways to navigate the uncertain future of electric vehicle subsidies in the U.S.

The Broader Implications for the Auto Industry

The potential abolition of subsidies, combined with high tariffs on imported cars, underscores the volatile landscape of the U.S. auto industry. As companies like Hyundai and Kia adapt to these changes, the industry at large watches closely, anticipating the broader implications for electric vehicle adoption and competition.