In May, U.S. President Joe Biden met the chief executive of Hyundai, the South Korean Automobile juggernaut. At that time, Biden thanked him for his investment in the state of Georgia. Hyundai, then, had pledged to invest at least $10 billion in electric vehicles and related technologies in the United States.
Even a $5.5 billion investment for a Georgian facility producing batteries and electric vehicles was part of it. South Korea and the United States relations were reaching an all-time high. However, Uncle Joe is known for creating colossal failures.
Four months later, Hyundai feels as though Biden has stabbed it in the back. This has angered South Korean authorities. Biden’s I.R.A. was actually never meant to reduce inflation, it was always about wiping foreign car makers from the USA.
A Friction with the US, says S. Korea
With the introduction of the Inflation Reduction Act (IRA), U.S. President Joe Biden approved legislation to increase tax breaks for buying electric vehicles. The new legislation, however, only supports electric vehicles assembled in North America.
This meant subsidies are entitled to be provided only to American carmakers. It also includes new loans, tax credits, and grant programs worth tens of billions of dollars, for automakers to produce cleaner vehicles.
US’ abrupt end of subsidies has left South Korea in shambles. Seoul is infuriated that EVs manufactured by Hyundai in South Korea will be excluded from client tax credits contained within the Inflation Reduction Act.
In an interview with the Financial Times, South Korea’s minister of trade, Ahn Duk-geun recalled Joe Biden’s tour to South Korea in May. He lambasted Biden, citing his atrocious u-turn on promises. Duk-geun said: “President Biden himself said ‘thank you very much, chairman Chung, I will not let you down — that was the exact statement, and it was widely broadcast in Korea,”
He furthermore added, “Then when this new law was enacted and signed by President Biden, and [it became clear that] that company i.e Hyundai was being discriminated against, this situation provoked emotional and political repercussions. We don’t want to aggravate the problem by adopting similar retaliatory measures,”
Read More: Japan’s EV industry is now at China’s mercy. Thanks to sanctions on Russia
Did Biden fear Hyundai’s rise?
Now a very important question arises, did Biden fear Hyundai’s rise in America? Well, the data states so.
In fact, Hyundai poses a serious competitive threat to Tesla. This year, by sales volume, Hyundai Motor and its subsidiary, Kia, have surpassed Tesla to claim the second-place rank in the US market for electric vehicles.
After experiencing a severe jump in market share among its competitors last year, the pair’s market share in Europe has reached 12%. The reason behind this is pretty simple: US-manufactured automobiles are less popular when they are compared with other automobiles.
Foreign automobiles are more fuel efficient, lighter, and sometimes safer because of the materials that are used in making them. When it comes to EVs, South Korean cars have always had an upper hand.
Hyundai’s Ioniq 6 electric sedan can travel up to 610km (379 miles) on a single charge, which is almost double of Tesla. Whereas, its Ioniq 5 electric SUV has become the best-selling imported electric car in the US.
What Washington fears is that a repeat of 2010 could occur. In contrast to Apple‘s market share of more than a fifth in 2010, Samsung had a portion of the global market of less than 6%. Two years later, after the release of its more expensive Galaxy smartphone line, Samsung surpassed Apple in terms of global mobile sales.
To date, Apple and Samsung fight in the smartphone market like mad mongrels.
Read More: Europe erupts in rage over Biden’s new EV Policy
Democrats’ most anticipated bill to lower inflation never reduced inflation. However, it has unquestionably soured bonhomie relations between the US and South Korea.
Biden’s intense affection for ‘trash’ American automobiles will ensure that other top-notch EVs never enter the US market. And even if they do, Americans will always favor cheap cars made in the US.
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