Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Tesla and General Motors (GM)—frontrunners in the electric vehicle (EV) market—are unlikely to benefit from a $7,500 federal tax credit, according to Motor & Equipment Manufacturers Association (MEMA).


The US Congress excluded legislation from a spending bill that would have tripled the current limit of 200,000 EVs per manufacturer that can qualify for the tax credit. Had the legislation passed, automakers surpassing the ceiling would have qualified for a $7,000 tax credit on the remaining 400,000 EVs.


However, the legislation is still expected to pass by the middle of this year, likely benefiting competitors like Ford, which will release its battery-powered Mustang Mach-E SUV sometime in the second half of 2020. The legislation would help Ford sell its EVs at a $7,500 discount over comparable GM and Tesla vehicles. Still, Tesla and GM could reduce the prices of their EVs in response, although such a move would be easier for Tesla to digest because their EVs are in higher demand, according to the MEMA report.


In the meantime, Hyundai is looking to expand its EV range and plans to invest more than KRW100tn ($86.3bn) over the next five years to develop and sell 44 new types of EVs around the world. Euisin Chung, executive vice chairman of Hyundai Motor Group, said the company would invest KRW 20tn in new technology to transform into a smart vehicle solutions provider during this period.


US$1 = 1,157.48 KRW (as on Jan 2, 2020)

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