Hyundai has been on a roll in the US as the automaker embraces the industry’s transition to electric vehicles. The automaker says EV leases are climbing as buyers take advantage of the tax credit provided by the Inflation Reduction Act (IRA). 

After the new IRA guidelines took effect in April, electric models with assembly or battery minerals sourced outside the US or its free trade partners lost eligibility – including Hyundai and Kia models. 

After a breakout year led by the best-selling non-American EVs in the IONIQ 5 and EV6, the update threatened Hyundai’s strategy. 

Hyundai has been vocal about its opposition to the restrictions after breaking ground on its first dedicated EV plant in the US in October that won’t come online until 2025. 

However, a recent update from the IRS allows foreign-assembly models to bypass the law if the vehicles are leased rather than purchased outright. This is because leases are interpreted as commercial business in the law and, as a result, are eligible for the $7,500 tax credit. 

Most automakers, including Ford, Hyundai, Kia, Mercedes, and Volkswagen, announced they would pass the lease incentives on to customers to drive down the cost of driving an EV and boost sales.