Honda EVs May Qualify for Tax Credit As GM Makes Them in U.S.

Honda has its first EVs coming in the form of the Honda Prologue and the return of the Acura ZDX. But they’ll be Honda/Acura products more in name and design only because of Honda and General Motor’s EV partnership. The EVs will be produced in GM’s facilities with the General’s Ultium batteries and Ultium drive systems. And as Automotive News points out, this may result in pricing playing out in Honda’s favor.

When the Prologue and ZDX come to market for the 2024 model year they’ll have a big advantage over competitors from Hyundai/Kia, Toyota, etc: they may qualify for the $7,500 tax credit. So, GM is doing all the heavy lifting in this relationship, and Honda could very well benefit from it. While Honda hasn’t yet said where the Prologue and ZDX will be manufactured, Automotive News bets they’ll be made in GM’s Spring Hill, Tennessee plant. Spring Hill currently builds only one EV: the Cadillac Lyriq. The Cadillac XT5, XT6, and GMC Acadia are also manufactured there, but GM has said production of those crossovers will move elsewhere so Spring Hill can manufacture more EVs.

Even if the EVs aren’t made at Spring Hill there’s another option. Earlier this month, Honda announced that it was investing $700 million to retool three of its plants in Ohio for EV production and another $3.5 billion to manufacture a battery facility. The Prologue and ZDX might be made there as well.

The Inflation Reduction Act threw automakers for a loop. The bill’s inclusion of a provision requiring EVs sold in the U.S. to have their final assembly in North America sent automakers scrambling. Many of them got screwed, like Hyundai, whose hot-selling Ioniq and Kia EV6 EVs were immediately disqualified from using the credit. And from our last count, just 15 EVs from nine automakers will qualify. Even though Honda’s success is now all on the back of GM, Honda should count itself lucky the company’s EVs might have a leg up over the competition.