Kandi's Electric K22 and EX3 Approved for $7,500 Federal EV Tax Credit in 2020
Chinese electric automaker Kandi Technologies Group Inc. (Nasdaq: KNDI) announced that the company's fully-electric K22 and EX3 models will be eligible for the U.S. federal EV tax credit of up to $7,500 beginning next year.
Kandi builds its electric vehicles in a joint venture with China's Geely, the parent company of Swedish automaker Volvo. The company is one of few Chinese automakers, including NIO (NYSE: NIO), that list its shares on the U.S. stock market. The automaker is looking to expand into the U.S. with its affordable line of compact EVs.
In 2019, the U.S. National Highway Traffic Safety Administration (NHTSA) approved Kandi to import its Model EX3 and Model K22 cars into the U.S.
"We are very pleased that Kandi EV Models K22 and EX3 are qualifying for this U.S. federal tax credit again in 2020. According to the IRS website, as of now, K22 and EX3 are the only two EV models that are qualified for both the 2019 and 2020 federal tax credit," said Kandi's chairman and chief executive officer, Xiaoming Hu.
"We are currently in the process of preparing a detailed plan in advance of Kandi's debut of EV models in the American market," Hu added.
Those who buy new Kandi K22 or EX3 models in 2020 will be eligible for a federal tax credit ranging up to $7,500. People buying the models this year will also be eligible; Kandi secured a tax credit for vehicles bought in 2019 last October.
The tax credit was considered significant as the company's vehicles already sell for relatively low list prices. According to Kandi's website, the list price of Kandi's K22 two-seater is $18,995, while Kandi's EX3, a sport utility vehicle, sells for $29,995.
The federal tax credit, therefore, amounts to a 40 percent discount on the K22 and a 25 percent discount on the EX3.
The Kandi K22 has a 75-mile range and charges in five hours. The Kandi EX3 has a range of 188 miles and takes 7.5 hours to charge.
Based in Jinhua, China, Kandi has long expressed an interest in the U.S. market, purchasing Sportsman Country, a vehicle distributor based in Dallas last June. Kandi formed a partnership with Sportsman in August to sell its K22 and EX3 models in the U.S.
Kandi stock surged 40 percent in February after the U.S. Department of Transportation gave the green light to begin importing the K22 and EX3 into the United States.
The federal government offers tax credits in order to encourage the adoption of electric vehicles. This tax credit begins phasing out once the automaker has sold 200,000 qualifying vehicles in the United States. Tesla and General Motors have already hit that milestone.
U.S. President Donald Trump proposed ending the electric vehicle tax credit in his 2020 budget plan submitted to Congress on Monday. The White House claims this move could save the federal government up to $2.5 billion over the next decade.
Kandi stock, which inched up about 1 percent on Monday to $7.36 per share, is up 103 percent year-to-date.
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