ⓒKBS News

A new U.S. law that seeks to reduce inflation and tackle climate change provides tax credits for electric vehicles(EV) made in the U.S. only, dealing a blow to South Korean carmakers which manufacture all of their EVs at home. 

U.S. President Joe Biden on Tuesday signed into law the 740 billion-dollar Inflation Reduction Act.

The legislation is regarded to be the biggest climate change response measure in U.S. history as it seeks to invest 369 billion dollars toward climate and energy policies. 

The new law also allocated 64 billion dollars to reduce health care insurance costs for Americans as part of efforts to lower inflation in the long term.

In particular, the legislation includes a minimum corporate tax rate of 15 percent for companies that earn more than one billion dollars a year. The measure is estimated to bring in more than 300 billion dollars in revenue over the next decade.

The Inflation Reduction Act also aims to provide a tax credit of up to 75-hundred dollars for buyers of new EVs made in the U.S.

The move is expected to deal a blow to the sales of Hyundai and Kia EVs in the U.S. market as the companies produce all of them in South Korea.