The U.S. Treasury Department has released new guidelines on the Inflation Reduction Act(IRA) stipulating that electric vehicles(EVs) leased by consumers can qualify for commercial clean vehicle tax credits even if the cars were assembled outside North America.

According to the guidelines released on Thursday, new electric vehicles purchased for commercial use such as leasing are eligible for the tax credit as long as they are produced by a "qualified manufacturer" and are not purchased for resale purposes.

The move offers an avenue for South Korean-made EVs to effectively bypass the final assembly requirement of the IRA and qualify for the tax credit, amounting to a win for South Korea after seeking approval to use the commercial EV tax credit.

However, EVs may not qualify for the tax credit if they are leased for a period equivalent to 80 to 90 percent of the vehicle’s life or the contract includes an option to purchase the vehicle at a discount at the end of the lease.