Kandi Technologies Group Inc (Nasdaq:KNDI) stock closed 1 percent higher on Monday after the company’s K22 and EX3 models became eligible for a U.S. electric vehicle tax credit in 2020.
“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.
This tax credit will provide a big discount to buyers since the vehicles already sell for relatively low list prices. According to kandiev.com, 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 5 hours. The Kandi EX3 boasts a range of 188 miles and takes 7.5 hours to charge.
Kandi is based in Jinhua, China. The automaker is interested in the U.S. market. Last June, Kandi purchased Sportsman Country, a vehicle distributor based in Dallas. 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 is up 103 percent year-to-date.