Hyundai Motor Group Chairman Euisun Chung delivers remarks along with U.S. President Joe Biden on the automaker's decision to build a new electric vehicle and battery manufacturing facility in Savannah, Georgia, May 22. Reuters-Yonhap

A major Korean business lobby has urged the United States to allow exceptions for Korean-made electric vehicles to its new law excluding EVs made outside of North America from tax benefits, saying it will be a setback for Korean automakers investing big in the region.

The Federation of Korean Industries (FKI) made the call in a letter sent Thursday (Seoul time) to U.S. President Joe Biden and five key federal departments, as Seoul is seeking to create room for Washington to reconsider the tax credit provisions in the Inflation Reduction Act (IRA) in favor of the Korean auto industry.

"Automobile manufacturers are set to lose out on EV tax credits for those EVs assembled outside of North America," FKI Chairman Huh Chang-soo said in the letter, also sent to U.S. Congress and governors of the states of Georgia, Alabama and Michigan.

"This would be a setback to all your efforts to engage our two regions, solidify and strengthen economic partnerships," he said. "It is my hope that automobile manufacturers, such as Hyundai and Kia, will receive a reprieve on treatment that runs counter to the principles of the U.S.-Korea FTA and World Trade Organization's agreement of subsidies."