SIA request tax abatement as it shifts production to hybrid electric vehicles

LAFAYETTE, Ind. — Subaru of Indiana Automotive will invest about $65 million into its Lafayette plant to develop hybrid electric vehicle production, according to an economic revitalization area tax abatement request filed with Lafayette’s Redevelopment Commission.

The request ask the redevelopment commission to approve a 10-year economic revitalization tax abatement which will give Subaru of Indiana Automotive a tax break as it redevelops and rehabilitation of real estate it owns.

Tax abatements are not a complete pardon of taxes. If the abatement is approved, property taxes on the new development will be phased in over 10 years.

According to the documents, Subaru of Indiana Automotive plans to renovate 30,000 square feet of one of its current buildings and 10,000 square feet of a container yard to support its production of hybrid electric vehicles.

This request follows the news that the Subaru of Indiana — Lafayette Plant will be ending production of its 2025 Subaru Legacy model line of vehicles by the end of next year.

“The Subaru Legacy has been beloved by owners and renowned for its exemplary safety and reliability; over 94% of Subaru Legacy vehicles sold in the last 10 years are still on the road today and the model has been an Insurance Institute of Highway Safety Top Safety Pick for 18 years running,” reads the company’s April announcement.

In that same announcement, it noted that the company would be shifting focus from passenger cars to SUVs, crossovers and fully electric vehicles.

However, Lafayette plant will be focusing on producing the company’s first hybrid variant of the Forester compact crossover, according to Craig Koven, manager of communications for Subaru of Indiana Automotive.

Last year at the Los Angeles Auto Show, Subaru announced it would be producing a new line of Forester that would give customers the opportunity to choose from a traditional internal combustion engine or a hybrid engine option.

In a recent announcement, it was noted that Subaru would partner with Toyota to develop three more electric crossovers by the end of 2026, according to reports from Automotive News.

There have not been any announcements from Subaru if the Subaru of Indiana Automotive will have an involvement with the production of these vehicles.

In the shift to building Subaru’s new line of Forester, Subaru of Indiana Automotive needs to remodel parts of its facilities, which is why Subaru of Indiana Automotive is requesting a tax abatement from the city.

Subaru of Indiana Automotive indicates this investment will create 100 new production jobs paying between $17.25 and $19.50 a hour, while retaining 6,464 of its current position.

If the redevelopment commission approves the tax abatement, the request will be sent to the Lafayette City Council for its approval at the June meeting.

This article originally appeared on Lafayette Journal & Courier: SIA request tax abatement to prepare production on new hybrid Forester