Foreign electric vehicles to benefit from subsidies from Biden’s climate plan

These conditions for the allocation of the $7,500 subsidy for the purchase of a new electric vehicle were particularly awaited in Japan and Europe, which might only welcome the proposals published by the Treasury Department.

Initially planned at the beginning of the year and the subject of deep concern both on the part of the European Union (EU) and of the Asian allies of the United States – Japan and South Korea in the lead – these proposals were seen as a sign that the he Biden administration has taken into account the fears expressed by its partners.

However, within the framework of the law passed last summer, these subsidies had been designed both as a means of accelerating the conversion of Americans to electric vehicles and of supporting the development in the country of an industry in this area, by particular concerning the manufacture of batteries.

The plan, won with great struggle, in particular following tough negotiations with the Democratic senator from West Virginia (east) Joe Manchin, who initially opposed it and whose vote was decisive, in fact provided that a part majority of the vehicle and the battery had to come from North America.

However, the conditions published by the Treasury Department, which will come into force in April, largely open up the source of both vehicles and the critical materials necessary for the batteries or the batteries themselves.

Put out for consultation before final validation, they also concern the States bound by a free trade agreement, “a term which includes recently negotiated agreements relating to critical materials”, specified the Treasury in a press release.

In total, 21 countries are concerned, including Japan, which signed an agreement on Monday specifically concerning “supply chains for critical minerals and batteries for electric vehicles”.

If not yet on the list, the EU hopes to quickly sign a similar deal, with negotiations officially kicking off during European Commission President Ursula von der Leyen’s visit to Washington on March 10.

“Respect the law”

Currently in the American capital, the European Commissioner Margrethe Vestager reminded the press on Thursday that it was “difficult to fight once morest global warming if we did not have zero carbon industry everywhere” and not only in the United States.

“What we are trying to avoid is that the acceleration that we want to give in Europe is not potentially stopped by that which the United States wants to experience,” insisted Ms. Vestager.

Questioned by AFP, the European Commission estimated on Friday that “the conditions confirmed the pragmatic approach chosen” and said that it was now concentrating on “quickly finalizing an agreement on critical minerals in order to [s’]ensure that the EU was treated in the same way as other close partners” of the United States.

But Senator Manchin made no secret of his anger at the published terms. He said in a statement on Friday that they “completely ignore the IRA’s objective”, which was “to bring industries back to the United States and [leurs] ensuring we have safe and strong supply chains”.

“American public money should not be used to support industrial jobs overseas. The consultation period is open and I invite every American to speak. My advice is simple: stop it, obey the law “added the Democratic senator.

If they seem to be more open than anticipated, the allocation conditions clearly specify that they exclude, on the other hand, as provided for when the law was voted, “suspicious entities”, a term which includes in particular Chinese companies.

“Given China’s dominant position in the clean energy value chain, we need to work with our allies and partners to build a strong supply chain that can meet the expectations of the American consumer,” underlined a Treasury official, during a telephone exchange.

The idea is in line with the position defended by the European Commission, which has called for this approach to be broadened beyond the G7 countries and towards countries producing critical materials, which currently export mainly to China. Among these materials are nickel or cobalt, which are used in the manufacture of batteries.

Consultations on the conditions for awarding grants are open until April 17.