The United States wants to grant a tax credit on electric cars, provided they have an American battery in the chassis. This penalizes European manufacturers.
About to pass the House of Representatives, the IRA, the Inflation Reduction Act, is President Joe Biden’s grand plan on climate and health. One of its measures aims to boost the sales of electric vehicles in the land of Uncle Sam. Customers of such a model will benefit from a tax credit of up to $7,500.
But this aid is reacting on the other side of the Atlantic. First, the boost is reserved for vehicles built in American factories. And that’s not all: the battery must also be made in USA, with materials found on American soil! For the Americans, the idea is to promote local production to be less dependent on China.
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These conditions therefore do not please the European Union, which considers that these rules are not compatible with those of the WTO, the World Trade Organization. An EU spokeswoman said: “Tax credits are an important incentive to encourage demand for electric cars (…) but we need to ensure that the measures introduced are fair”.
Manufacturers are also not in favor of these conditions. According to the CEO of the Alliance for Automotive Innovation, a group that brings together almost all of the manufacturers present in the United States, around 70% of electric cars currently sold in the country of Uncle Sam would not be eligible for the credit. of tax.
For the Alliance, the criteria for the origin of battery components should be broadened, and “include production countries that have collective defense agreements with the United States, such as NATO members, Japan and others”.