The Inflation Reduction Act’s North American manufacturing clause is really hurting EU EV makers.
An envoy from the European Union, Ambassador Stavros Lambrinidis, met officials during an event put on by the U.S. Chamber of Commerce. In a report from Reuters, the EU is hopeful that the U.S. will change its tax credit plug-in vehicle rules.
For those not in the know, when the Inflation Reduction Act went into effect on August 16, it instantly made any EV not made in North America ineligible for the $7,500 tax credit. Meaning, EVs from many manufacturers, like BMW, Hyundai, Kia, and Toyota, became effectively more expensive.
Countries and OEMs alike have called this practice discriminatory, causing actual political entities to step in, to negotiate.
Lambrindis said that cutting the EU out of U.S. tax credits would be harmful to both economies since they’re so intertwined. The result of the meeting seems to be positive, as Lambrindis is “very, very hopeful that this will be supported,” referring to an agreement with the EU, or an amendment that would allow European EVs to access U.S. plug-in tax credits.
No official ruling or legislation has come quite yet, although the EU isn’t the only political entity that has been noisy about its discontent with the Inflation Reduction Act. The South Korean government has been adamant that it’s not okay with how the new rules affect Hyundai and Kia, and it too is in similar talks with the U.S. government.
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