US and EU Launch TF to Discuss Inflation Reduction Act EV Subsidies

U.S. President Joe Biden is taking off his coat while delivering a speech at the Inflation Reduction Act (IRA) legislative commemoration event held on September 13 (local time) at the South Lawn of the White House in Washington, DC. [Image source=EPA Yonhap News]

The United States and the European Union (EU) have officially launched a task force (TF) to discuss the issue of discrimination in electric vehicle subsidies related to the U.S. Inflation Reduction Act (IRA).

According to the White House website on the 25th (local time), Adrienne Watson, spokesperson for the U.S. National Security Council (NSC), explained the results of discussions between Mike Phair, Deputy National Security Advisor at the White House, and EU officials in a statement, announcing this development.

The purpose of the TF also includes enhancing understanding of opportunities and concerns of EU companies, as well as shared goals for addressing climate change.

According to the IRA, which passed the U.S. Congress in August, only electric vehicles finally assembled in North America this year are eligible for tax credits, and in the future, additional conditions must be met, such as using a certain percentage or more of battery components and critical minerals produced in the U.S. or other specified countries.

If these conditions are not met, electric vehicle subsidies of up to $7,500 (approximately 10.78 million KRW) per vehicle cannot be received. This has caused backlash from South Korea, the EU, and others excluded from the subsidy beneficiaries.

South Korea and the U.S. have continued consultations related to the IRA, including a phone meeting on the 20th between Anduk Geun, Director General for Trade Negotiations, and Katherine Tai, U.S. Trade Representative (USTR).

Janet Yellen, U.S. Treasury Secretary, told reporters the day before that "We have heard many concerns from Korea and Europe regarding the electric vehicle subsidies, and we will certainly take them into consideration," but added, "The law is written that way. We have to implement the law as it is written."