CLEPA supports EU efforts to end discriminatory US subsidies for electric vehicles

The EU and United States established a dedicated task force to discuss provisions in the US Inflation Reduction Act (US-IRA) that exclude EU-manufactured green goods from subsidies, including electric vehicles. The next ministerial meeting between the two Atlantic partners will take place on 5 December.

The US-IRA was signed into law in August. The bill introduces up to $7,500 in purchasing incentives for electric vehicles. The incentive will, however, not apply to most cars assembled in the EU or cars with an EU-manufactured battery.

The US-IRA introduces local content requirements for potential vehicle incentives for cars of up to $55,000. For the first $3,750: At least 40% of the battery’s critical minerals must be extracted or processed in the U.S. or in a country with which the U.S. has a free trade agreement. This is set to increase to 80% in 2027. To qualify for the second $3,750: At least 50% of the battery components – measured by value – must come from North America. The percentage increases every year to 100% in 2029.

CLEPA has supported the European Commission with data on the potential impact and will continue to encourage the European Commission in its efforts to avoid discriminatory measures against EU industry.


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