Car makers seek US concessions on battery subsidy

Admin l Wednesday, January 11, 2023

 

BERLIN – Representatives for Germany’s car industry are pushing for further concessions from Washington in the spat over a US subsidy package that the EU fears will disadvantage car markers in the bloc.

A clause in Washington’s recent $700 billion landmark bill called the Inflation Reduction Act (IRA) ensures tax credits for US consumers who purchase electric vehicles with batteries manufactured domestically and in certain countries with free trade agreements with the US.

The European Union, home to many large automakers, fears that this will cause its own manufacturers to lose out.

Following first concessions by Washington at the end of last year, the European Commission should still continue to push for improvements, the president of the German Association of the Automotive Industry (VDA), Hildegard Müller, told dpa.

The regulatory approach chosen by the US was contrary to open trade of goods, Müller said.

The European Commission announced at the end of December that the US had issued new guidelines according to which “EU companies can benefit from the Commercial Clean Vehicle Credit scheme” under the IRA act.

Certain tax credits for commercial vehicles could also benefit European companies, for example when leasing electric cars to American citizens, it said.

While welcoming these changes, the VDA said they could only be viewed as a first necessary step in the eyes of the car industry.

Only part of the vehicles by European manufacturers arriving on the US market were covered by the new guidelines, Müller said.

She added that leasing a car was not particularly popular among US customers either.