The Treasury Department on Friday released its proposals for the terms of a $7,500 grant for the purchase of a new electric vehicle that opens the door to those whose batteries and components come from Japan and, potentially, eventually, Europe. These subsidies, provided for in the framework of the great climate plan (IRA) of President Biden, voted last summer, should make it possible to support the sales of electric vehicles, a part of the subsidy related to the assembly of the vehicle itself, the source of the critical materials needed to make the battery.
The plan, won with great fight in particular after tough negotiations with the Democratic senator for West Virginia (east) Joe Manchin, who was initially opposed and whose voice was decisive, also aims to support the auto industry and the energy transition in the United States. by providing that a preponderant portion of the vehicle and battery must come from North America.
The new provisions currently affect 21 countries
According to the attribution conditions published on Friday, which are now open to consultation and comments before final validation, States bound by a free trade agreement are also taken into account, “a term that includes recently negotiated agreements on of material criticism, the Treasury said in a statement.
It is, therefore, the agreement announced on Monday with Japan on the subject and, potentially, the one that is currently being discussed with the European Union, whose negotiations officially began during the visit of the President of the European Commission, Ursula von der Leyen, to Washington on March 10. The Treasury Department specifies that currently 21 countries, including Japan, are affected by these new provisions.
Chinese companies excluded
Rather, the conditions of attribution clearly specify that they are intended to exclude, as was intended when the law was voted, “suspicious entities”, a term that includes Chinese companies in particular. “Given China’s dominant position in the clean energy value chain, we need to work with our allies and partners to build a strong supply chain that can meet the expectations of the American consumer,” a Treasury official stressed during a telephone conversation.
The idea is in line with the position defended by the European Commission, which has called for this approach to be extended beyond the G7 countries and towards countries that produce critical materials, which currently export mainly to China. But Senator Manchin had already expressed his concerns, before its publication, estimated Thursday, in a column published in the Wall Street Journal, that the administration “is trying to implement the law it wanted, not the one Congress passed.” Consultations on the conditions for granting aid are open until April 17.
Source: BFM TV
