{"id":13205,"date":"2022-08-26T15:12:17","date_gmt":"2022-08-26T15:12:17","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/08\/26\/foreign-automakers-are-big-mad-about-the-new-ev-tax-credit\/"},"modified":"2022-08-26T15:12:20","modified_gmt":"2022-08-26T15:12:20","slug":"foreign-automakers-are-big-mad-about-the-new-ev-tax-credit","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/08\/26\/foreign-automakers-are-big-mad-about-the-new-ev-tax-credit\/","title":{"rendered":"Foreign automakers are big mad about the new EV tax credit"},"content":{"rendered":"<p>Source: <a href=\"https:\/\/www.theverge.com\/2022\/8\/26\/23323115\/ev-tax-credit-foreign-automaker-hyundai-wto-discriminate\">https:\/\/www.theverge.com\/2022\/8\/26\/23323115\/ev-tax-credit-foreign-automaker-hyundai-wto-discriminate<\/a><br \/>\n<code><br \/><\/br><\/code><\/p>\n<div readability=\"114.89722027564\">\n<p id=\"WkIa3d\">The auto industry is still processing the new and confusing electric vehicle credits <a href=\"https:\/\/www.theverge.com\/2022\/8\/12\/23302050\/inflation-reduction-act-house-vote-climate-change-clean-energy\">signed into law by President Joe Biden<\/a> as part of the Inflation Reduction Act of 2022. Foreign automakers, in particular, are scrambling to find some loophole through the new rules that would seem to <a href=\"https:\/\/www.theverge.com\/2022\/8\/8\/23296678\/ev-tax-credit-qualify-battery-supply-chain-china\">disqualify the vast majority of their EV fleets<\/a>, while others are speeding up plans to build new factories in the US. <\/p>\n<p id=\"MEPN7Y\">EVs built outside North America are not eligible for the $7,500 tax credit. The law also includes provisions aimed at preventing use of battery components or critical minerals derived from China, which currently controls around three-fourths of the global battery market. <\/p>\n<div class=\"c-float-right\">\n<aside id=\"uOnClh\"><q>EVs built outside North America are not eligible for the $7,500 tax credit<\/q><\/aside>\n<\/div>\n<p id=\"LMbYAw\">Two South Korean automakers \u2014 Hyundai and its affiliate, Kia \u2014 are threatening legal action over the massive climate and energy bill. The two companies have the second-highest share of the EV market in the US, but they do not currently produce any EVs in the US, Canada, or Mexico. <\/p>\n<p id=\"FnpDzs\"><a href=\"https:\/\/www.ft.com\/content\/e12975a1-3a5a-4b7c-8c00-1e6051e9364d\">According to the <em>Financial Times<\/em><\/a>, Chung Eui-sun, the billionaire scion of Hyundai\u2019s founding family and the chair of the Hyundai Group, flew to Washington, DC, this week on an \u201curgent trade mission\u201d to urge lawmakers to reconsider the law\u2019s strict manufacturing and supply chain requirements. And South Korean Foreign Minister Park Jin leaned on US Secretary of State Antony Blinken in a call this week to make some allowances for foreign-made EVs, <a href=\"https:\/\/www.koreatimes.co.kr\/www\/nation\/2022\/08\/113_334792.html\">according to <em>The Korea Times<\/em><\/a>. <\/p>\n<aside id=\"iZwox3\">\n<\/aside>\n<p id=\"ZGk3ON\">Hyundai is planning on building a massive, $5.5 billion car manufacturing plant near Savannah, Georgia, but likely won\u2019t reach volume production until 2025 \u2014 meaning the automaker would not be eligible for the tax credit until then. <\/p>\n<p id=\"kry6RD\">Meanwhile, the European Union is claiming the law could violate the World Trade Organization\u2019s rules barring discrimination between trading partners. \u201cWe think it\u2019s discriminatory, that it is discriminating against foreign producers in relation to US producers,\u201d said European Commission spokesperson Miriam Garcia Ferrer, <a href=\"https:\/\/www.cnbc.com\/2022\/08\/12\/eu-south-korea-say-us-plan-for-ev-tax-breaks-may-breach-wto-rules.html\">according to CNBC<\/a>. \u201cOf course this would mean that it would be incompatible with the WTO.\u201d<\/p>\n<div class=\"c-float-right\">\n<aside id=\"FlH4Bn\"><q>\u201cWe think it\u2019s discriminatory\u201d<\/q><\/aside>\n<\/div>\n<p id=\"Uj62iu\">Even domestic automakers are struggling to ensure their own EVs won\u2019t lose their tax credit eligibility by using batteries with materials mostly sourced from China. \u201cWe are working overtime to localize our supply chains and ramp up production,\u201d said Chris Smith, chief government affairs officer at Ford, <a href=\"https:\/\/canada.autonews.com\/trade-and-tariffs\/new-us-ev-tax-credits-raise-talk-trade-war\">according to <em>Auto News<\/em><\/a>. <\/p>\n<p id=\"3shLS6\">Other companies are speeding up their own plans to make EVs in the US. Earlier this week, Mercedes-Benz announced it had <a href=\"https:\/\/www.businesswire.com\/news\/home\/20220825005229\/en\/\">kicked off production<\/a> of the 2023 EQS SUV at its factory in Tuscaloosa, Alabama, using batteries supplied by a battery factory in Bibb County. And Volkswagen just started <a href=\"https:\/\/www.theverge.com\/2022\/8\/4\/23291919\/vw-id4-2023-price-ev-electric-crossover-specs\">producing the 2023 ID.4 electric crossover<\/a> at its factory in Chattanooga, Tennessee. <\/p>\n<p id=\"nl9Z81\">So far, the auto industry has invested more than $38 billion through 2026 to bring battery production to the US, according to AlixPartners. Major projects include Panasonic\u2019s $4 billion battery plant in Kansas, which is slated to be one of the largest lithium-ion battery factories in the world, and Hyundai\u2019s battery manufacturing facility in Georgia.<\/p>\n<p id=\"ruzUlg\">Of course, this was Senator Joe Manchin\u2019s intention all along. The West Virginia Democrat, who was a key negotiator on the Inflation Reduction Act, has typically brushed aside concerns from foreign automakers about the law\u2019s limitations. <\/p>\n<p id=\"3G8Ly6\">\u201cTell [automakers] to get aggressive and make sure that we\u2019re extracting in North America, we\u2019re processing in North America, and we put a line on China,\u201d Manchin told reporters earlier this month, <a href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/automakers-press-us-senator-manchin-changes-ev-tax-credit-proposal-2022-08-02\/\">according to <em>Reuters<\/em><\/a>. \u201cI don\u2019t believe that we should be building a transportation mode on the backs of foreign supply chains. I\u2019m not going to do it.\u201d<\/p>\n<p id=\"ovT4u1\">But other Democrats have suggested there may be some wiggle room. Michigan Senator Debbie Stabenow told <em>Reuters <\/em>that \u201cconversations\u201d are ongoing about the new rules. She also noted that the law includes billions of dollars in new loans and grants for auto and battery production in the US. <\/p>\n<\/div>\n<p><code><br \/><\/br><\/code><\/p>\n<p>Source: <a href=\"https:\/\/www.theverge.com\/2022\/8\/26\/23323115\/ev-tax-credit-foreign-automaker-hyundai-wto-discriminate\">https:\/\/www.theverge.com\/2022\/8\/26\/23323115\/ev-tax-credit-foreign-automaker-hyundai-wto-discriminate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: The auto industry is still processing the new and confusing electric vehicle credits signed into law by President Joe Biden as part of the Inflation Reduction Act of 2022. Foreign automakers, in particular, are scrambling to find some loophole through the new rules that would seem to disqualify the vast majority of their EV [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":13206,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[15,8],"tags":[16],"class_list":["post-13205","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy","category-technology","tag-policy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Foreign automakers are big mad about the new EV tax credit - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2022\/08\/26\/foreign-automakers-are-big-mad-about-the-new-ev-tax-credit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Foreign automakers are big mad about the new EV tax credit - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source: The auto industry is still processing the new and confusing electric vehicle credits signed into law by President Joe Biden as part of the Inflation Reduction Act of 2022. 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