Why the Biden plan is hindering Europe’s electric car

Why the Biden plan is hindering Europe’s electric car

At least until the end of 2022, the French state will continue to pay an “ecological bonus of 6,000 euros” to anyone who purchases a 100% electric vehicle sold for less than 47,000 euros (up to 60,000 euros, the bonus drops to 60,000 euros). 2,000 euros). Few know, but this very French mechanism has its counterpart in the United States, where since 2011 the federal government has reimbursed part of the difference in cost when buying a thermal, electric or hybrid car.

If this $7,500 tax credit has been talked about so much over the past few days, it is because its revised version is one of the flagship measures of the Inflation Reduction Act, signed into law by President Biden on August 11 and taking effect in August is 16. Since this date a double condition of geographic origin Introduced: The $7,500 tax credit is available only to buyers of EVs assembled in North America (United States or Canada). Same requirement for the location of the battery and the origin of the rare metals it contains.

Only vehicles assembled in the United States and Canada are eligible for Biden’s $7,500 tax credit

This new dual condition is extremely irritating for the European Union, which says it is “concerned about this obstacle to transatlantic trade” which could go against the free trade principle set out by the WTO. But the Japanese, Korean and European manufacturers are even more worried than Brussels unequal treatment what is looming. Not only do not all have assembly plants on American soil, but those who assemble in the United States or Canada continue to import certain models from abroad. Either because demand doesn’t justify shifting manufacturing to North America, or because factories are already operating at full capacity.

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It becomes particularly complicated when you know that certain specimens are the same vehicle model either assembled on American soil or well beyond its borders. This is very often the case with the electric variants of a German, Japanese or Korean vehicle, the production of which is considered delicate and entrusted to the factory that houses the most qualified workers.

Reference: www.challenges.fr

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