These subsidies should make it possible to support the sales of electric vehicles, part of the subsidy concerning the assembly of the vehicle itself, the other the origin of the critical materials necessary for the manufacture of the battery.
The Treasury Department on Friday released its proposals for the terms of the $7,500 grant for the purchase of a new electric vehicle that open the door to those whose batteries and components come from Japan and, potentially, eventually, from Europe. These subsidies, provided for in the framework of President Biden’s major climate plan (IRA), voted last summer, should make it possible to support the sales of electric vehicles, a part of the subsidy concerning the assembly of the vehicle itself, the source of the critical materials needed to manufacture the battery.
The plan, won with great struggle in particular after tough negotiations with Democratic Senator from West Virginia (east) Joe Manchin, who initially opposed it and whose voice was decisive, also aims to support the industry. automotive and energy transition in the United States, by providing that a preponderant part of the vehicle and the battery must come from North America.
The new provisions currently affect 21 countries
According to the conditions of attribution published Friday, which are now open to consultation and remarks before a final validation, the States bound by a free trade agreement are also taken into account, “a term which includes the recently negotiated agreements relating to materials criticism,” the Treasury said in a statement.
This therefore concerns the agreement announced on Monday with Japan on the subject and, potentially, the one currently under discussion with the European Union, whose negotiations officially began during the visit of the President of the European Commission, Ursula von der Leyen. in Washington on March 10. The Treasury Department specifies that currently 21 countries, including Japan, are affected by these new provisions.
Chinese companies excluded
Conversely, the conditions of attribution clearly specify that they aim to exclude, as provided for when the law was voted, “suspicious entities”, a term which 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,” underlined a Treasury official, during a telephone exchange.
The idea is in line with the position defended by the European Commission, which has called for this approach to be broadened beyond the G7 countries and towards countries producing critical materials, which currently export mainly to China. But Senator Manchin had already expressed his concerns, before their publication, estimating Thursday, in a column published in the Wall Street Journal, that the administration “is trying to put in place the law it wanted, not the one that Congress passed”. Consultations on the conditions for awarding grants are open until April 17.
