NUSA DUA, Indonesia — Electric vehicles (EVs) shuttled G20 delegations and security forces across the southern tip of Bali this week in a symbolic show of Indonesia’s ambitious energy transition plans.
But virtually none of the cars on display, led by Hyundai’s retro-boxy Ioniq 5, would qualify for a new U.S. $7,500 tax credit for North American-built EVs — a sore spot for some leaders and ministers at the just-concluded G20 leaders summit.
Some U.S. allies, notably from Europe and South Korea, used the gathering to make their displeasure known to President Joe Biden and his Treasury Secretary, Janet Yellen, over the restriction of the tax credit for EV purchases to those assembled in North America only.
The move angered foreign governments and foreign-owned carmakers who say the change will disqualify a majority of their EV fleets from North American markets. Previously all electric vehicles were eligible for the credit.
Biden’s Inflation Reduction Act (IRA), which grants the tax credits, also aims to cement U.S. firms such as Tesla and General Motors as industry leaders and prevent the use of China-derived battery components and critical minerals.
French Finance Minister Bruno Le Maire has said the revamped tax credits in the IRA are a “major shock” to the European industry and brought the issue up at a meeting with Yellen on the G20 summit sidelines.
Le Maire told reporters he hoped some solution to the problem could be defined, at least for European manufacturers, in time for French President Emmanuel Macron’s planned U.S. state visit to the White House in early December.
“I think that we can fully understand the determination of the American government to defend their economic interest and promote greener technologies,” Le Maire said.
“But it should not have negative side effects on their European allies and the European economy.”
European industry is already suffering from high energy prices caused by Russia’s war in Ukraine and from weakening demand, and a U.S. EV subsidy that excludes European products will heap further pain on Europe’s automakers, he said.
“We don’t want, at the end of the war in Ukraine, to have Europe being weakened,” Le Maire added.
South Korean President Yoon Suk-yeol also spoke to Biden about the issue during a bilateral meeting at the G20 summit, according to Yoon’s office.
Yoon asked Biden to prevent discriminatory measures against South Korean companies, his office said, adding that Biden had…
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