Brussels welcomes the temporary maintenance of subsidies for electric cars in the US

For now, the vehicles and their batteries simply need to be “assembled in North America” ​​to benefit from the subsidies.

The European Commission on Thursday welcomed the temporary maintenance of the conditions for granting subsidies to electric cars in the United States, after the US Treasury Department said in a publication that it had delayed the publication of the final conditions.

The Inflation Reduction Act (IRA) stipulates that subsidies for the purchase of an electric vehicle are provided from January 1 and amount to up to $7,500.

But the publication of the final conditions, postponed in March by the ministry, is currently being maintained: for the time being, the vehicles and their batteries simply have to be “assembled in North America” ​​to benefit from the subsidies. This therefore includes those manufactured in Canada and Mexico, a longstanding demand from countries bordering the United States.

Heading for a weakening of the Americans?

“The conditions published today confirm once again that European companies can benefit” from the subsidies provided for in the IRA, the European Commission assessed in a press release, which “welcomes these conditions, the result of a constructive engagement” on both sides. second from the Atlantic Ocean.

On the American side, this decision was criticized by Democratic Senator Joe Manchin, who made money from his support for the IRA and now calls for a pause in the implementation of these subsidies “time to publish conditions that respect the IRA’s goals”.

“The announced rules respond to the will of the companies and do not respect the purpose of the law,” the elected representative said in a press release. “They only weaken our ability to become a more energy independent country.”

In particular, Joe Manchin hopes that the terms of attribution do not exacerbate America’s dependence “on China and Russia for raw materials,” those two countries being among the main producers of the elements needed for vehicle electrification.

A topic that was discussed during Macron’s visit

The current rules may actually benefit vehicles that do not meet the original objectives, which aimed for them to be “made in the USA” to favor the American auto industry, he believes.

But such a possibility has sparked an outcry both in North America – Canada and Mexico argue that these rules run counter to the free trade agreement between the three countries – and in Europe, which fears a weakening of its industry at a time when it is already suffering from rising energy costs due to the war in Ukraine.

The topic was also discussed during French President Emmanuel Macron’s state visit in early December, and the French delegation was optimistic about a possible extension of subsidies for vehicles manufactured in Europe.

In its press release, the Commission also recalls that the IRA remains “a matter of concern in so far as it contains discriminatory measures and effectively excludes European companies” from the planned measures. She says she wants “similar and non-discriminatory” treatment for European manufacturers as that given to their American competitors.