The Biden administration has been working on a “health and climate plan” for more than 18 months. And last Sunday, the US Senate passed this plan, which includes subsidies for the purchase of electric vehicles for the automotive part that interests us here. In this case, a tax credit that can reach up to $7,500 (€7,300.40 during the day), a sum even greater than the maximum bonus of €6,000 that one can benefit from in France.
However, the prerequisite is that the vehicle leaves an American factory and its battery is manufactured on American soil. This subsidy is therefore automatically omitted for European electric models.
“The EU is extremely concerned about this law, which affects transatlantic trade. We believe it discriminates against foreign builders versus US builders“, underlined a spokeswoman for the European Commission, Miriam Garcia Ferrer.
Yes. So what ? Would be tempted to reply to those who admire the ability of Uncle Sam’s country to practice unbridled protectionism to protect or even boost their industry.
Doesn’t every country have the right to promote its own production? Well no, it’s not that simple. For the European authorities, this tax credit would actually be incompatible with the rules of the WTO (World Trade Organization).
“Tax credits are an important incentive to encourage demand for electric cars (…) but we need to ensure that the measures put in place are fair“said the spokeswoman during a regular press conference.”We therefore continue to call on the United States to remove these discriminatory elements from the bill and ensure that it is fully WTO compliant.‘ she emphasized.
American manufacturers are not satisfied either
In any case, this bill now has to be approved by the House of Representatives, which is equivalent to our National Assembly. But this measure is not only causing a groan in Europe. Even within the US, the Alliance for Automotive Innovation (an association of national and foreign manufacturers that represents almost all cars sold) finds the measure “too restrictive”.
According to its CEO, John Bozzella, around 70% of EV models currently sold in the United States would not qualify for the tax credit. Quite simply because American manufacturers, like us, are dependent on the supply of batteries from abroad.
He called on Washington to expand criteria for the origin of battery components to “Include producer countries that have collective defense agreements with the United States, such as NATO members, Japan and others“.
As is so often the case, no one is happy. case follows.