The head of a large U.S. business lobby for Southeast Asia believes that U.S. electric vehicle tax credits should be extended to Vietnam following VinFast’s move to construct a $4 billion EV plant in the United States.
Currently, tax credits only benefit EVs manufactured in the U.S. or in countries that have free trade agreements with the U.S. Vietnam is not one of these countries but the head of U.S.-ASEAN Business Council and former U.S. ambassador to Vietnam, Ted Osius, believes that companies like VinFast may have a hard time competing without tax breaks.
Speaking with Reuters, Osius explained that VinFast responded to President Joe Biden’s call for EVs to be manufactured in the U.S. and wants something in return.
Read: VinFast Breaks Ground On U.S. Factory, Set To Begin Production In 2025
“Now they will have some asks,” he said. “They will want to be part of the EV supply chain and they won’t want to be discriminated against in favor of other EV producers.”
As part of the Inflation Reduction Act, EVs are eligible for a $7,500 tax credit at purchase if a certain percentage of the critical minerals in the batteries come from the U.S. or a free trade partner. Osius noted that VinFast’s decision to move forward with the construction of its U.S. factory indicates it is confident that a deal can be struck.
“[It shows] a certain amount of confidence that this is going to be worked out – and I share that confidence,” he said.
The United States signed a trade deal with Japan on electric vehicle battery minerals in March that provides Japanese car manufacturers with wider access to the $7,500 EV tax credit. The European Union and the UK are seeking similar concessions and VinFast hopes that Vietnam can also be granted one, too.
