America’s proposed revamp of electric vehicle tax credits is drawing scrutiny once again and this time the criticism is coming from the European Union.
According to Reuters, European Commission spokesperson Miriam Garcia Ferrer said they were “deeply concerned” about the Inflation Reduction Act that was recently passed by the Senate.
While the act spans 730 pages, the European Union is concerned over language that favors North American sourcing, production, and assembly of electric vehicles and their batteries. The percentage requirements get stricter over time and this would effectively force European automakers to invest on the other side of the Atlantic, in order to qualify for the tax credits.
Also Read: New $7,500 EV Tax Credit Passes Senate, Requires Carmakers To End Reliance On Chinese Batteries
That’s an incredibly brief overview of the clean vehicles section of the Inflation Reduction Act, but Garcia Ferrer isn’t a fan. As she said, “We think it’s … discriminating against foreign producers in relation to U.S. producers” and “this would mean that it would be incompatible with the WTO (World Trade Organization).”
While Garcia Ferrer agreed that tax credits are important to spur electric vehicle adoption, she said “we need to ensure that the measures introduced are fair and … non-discriminatory.” She added, “We continue to urge the United States to remove these discriminatory elements from the bill and ensure that it is fully compliant with the WTO.”
It remains unclear if U.S. officials are listening, but Democrats have been pushing for EV tax credits to be tied to production in America. Earlier proposals favored union-built vehicles and this provoked strong responses from automakers who would be left out in the cold.
The European Union isn’t the only one that has come out against the Inflation Reduction Act as the Alliance for Automotive Innovation has noted that 70% of eco-friendly vehicles, on sale today in the United States, would “immediately become ineligible when the bill passes and none would qualify for the full credit when additional sourcing requirements go into effect.”
