US-EU Task Force Established to Talk About IRA's EV Content Requirements
The U.S. and the EU created a U.S.-EU Task Force "to continue promoting deeper understanding of the [Inflation Reduction Act]’s meaningful progress on lowering costs for families, our shared climate goals, and opportunities and concerns for EU producers."
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Its first meeting will be next week, the White House announced Oct. 25. Top EU officials and Korean officials have spoken with many members of the Cabinet to say they don't like that the electric vehicle tax credits are limited to cars assembled in North America. In the EU's case, none of their battery inputs could be used to contribute toward separate requirements for content in batteries. South Korean inputs could count toward that requirement, but only if Chinese inputs are not part of those batteries (see 2208040045). But starting in 2029, 100% of the batteries will have to be manufactured in North America.
The Treasury Department is in charge of promulgating regulations for these tax credits, but Secretary Janet Yellen recently told reporters that the law is pretty explicit. “I’ve heard a lot about the concerns of the Koreans and Europeans about those rules, and we’ll certainly take them into account,” but “the legislation is what it is,” Bloomberg reported. “We have to implement the law that was written.”
However, the Federal Highway Administration is proposing a several-year phase-in of Buy America rules for electric vehicle chargers, because it says it is not in the public interest to wait for there to be enough domestic manufacturing capacity of fast-chargers that use only U.S. metals, and that meet component domestic content requirements, demonstrating some flexibility to push out some requirements. Starting in 2024, EV chargers would have to have U.S.-made components that make up more than 55% of the total component value. Starting in 2023, they'll have to be assembled in the U.S.