Manufacturing equipment is seen during a tour of Foxconn’s electric vehicle production facility in Lordstown, Ohio, US November 30, 2022. (Reuters)
US Government Extends tax credits
The US government has announced an extension of tax credits for electric vehicles containing Chinese graphite until the end of 2026. This decision comes in response to demands from EV manufacturers.
Temporary Exemption for Graphite
The Treasury Department posted the final rules on the clean energy vehicle provisions of the Inflation Reduction Act, which includes a temporary exemption for graphite from rules on the use of minerals from foreign entities of concern, such as China, Russia, North Korea, and Iran.
Benefits for EV Buyers
The IRA provides up to US$7,500 in tax credits to buyers of EVs that meet sourcing requirements and are assembled in North America. Automakers without tax benefits may face challenges competing against credit beneficiaries.
Reshaping EV Supply Chains
Observers believe that the strict FEOC rules aim to reshape EV supply chains away from China amid growing Sino-US rivalry. These rules are expected to impact the South Korean EV industry, which heavily relies on China’s supply chains.
Positive Response from South Korea
South Korea’s Industry Minister, Ahn Duk-geun, welcomed the decision, stating that efforts to address South Korean companies’ concerns, including the graphite issue, have yielded positive results.
Challenges Ahead
South Korea has expressed concerns about finding alternative supply chains for graphite within the specified timeframe under the new IRA. The government has been actively engaging with the US to maximize benefits for South Korean companies since the enactment of the IRA in August 2022.
Read More of this Story at www.koreaherald.com – 2024-05-04 01:24:34
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