The Biden administration has been working for more than 18 months on a “Health and climate” plan. And last Sunday, the US Senate adopted this plan, which includes, for the automotive part that interests us here, aid for the purchase of electric vehicles. In this case a tax credit, which can go up to 7,500 dollars (7,300.40 € during the day), a sum even larger than the maximum bonus of 6,000 € from which one can benefit in France.
But it is conditioned on the fact that said vehicle leaves an American factory, and that its battery is manufactured on American soil. This automatically deprives European electric models of this subsidy.
“The EU is extremely concerned about this bill affecting transatlantic trade. We believe it discriminates against foreign builders versus US builders“, underlined a spokesperson for the European Commission, Miriam Garcia Ferrer.
Yes. So what ? Would be tempted to reply those who admire the ability of the country of Uncle Sam to practice uninhibited protectionism, in order to protect, even promote their industry.
Doesn’t each 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 introduced are fair“said the spokeswoman during a regular press briefing.”We therefore continue to urge the United States to remove these discriminatory elements from the bill and ensure that it is fully WTO compliant.“, she pointed out.
American manufacturers not satisfied either
This bill must in any case now be approved by the House of Representatives, equivalent to our National Assembly. But it is not only in Europe that this measure makes people groan. Even within the USA, the Alliance for Automotive Innovation (a group of national and foreign manufacturers, which represents almost all of the cars sold) finds the measure “too restrictive”.
According to its CEO, John Bozzella, some 70% of electric vehicle models currently sold in the United States would not be eligible for the tax credit. Quite simply because just like us, American manufacturers are also dependent on foreign countries to supply them with batteries.
He urged Washington to expand the criteria for the origin of battery components to “to include producing countries that have collective defense agreements with the United States, such as NATO members, Japan and others“.
As often, no one is happy. Case to follow.