U.S. President and EU leader to discuss proposal on electric vehicle tax credits
by Associated Press
Biden and von der Leyen are expected to agree to open negotiations between the U.S. and the EU on a deal that could boost the use of European minerals critical in the production of electric vehicle batteries.
President Joe Biden and European Commission President Ursula von der Leyen are set to unveil on Friday a plan that the White House hopes will help turn the page on the ongoing spat between the U.S. and European Union over electric vehicle tax credits.
Biden and von der Leyen are expected to agree to open negotiations between the U.S. and the EU on a deal that could boost the use of European minerals critical in the production of electric vehicle batteries that are eligible for U.S. tax credits through Biden’s roughly $375 billion clean energy law that passed last year, according to administration officials. The officials spoke on the condition of anonymity ahead of the leaders’ meeting.
Biden and von der Leyen are also expected to use their Oval Office meeting to discuss Western coordination to support Ukraine in the war against Russia, joint efforts to decrease Europe’s dependence on Russian fossil fuels and the Biden administration’s growing concerns that China is considering providing weaponry to Russia for use in the war.
The Treasury Department said in a statement that an agreement “with like minded partners” could help provide a measure of “security and stability by ensuring the United States and allies and partners are not reliant on China for critical minerals.” White House officials are hopeful that an agreement with the EU can be reached in a matter of weeks.
Von der Leyen and other European leaders have voiced opposition to incentives in the Inflation Reduction Act that Biden signed in August that favor American-made electric vehicles. The legislation stipulates that for U.S. consumers to be eligible for a tax credit of up to $7,500 on their EV purchase, the EV’s battery must largely contain minerals from the U.S. or a country with which the U.S. has a free-trade agreement. Additionally, 50% of components in batteries must be manufactured or assembled in North America by 2024, with that percentage rising gradually to 100% by 2028.
“Getting on the same page on the effort to diversify supply chains on electric vehicle batteries is an important step for U.S.-EU relations, and any steps that avoid a subsidy war are meaningful,” said James Batchik, assistant director of the Europe Center at the Atlantic Council. “That said, a resolution will depend on the details of any future agreement.”
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