On Thursday, the guidance by the United States was given a guarded welcome by the European Commission. This means that EU companies could partially take benefit from the U.S. Inflation reduction Act, with further improvements still on its way.
The $430 Billion green subsidy law grants tax credits for buying U.S.-produced EVs and other green products. It has triggered fears that it could make the U.S. a world leader in the EV market at European countries’ expense.
The commission coordinating trade policy for the 27-nation EU had said that the U.S. guidance showed EU producers could benefit from tax credits for sales to commercial operators. But their vehicles would not be eligible for such credits when sold to private consumers.
The scheme will start from 1st of January.
The Qualified Commercial Clean Vehicle Credit will be made available to the EU companies without requiring changes to established or foreseen business models of EU producers.
The guidance says a commercial clean vehicle is made by a qualified manufacturer. However, for the New Clean Vehicle Credit for consumers, the vehicle’s final assembly must be in North America.
The Commission said a joint task force has been set up to discuss the topic and would continue to seek solutions to EU concerns, by treating the EU in the same way as all U.S free trade agreement partners.
“We welcome the U.S. announcement today that more time will be taken to work on the outstanding guidelines, allowing it to address these issues satisfactorily,” it was said by the Commission.