Europe, against the new aid for electric vehicles implemented in the United States

Most of the developed countries of the world want to strengthen their electric mobility strategy with aid of different considerations and certain tax exemptions. Europe has invested large amounts of money in its 2030 Agenda, and the United States wants to achieve the same effect, although with a partially different point of view. The aid strategy for electric vehicles in the United States has caused discomfort within the European Union considering that such policies go against free trade for violating the rules of the World Trade Organization (WTO).

Last Sunday the United States Senate approved a new bill on climate and energy. With an impressive endowment of 430,000 million dollars, the Government of the stars and stripes promises significant discounts and tax exemptions for those drivers who decide to make the leap to electric mobility. Aid that can amount to up to 7,500 dollars for new electric cars and up to 4,000 dollars for second-hand models. A very ambitious plan that is fraught with certain pitfalls for foreign manufacturers.

Several conditions have been set to be able to access the aid. The first is that the sale price of the vehicle may not exceed $55,000 in the case of a car, and $80,000 if a van or electric pick-up is purchased. So far everything is normal, but there are more conditions, which have raised blisters in Europe. The most sensitive obligation is that in order to access the aid, the vehicle in question must be manufactured in the United States.which is a major setback for many foreign brands.

In Rivian they are immersed in the development of a new platform called R2
The great beneficiaries have been the American brands by being able to access all the aid

The policy goes even further, since from 2023 electric vehicles that have Chinese components will not be eligible for any subsidies.. Any Chinese components, including the battery. It is worth remembering that China is the largest manufacturer of batteries for electric cars in the world, supplying batteries to numerous manufacturers around the world. The rule has been well received by local investors, triggering the shares of American manufacturers such as Tesla, Rivian or Ford. However, in Europe they consider that such regulations do not conform to the law of the free market.

The reaction of the European Union was not long in coming. This past Thursday the leaders of the old continent were “deeply concerned” for the tax exemptions proposed by the United States, calling them discriminatory against foreign products, and may also fail to comply with the rules set by the World Trade Organization. The United States wants to prioritize electric Made in USAmainly punishing the fledgling Chinese brands that were starting to set their sights on the American market.

Numerous European manufacturers have joined the complaints of the European Union since many of the EV models will not be able to access aid proposals by not being manufactured on American soil. Not being able to qualify for exemptions and aid limits their room for maneuver since in many cases they will lose out in the price battle. At the moment no one from the United States has reacted to the words of the European Union, although they do not seem very willing to adjust the established measures. Meanwhile European manufacturers will seek solutions to escape the problem. Solutions such as that of Volkswagen, which has already begun manufacturing the Volkswagen ID.4 on American soil.

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