IRA from the United States: an exception for Korean EVs in the event of commercial use

IRA from the United States: an exception for Korean EVs in the event of commercial use

WASHINGTON/SEOUL, Dec. 30 (Yonhap) — Buyers of new electric vehicles (EVs) made in South Korea will be eligible for a tax credit from the U.S. government in the case of commercial use such as leasing, it announced Thursday (local time). the Treasury Department.

The move will therefore ease growing concerns over the United States’ Inflation Reduction Act (IRA) which has become a source of tension with its allies, including South Korea, Japan and the European Union.

The IRA, signed into law by President Joe Biden last August, provides a tax credit of up to $7,500 for each purchaser of a new electric car provided it was assembled in North America.

However, many experts, including Americans, believe that the new law goes against the principle of national treatment of the World Trade Organization and violates the many free trade agreements signed by the United States, including the one with South Korea.

The Treasury Department explained that new EVs purchased for commercial use will be affected by the tax credits if they are produced by “qualified manufacturers” and not resold.