South Korean auto industry requests rethink on EV tax credits

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SEOUL: A major association for South Korea’s car industry has sent a letter to the US House of Representatives and requested changes in tax incentives proposed under a major climate change and energy bill, stressing that they could put South Korean carmakers on an unequal footing.

The Korea Automobile Manufacturers Association (KAMA) said that it delivered the concerns regarding the tax breaks in the Inflation Reduction Act, pending the House’s approval, in the letter sent to US House Speaker Nancy Pelosi.

The US$430bil (RM1.9 trillion) bill, approved by the Senate on Sunday (US time), calls for expanding tax subsidies for electric vehicle (EV) buyers, but only for EVs assembled in North America.

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The bill also has provisions intended to bar EVs from receiving the benefits if they are equipped with batteries or battery components made using minerals produced in China.

“South Korea is deeply concerned that the recent US Senate’s EV tax incentive bill includes provisions for providing tax incentives discriminating between North American made and imported EVs and batteries,” the letter released by KAMA read.

“KAMA respectfully requests to include imports of EVs using batteries and battery components manufactured or assembled in South Korea in the scope of EVs eligible for the US tax credits under the bill,” it said. Major automakers have voiced concerns over the act. — The Korea Herald/ANN