Electric vehicle subsidy IRA rules ‘transformed into’battery subsidy’ in Korea

As the sub’electric vehicle subsidy rules’ of the US Inflation Reduction Act (IRA) were announced, the Korean government and media interpreted it as a ‘battery subsidy’.
The U.S. Department of the Treasury announced on the 31st that it would implement a rule from the Internal Revenue Service that requires automakers to certify that their vehicles meet parts and mineral requirements.
In the regulation of automobiles subject to subsidies, the battery parts are 50% (100% from 2029) or more, processing in countries that have signed free trade agreements (FTAs) with the United States, Japan, and Europe on the premise of subsidies when installing batteries from North America. It was announced that it would be paid if it was installed in a car only when more than 40% of a battery mineral was used (80% by 2027).
The New York Times said, “To be eligible for the tax credit, car manufacturers must meet stringent requirements for where they assemble their cars and batteries and where they get the materials that go into them. It is expected to receive this full credit,” he said, citing the case that the Model 3, Tesla's popular sedan made in the United States, no longer receives full credit due to Chinese batteries.
Korean media reported that a government official commented that “Korean companies are able to be included in the subsidy without changing the current process, so it is judged that the regulations have come out in favor of companies”, and Korean battery companies are relieved. reported the atmosphere.
According to the rules of the US Treasury Department, US automakers are expected to strengthen production process supervision and strengthen contract conditions in determining whether Korean manufacturers install batteries in the US.
Regarding the US Treasury Department's announcement today, the NYT evaluated that "one important detail opens the way to expand the program to include Japan's battery minerals and add more countries, such as the 27 member states of the European Union."
“We welcome the trade agreement with Japan,” said Siyu Huang, CEO of Factorial Energy, an advanced battery company backed by Mercedes-Benz, Hyundai and Stellantis. It's going to be very difficult to get battery-grade lithium," he told the NYT.
"A big part of this is where the lithium comes from," he said of the Treasury regulation.
In the Treasury rulemaking, the NYT said, Biden administration officials balance the two goals of encouraging Americans to buy electric vehicles and bringing more factories for car battery battery materials to the United States and its allies.
"The electric vehicle tax credit is shifting the supply chain by tens of billions of dollars," said James M. Wickett of Hogan Lovells, a tax and energy policy body. "The details matter in important ways," said NYT. said to
The Korea Economic Daily said, “The US Treasury Department defined battery components as negative plates, positive plates, separators, electrolytes, battery cells, and modules in the guidelines announced this time. However, the 'constituent material' used to make the negative or positive plate is not included in battery parts and is defined as a mineral,” he said. It is known to be conducted in the United States. If this continues, Korean companies can become targets of IRA subsidies without changing the current process.”
Contrary to Korea’s assessment, the NYT said, “The Biden administration has announced a new rule that significantly shortens the list of electric vehicles eligible for federal tax credits. Officials hope the change will force automakers to shift their supply chains from China to the United States or its allies.”
The NYT said, “This competition is for vehicle manufacturers that do not qualify for U.S. tax credits to procure minerals and components that meet the requirements.” said.
The Biden administration announced on the day that after this measure, it will add rules to set the scope so that companies can receive investment from China and Russia and others and allow tax deductions.
The rules and laws for “foreign organizations of concern” include companies headquartered in China, Russia, North Korea, Iran, etc., and in the detailed regulations on the ban on the use of important minerals and battery components, different from this electric vehicle rule, the ‘Battery Minerals’ regulation said to be presented.

'Chosun Ilbo' <Korean battery that took a breath... US subsidy even if Chinese materials are used>, KBS <Korea’s ‘electric vehicle battery’ receives US subsidies… Announcement of US IRA Guidelines>, MBC <Korean Electric Vehicle Battery 'Receives Subsidies from the US'>, etc.

The Ministry of Trade, Industry and Energy said on the 1st, “With this announcement from the US, the domestic battery and material industry has resolved a significant part of the overall uncertainty, and we welcome it, saying that cooperation in the battery supply chain between Korea and the US will be strengthened.” It was evaluated that the decision in a somewhat favorable direction was the result of the government's consultations with the US and the IRA through various channels.
Industry Minister Lee Chang-yang said on the 1sh, "Recently, President Yoon Seok-yeol met with the U.S. Trade Representative (USTR) representative and asked for consideration so that the difficulties of Korean companies would not be aggravated by the IRA. We have done our best to reflect opinions," he said. "We will actively support our industry to recognize IRA as a new opportunity and actively respond to it."

People's Power spokesman Kim Min-soo said on the day, "According to the regulations announced by the US Treasury, domestic companies can be recognized as IRA subsidy targets without changing the current process. "The national interest-centered diplomacy pursued by the Yoon Seok-yeol administration is creating practical cooperation with both the United States and Japan," he said.

Yomiuri said, “The target is EVs assembled in North America using on-board batteries processed from important minerals such as lithium. On March 28, the U.S. and Japanese governments signed an agreement to strengthen the supply chain, resulting in an FTA between Japan and the U.S.” ” reported.