The United States relaxes the use of Chinese graphite for batteriesBallcrashfrvrSouth Korean media rejoice at the restrictions on tax credits for electric vehicles: can't do without Chinese graphite.
A number of South Korean media focused on a piece of "good news" for the South Korean automobile industry on the 4th, due to rumors from Reuters and other international media. The US Treasury Department said on May 3 local time that it will release more "flexibility" in terms of automakers' access to electric vehicle tax credits, which means that when South Korean electric car manufacturers using Chinese graphite to make batteries enter the US market. You can also get a tax credit of up to $7500. South Korean media noted that the news was "good" for South Korea because South Korean car companies need to rely on graphite from China to produce batteries, which they cannot do without at present.
The U.S. Treasury Department said on May 3 local time that it would provide automakers with more "flexibility" in the tax credit for electric vehicles regarding the use of minerals for batteries carried, including Chinese graphite, Reuters reported. According to the Wall Street Journal, this means that electric vehicles that allow US consumers to buy batteries using Chinese graphite by the end of 2026 will still receive a tax credit of up to $7500.
According to previous media reports, the US battery procurement policy originated from the "rebuilding a better Future Act" put forward by the Democratic Party in 2021 and was signed into the "inflation reduction Act" by US President Joe Biden on August 16, 2022. Under the bill, the US government will provide a tax credit of up to $7500 for each electric vehicle, but the "prerequisite" is that the vehicle is assembled in North America and that a certain proportion of key raw materials for battery components are mined or processed in North America. In addition, from 2024, new energy vehicles eligible for relief cannot contain battery components manufactured or assembled by "concerned foreign entities" (FEOC), according to information released by the US Treasury Department. The US defines FEOC as any company owned, controlled or controlled by North Korea, China, Russia or Iran, but clearly the main target is China. In addition, according to US regulations, tax credits will not be available for any key minerals manufactured or assembled by concerned foreign entities starting in 2025.
But the latest news from Reuters said on the 3rd that the US Treasury Department has temporarily exempted the restrictions on graphite and other key minerals from FEOC regulations. According to the Wall Street Journal, this means that the Biden government has relaxed the proposed tax credit for electric vehicles, which will still receive subsidies of up to $7500 for electric vehicles whose batteries use Chinese graphite by the end of 2026. The report commented that this "mitigation measure" makes it easier for automakers to build and sell vehicles that are fully eligible for the tax credit.
The above news attracted the attention of South Korean media, Yonhap news agency reported on the 4th that the US government has decided to pay a two-year subsidy for electric vehicles whose batteries use Chinese-made graphite. In fact, since the United States listed China in the FEOC in December last year, the South Korean industry has been worried that it will be difficult to get subsidies at a time when the world's electric vehicle and battery industry is heavily dependent on Chinese graphite. In particular, graphite is an indispensable core mineral in batteries, but China currently dominates the material, so it is expected to take years for South Korea to find a supply chain to replace China, Yonhap news agency said.
South Korea's Central Daily also said it was "good news" for South Korean electric car makers and the battery industry. As far as graphite is concerned, it is difficult for South Korea to find a supplier to replace China, which is why the South Korean government and the electric car industry have been asking for a delay in the application of the policy.
According to the Central Daily, in an interview with the Financial Times last month, Andergen, South Korea's minister of industry, trade and resources, said frankly, "if there is no exception to Chinese-made graphite, then any electric car may not be able to enjoy the tax credit provided by the Biden government, and the subsidy system for electric vehicles in the United States will collapse."
In addition, South Korea's Hyundai Motor Group expressed concern in a submission to the US government at the beginning of the year that it would be difficult for other countries to replace China in the production and refining of graphite in the short term, the Central Daily said.
Previously, when the United States passed the inflation reduction Act, which included tax relief measures, China had publicly expressed concern about this improper and discriminatory move by the United States. On December 21, 2023, Foreign Ministry spokesman Wang Wenbin responded at a regular press conference that the relevant measures, in the name of security, pursue "America first", violate the principles of market economy and fair competition, and threaten the supply chain security of the global industrial chain. it is naked protectionism and is suspected of violating the principles of most-favoured-nation treatment and national treatment of the WTO. As soon as it was proposed, it aroused strong dissatisfaction in many countries, including the European allies of the United States. The so-called new rules recently released by the United States are an upgraded version of "American protectionism," which the Chinese side firmly opposes.
"BallcrashfrvrWe urge the United States to abide by the rules of the WTO, maintain a trade order of fair competition, and provide a fair, fair and non-discriminatory business environment for enterprises of all countries. China will closely follow the follow-up situation and take measures to safeguard its legitimate rights and interests if necessary. " Wang Wenbin said.
Source: world wide Web / Jiang Ailing
Editor: Liu Jie
Proofread: Suo Yanqi
Vetting: winter melon man