South Korean Foreign Minister Park Jin expressed concern about the new United States (US) law on electric vehicles.
A related source said Secretary Park and US Secretary of State Antony Blinken discussed the law, which exempts electric vehicles assembled outside North America from tax breaks.
Quoted from Yonhap, Monday (22/8/2022), a US$430 billion bill, called the Inflation Reduction Act, was signed into law by US President Joe Biden on Tuesday (16/8/2022).
The law calls for expanding tax subsidies for electric vehicle (EV) buyers, but specifically for electric vehicles manufactured in North America.
The bill also has provisions meant to prohibit electric vehicles from receiving incentives if they are equipped with batteries or battery components made using minerals from China.
South Korea’s major automakers, including Hyundai Motor Co. and Kia Corp., have raised concerns over the move, as they manufacture their flagship electric vehicles, such as the Ioniq 5 and EV6, at domestic plants and ship them overseas.
The flagship electric vehicle models for both companies have gained traction in the US market in recent years. According to the source, Minister Park told Blinken that South Korean automakers were concerned about the new law and asked for flexible implementation by the US.
Following the conversation, the Ministry of Foreign Affairs and the Ministry of Foreign Affairs each issued press releases, but neither revealed any discussion of the move.
However, on the same day, Minister Park told the National Assembly Foreign Affairs committee that he was aware of the concerns of South Korean companies about the new US law and he had informed the US through various means.
Minister Park noted the Inflation Reduction Act could violate the South Korea-US Free Trade Agreement.