Market: EU remains cautious after US announcements on tax breaks for electric vehicles

BRUSSELS (Reuters) – The European Commission (EC) on Thursday cautiously welcomed announcements from the United States that European companies could partially benefit from the Biden administration’s Inflation Reduction Act (IRA).

The IRA, which notably provides tax credits for the purchase of electric vehicles produced in US factories, raises fears that the US will take first place in the electric vehicle market to the detriment of European countries.

The EC found that the roadmap published on Thursday by Washington indicated that professionals buying vehicles sold by European manufacturers could benefit from tax credits, but that these credits would not apply to sales of vehicles to individuals.

According to the Commission, this plan remains worrying with provisions discriminating against clean vehicles and raw materials produced in the EU, and represents a breach of international law.

The EU also announced that a joint working group had been set up to discuss the issue and would seek solutions to the EU’s concerns.

“We welcome the US announcement today that it will take more time to work on the matter, which will allow the US to satisfactorily resolve these issues,” the EU said.

(Reporting by Philip Blenkinsop; French version by Camille Raynaud)

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