To Make Korean Firms Eligible for Benefits
The U.S. Department of Energy recently had a meeting with LG Energy Solution, SK On, Samsung SDI, Lotte Chemical and POSCO Chemical to exchange opinions on the Inflation Reduction Act.
The act is to limit EV subsidies to those equipped with batteries containing less Chinese materials and components and limit tax deduction benefits to those produced in North America.
For South Korean EV battery manufacturers to get the benefits, the ratio of components produced in North America in their batteries must be raised from 50 percent in 2023 to 90 percent in 2028. In addition, the ratio of minerals produced in the region consisting of the United States and its FTA partners must be raised from 40 percent in 2023 to 80 percent in 2027.
At present, most key materials used in EV batteries are produced in China and it is practically impossible to meet the requirements in the near future. The meeting was held in order to discuss how to overcome the impossibility.