EU, US Work on Deal to Make EV Minerals Eligible for Tax Credits
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EU, US Work on Deal to Make EV Minerals Eligible for Tax Credits

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Antonio Gozain By Antonio Gozain | Senior Journalist and Industry Analyst - Mon, 03/06/2023 - 09:14

The US and EU are working toward a preliminary agreement that would allow European minerals used in EV production qualify for tax credits, a senior EU official told Reuters.

In August 2022, the US$430 billion US Inflation Reduction Act passed, requiring an increasing percentage of battery minerals to come from the US or a Free Trade Agreement partner. The EU official stated that an agreement may be reached as early as next week, in time for European Commission President Ursula von der Leyen’s visit to Washington, and would provide the EU with "free trade agreement-like status."

While the White House has not commented on whether a high-level agreement could be reached before von der Leyen's visit, it emphasized the importance of maintaining a strong working relationship with the EU.

The tax credits will be available for critical minerals used in batteries once the US Treasury issues guidance later this month. The EU official stressed the urgency of reaching an agreement, as some EU companies are already shifting production to the US.

Although the US is pressing for the agreement to be legally binding, it may be difficult to have this in place before von der Leyen's visit, the official added. However, he believes that a commitment to reach an agreement quickly could be a potential outcome of the discussions next week, reports Reuters.

Crucial to Develop Infrastructure to Encourage Electromobility: AMDA Queretaro

Mexico must focus on developing infrastructure to support electromobility, says Laura Rodríguez Miranda, President, AMDA Queretaro. While Queretaro has made progress in this area by providing outlets for charging EVs at state agencies, more charging stations are needed on highways and other entities to increase coverage for EVs, she adds.

“Mexico must prepare itself technologically as a country. In Queretaro, we are prepared and have advanced hand-in-hand with the brands,” says Rodríguez. Charging electric units within Queretaro is not a problem, she adds, but in other areas, finding electricity supply stations is difficult. She estimates that the charge of a battery allows for journeys of almost 300km, emphasizing the need for more charging infrastructure to support EV growth in Mexico.

“The arrival of Tesla to Nuevo Leon leaves me with the reflection that state governments must make an effort to develop EV infrastructure. If you own an EV in Queretaro, you will not have complications, there is enough infrastructure to own it. But if you leave Queretaro and want to go to another state it gets complicated,” says Rodríguez.

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