The US is seeking to assuage Hyundai Motor Co.’s concerns over parts of President Joe Biden’s climate and energy bill, which the South Korean carmaker has argued could put it at a disadvantage in the American market, a senior administration official said.
(Bloomberg) — The US is seeking to assuage Hyundai Motor Co.’s concerns over parts of President Joe Biden’s climate and energy bill, which the South Korean carmaker has argued could put it at a disadvantage in the American market, a senior administration official said.
Jose W. Fernandez, under secretary for economic growth, energy and the environment at the State Department, told reporters Wednesday during a visit to Seoul the Biden administration is discussing Hyundai’s apprehensions over the Inflation Reduction Act, signed into law last year.
“They are creating jobs, good jobs, and that’s why we have — rather than simply saying ‘hey, tough luck’ — we’re saying let’s just sit down and discuss these,” Fernandez said, adding he has worked almost daily “for the last couple of months looking at the IRA and fielding concerns from our allies.”
The act requires electric-vehicle makers to assemble their cars in North America and reduce their reliance on China for battery components and materials to get a maximum $7,500 in tax credits. That’s been a major blow to Hyundai and affiliated Kia, which don’t have any operational EV plants in the US.
The South Korean carmaker said in May it is investing $5.5 billion to build an EV assembly and battery plant near Savannah, Georgia. Hyundai said the project would create 8,100 new jobs at the twin plants, breaking ground in early 2023 with production to start in 2025.
“We very much value the investments,” Fernandez said, adding that during his visit he has held meetings with officials from Samsung, Hyundai, SK and Hanwha.
Late last year, the US Treasury Department signaled some imported cars would qualify for EV tax credits in the IRA through a commercial-vehicle provision in the law by leasing them. Fernandez said the category makes up between 20% and 40% of the market depending on the year of car sales in the US.
The US is at “very good place” with South Korea in terms of working together on a number of joint projects including on initiatives such as the Indo-Pacific Economic Framework, as well as on Minerals Security Partnership, Fernandez said.
Read more: South Korea Sees ‘Betrayal’ in Biden’s Electric Vehicle Push
While he declined to comment on the possibility of adding more countries that produce minerals critical to battery production under the IRA, he said the US is working with 14 nations on investing, identifying and financing critical minerals under the Minerals Security Partnership. The gathering among the US, EU, Japan and other wealthy nations is part of a bid to shift the supply chain for rare-earths minerals away from China.
Fernandez, who’s planning on visiting South Africa to have a related discussion, said he has been talking to countries in Africa and Latin America.
In order to reach net-zero emissions by 2050, the US needs six times the amount of lithium it has today, which won’t be coming from the existing mines, and Washington will need to find other supplies, Fernandez said.
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