China calls shenanigans on US EV policy, complains to WTO

Jessica Tsai; Samuel Howarth, DIGITIMES Asia 0

Credit: AFP

The EU is following the US example.

China will file a complaint with the World Trade Organization (WTO) against the US electric vehicle policy. Beijing is accusing the United States of hindering US electric vehicle manufacturers from purchasing battery materials from China.

Bloomberg reported that the Chinese Ministry of Commerce said the US Inflation Reduction Act (IRA) and related provisions are discriminatory. The act seriously disrupts the global electric vehicle supply chain, it added.

Chinese Ministry of Commerce announced that it will file a complaint with the WTO. It called on the United States to correct what it called discriminatory industrial policies.

Chinese new energy vehicle companies such as NIO, XPeng, and BYD are actively expanding overseas markets in Asia, Europe, and South America. However, the electric vehicle industry increasingly finds itself caught up in global trade politics and geopolitical wrangling.

The US is not alone in taking steps to exclude Chinese battery companies from its turf. The EU is investigating Chinese government subsidies to the automotive industry.

The EU is reportedly not ruling out tariffs on electric vehicles imported from China. The tariffs are understood to be a response to unfair subsidies from the Chinese government.

Under the IRA policy finalized by the United States, car manufacturers can receive up to US$7,500 in US consumer tax credits for new electric vehicles. Car makers can receive the cash as long as they meet certain requirements.

Manufacturers must comply with US restrictions on battery materials. Vehicles equipped with battery components manufactured or assembled by so-called "Foreign Entities Of Concern" (FEOC) will no longer qualify for tax credits.