European Commission president debates electric vehicles with Biden

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US President Joe Biden and European Commission President Ursula von der Leyen met Friday to try to complete a plan that the White House hopes will turn the page on a spat between the US and European Union over electric vehicle tax credits.

Biden and von der Leyen opened negotiations between Washington and Brussels on a deal that could boost the use of European minerals critical in the production of electric vehicle batteries that are eligible for US tax credits through Biden’s roughly € 352 billion clean energy law that passed last year.

Biden, hosting von der Leyen in the Oval Office, said the alliance to support Ukraine marked “a new era.”

However, tensions are swirling in Europe over the Biden administration’s landmark Inflation Reduction Act (IRA), a government spending spree championing US manufacturing in climate-friendly technologies.

Speaking to reporters outside the White House following the meeting, von der Leyen said, “Today, we agreed that we will work on critical raw materials that have been sourced or processed in the European Union and give them access to the American market as if they were sourced in the American market.”

The inflation reduction legislation stipulates that if US consumers want to be eligible for a tax credit of up to €7,043 on their EV purchase, the EV’s battery need to largely contain minerals from the US or a country with which Washington has a free-trade agreement.

Additionally, 50% of components in batteries must be manufactured or assembled in North America by 2024, with that percentage rising gradually to 100% by 2028.

The European Commission, in part, responded by launching its own Green Deal Industrial Plan last month in response to Biden’s legislation. The measure is expected to make it much easier to push through subsidies for green industries and pool EU-wide projects.

“I think for us it’s very important that…we join forces because it is crucial for our future for fighting climate change and limiting global warming,” von der Leyen said.

 “So for us, it was and is important that we join forces, that we are complementary, that we boost the respective cleantech industry on both sides” she added.