Transatlantic Collaboration Between US and EU To synchronise EV Incentive Initiatives


10 March 2023: During a meeting at the White House, US President, Joe Biden and EU Commission President, Ursula von der Leyen announced that they are aiming to negotiate a deal on crucial minerals needed for electric vehicle battery manufacturing. As a part of this agreement, electric cars produced in the EU would be able to qualify for US tax credits that are currently only available to vehicles made in North America.

Furthermore, the agreement would guarantee supply chains for EU battery manufacturing and a hassle free entry into the US market. This implies that critical materials extracted in the EU would receive equivalent market access to those obtained within the US in the American market.

In a joint statement, Biden and von der Leyen said, ‘‘Today, the United States and the European Commission announced the launch of the Clean Energy Incentives Dialogue to coordinate our respective incentive programs so that they are mutually reinforcing’’.

“We are working against zero-sum competition so that our incentives maximise clean energy deployment and jobs—and do not lead to windfalls for private interests’’, the statement reads.

Last week, the EU Commission also announced its own subsidy programme. If there’s a likelihood of a company relocating, countries can now balance out any subsidies provided by a non-European government to persuade the company to stay within the EU. The commission has implemented a set of updated state aid regulations called the ‘‘Temporary framework for crisis management and change’’. This amendment is valid until the end of 2025.

The US and EU agreement aimed to coordinate their respective electric vehicle incentive programmes is a significant step towards maximising the deployment of clean energy and job creation. By working together towards mutual goals of promoting clean energy and reducing emissions, the US and EU demonstrate the power of international cooperation in addressing global challenges. This agreement sets an example for nations to follow, as the world shifts towards a more sustainable future.