“Much of the European ire is directed at an IRA requirement that electric vehicles must have their final assembly in North America to qualify for a $7,500 tax credit. That has eliminated many European models that previously qualified, and even more could be excluded when additional domestic content provisions take effect, beginning in January.
The Treasury Department is currently developing guidance for how it will implement that tax provision, and Biden referred specifically to language that provides better treatment for countries that have a free trade agreement with the United States as one area where the law could be implemented in a flexible manner.
“That was added by a member of the United States Congress who acknowledges that he just meant allies. He didn’t mean literally free trade agreement. So there’s a lot we can work out,” Biden said.
That would solve some of the EU’s problems, since it doesn’t have a free trade pact with the United States. However, there is still the bigger problem that many of the cars that European companies sell in the United States are assembled in Europe, disqualifying them for credit because of the North American assembly requirement.
Biden did not say how that could be addressed, but U.S. lawmakers in recent days have said the administration is considering giving automakers more time to comply with the IRA provisions. That’s an issue that the France and other EU member states will continue to discuss with the United States through a recently established bilateral task force.”
https://www.politico.com/news/2022/12/01/biden-eu-ira-subsidies-00071645