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Japan raises concern over U.S. eligibility rules on EV subsidies

  • September 9, 2022
  • , Nikkei Asia , 3:02 a.m.
  • English Press

By SATSUKI KANEKO, Nikkei staff writer


LOS ANGELES — Japan has expressed concern to the U.S. that Japanese electric vehicles may not be eligible for Washington’s new subsidy program. 


Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura, who is visiting the U.S., told Commerce Secretary Gina M. Raimondo on Wednesday that sales of Japanese-brand EVs could be hurt by the eligibility conditions for tax incentives.


The Inflation Reduction Act, which was signed into law by U.S. President Joe Biden last month, offers tax incentives for EVs assembled in North America as part of measures to tackle climate change. Tax incentives also target EV batteries sourced from North America or from nations that have free trade agreements with the U.S.


Japanese brands are already struggling as late comers to the market, and Toyota Motor and its peers make almost no EVs or plug-in hybrid vehicles in North America.


Nishimura also noted that the measure may run afoul of World Trade Organization rules. Raimondo showed a willingness to discuss the issue further, according to the Japanese side.


Nishimura will attend a ministerial meeting scheduled for Thursday and Friday for the Indo-Pacific Economic Framework, a U.S.-led economic initiative that counts 14 countries as participants. On the agenda will be strengthening supply chains through such steps as improving information sharing among members.

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