South Korean Government Asks U.S. Government to Soften EV Subsidy Requirements

The Korean government has recently requested the U.S. government to ease the requirements of the Inflation Reduction Act (IRA) for electric vehicle (EV) subsidies.

Ahn Deok-keun, head of trade negotiations at the Korean Ministry of Trade, Industry and Energy (MOTIE), has recently requested the U.S. government to ease the requirements of the Inflation Reduction Act (IRA) for electric vehicle (EV) subsidies.

Ahn held a closed-door meeting with officials from Hyundai Motor and Korea’s three major battery makers -- LG Energy Solution, SK On, and Samsung SDI -- on Aug. 11. The ministry delivered the results of the meeting to U.S. trade authorities.

The Inflation Reduction Act is expected to be approved by the U.S. House of Representatives, following the recent passage by the U.S. Senate. It stipulates that subsidies will be paid only to EVs with batteries that were produced using key materials from the United States or countries that have signed free trade agreements with the U.S. and battery parts produced in North America.

Officials from Korean automobile and battery manufacturers suggested at the meeting with the MOTIE official that the Korean government act on their behalf to ensure that the Inflation Reduction Act will not put Korean electric vehicles at a disadvantage in the U.S. market.

Ahn said that he had requested U.S. trade authorities to ease the subsidy requirements. He also explained that he conveyed Korea’s concern that the bill might go against the Korea-US Free Trade Agreement (FTA) and World Trade Organization (WTO) agreements.