Japan’s industry minister has warned the US that a new law on electric vehicle tax credits may violate international law. The Ministry of Economy, Trade and Industry confirmed that Yasutoshi Nishimura had expressed his concerns over the law when he met US Commerce Secretary Gina Raimondo in Los Angeles, at the Indo-Pacific Economic Framework talks.
The law restricts tax credits for electric vehicles to those assembled in North America. After President Joe Biden signed the legislation, credits for about 70% of the 72 models that were previously eligible ended, according to the Alliance for Automotive Innovation, an industry trade group.
The Biden administration said in mid-August that about 20 models still qualify for tax credits of up to $7,500. The auto industry group said, however, that new restrictions that will take effect on January 1 regarding battery and mineral sourcing and price and income caps will make all, or nearly all, EVs ineligible.
The Japan Automobile Manufacturers Association, a major Japanese auto lobby, said last month it was concerned about the law and would keep a close watch on developments.