Dispute over electric vehicle batteries pushes US and EU to establish task force

After a new Inflation Reduction Act has been passed in the US, the European Union raised concerns, and therefore, US and EU unions have now established a task force to solve the issue.

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To resolve a dispute over batteries of electric vehicles, a task force has been established by the U.S. and European Union. The task force will put aside the manufacturers that either break WTO rules or are under the 27-nation-bloc. Well, the IRA (Inflation Reduction Act) that is passed by the U.S. Congress confirms that electric car buyers can claim a tax input of $7,500 until the vehicle is running on a battery pack made in North America. However, as per the European Union, this measure is a trans-Atlantic trade barrier. Well, the E.U. also believes the tax input bill is also discriminating in nature against foreign producers.

The EU announced on Wednesday that Bjoern Seibert, the head of the cabinet to European Commission President Ursula von der Leyen met in Berlin with U.S. Deputy National Security Advisor Mike Pyle to launch the task force. The first meeting will take place next week.

“The Task Force will address specific concerns raised by the EU related to the IRA," the Commission said. “Both sides agreed on the importance of close coordination to support sustainable and resilient supply chains across the Atlantic, including to build the clean energy economy."

U.S. Democratic Party members of Congress included the credit in the climate and health care policy law as a way of incentivizing domestic battery and electric vehicle production. But manufacturers in Europe and South Korea, which sell millions of vehicles in the U.S., have threatened to lodge legal complaints with the World Trade Organization.

The European Commission said last month that parts of the law can help fight climate change by accelerating the transition away from fossil fuels. But the EU's executive branch also expressed concerns about the potentially discriminatory nature of the electric vehicle tax credit provision.

Adrienne Watson, a spokesperson for the White House's National Security Council, welcomed the launch of the task force to continue promoting a deeper understanding of the law's meaningful progress on lowering costs for families, our shared climate goals, and opportunities and concerns for EU producers.

With inputs from PTI