Japan asks U.S. to loosen rules around EV tax credits

The Japanese government said Saturday it has asked Washington to loosen new rules around electric vehicle tax credits in the United States, on the grounds that they are putting Japanese automakers at a disadvantage.

The revised rules governing the tax credits for purchasing environmentally friendly vehicles, such as EVs, now require final assembly to be done in North America, limiting the range of Japanese EVs qualified for the purchase support.

The Japanese government conveyed its opinion to the U.S. government on Friday, calling for a flexible application of the tax credit rules so that a wide range of EV models made by Japanese automakers can qualify.

EV tax credits are a centerpiece of the Inflation Reduction Act signed into law by President Joe Biden in August. Consumers buying a qualifying vehicle, such as an EV, can receive a maximum $7,500 tax credit.

© Kyodo News