Biden's generous tax credits could reportedly be hard to obtain for electric vehicle makers as manufacturers are barred from securing graphite from Chinese suppliers to qualify for the subsidy scheme.
Ahn Duk-Geun, South Korea's minister of trade, industry, and energy, told the sources that no vehicle may qualify for the substantial tax credits that the Biden administration is offering EV buyers if battery makers are not allowed to obtain graphite from Chinese suppliers under an exemption to the FEOC rules.
(Photo: Doug Mills/Pool/Getty Images) US President Joe Biden visits Wolfspeed, a semiconductor manufacturer, in Durham, North Carolina, on March 28, 2023.
The US is looking to bar EV manufacturers with close ties to Beijing. Biden's Inflation Reduction Act aims to remove "foreign entities of concern" from the US EV supply chain. These limits are set to take effect on January 1, 2025, and include businesses with close ties to Beijing.
These restrictions, however, are problematic. According to Benchmark Minerals Intelligence, a consultancy, Chinese companies have over 99% of the global market for battery-grade graphite and 69% for synthetic graphite, which is used in battery anodes.
With such dominance in the EV battery supply chain, nearly no EV maker could use the subsidy scheme.
South Korea's US Investments
South Korea, in particular, has recently taken advantage of significant subsidies for the production of semiconductors and batteries. South Korean corporations have already committed to investing tens of billions of dollars in state-of-the-art technology facilities in the US.
South Korean electronics giant Samsung Electronics, which is investing $40 billion in its Texas facilities for cutting-edge logic chips, advanced packaging, and research and development on next-generation chip technologies, was officially declared to receive up to $6.4 billion in federal subsidies from the US last week.
Memory chip manufacturer SK Hynix is constructing modern packaging in Indiana.
As per Benchmark, South Korean battery manufacturers LG Energy Solution, SK On, and Samsung SDI, who have all been awarded billions of dollars under the IRA, are expected to hold 44% of North America's total battery capacity by 2030.
US on Chinese Solar Panel Technology
Biden continues to limit Beijing in various fonts, most recently, the administration started considering lifting tariff exemptions on Chinese solar panel technology as petitioned by South Korean Conglomerate Hanwha Qcells.
The Korean company Hanwha Corp. expressed this wish in an official petition to the U.S. Envoy for Trade on February 23. Seven additional companies that had collectively invested billions of dollars in solar manufacturing in the US sent letters of support with the appeal.
The sources state that no decision has been made about the expected reversal date. Over forty solar equipment firms that the United States has planned to gain from import taxes on bifacial panels, the main technology utilized in utility-scale solar operations.
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(Photo: Tech Times)
