European Automotive Industry in the Century of Asia

policies such as the Inflation Reduction Act or the Net Zero Industry Act, which aim to build domestic supply chains and reduce reliance on Chinese EV technologies. 3.3 Regulation and Promotion of Electromobility in the US The US has the most extensive experience in regulating local pollutants through the Clean Air Act, which imposed the first mandatory limits in 1975. Currently, the limits aim at the most ambitious targets for 2025 in relation to the regions studied (ICCT, 2017). On the other hand, greenhouse gases (CO 2 limits) were only included in specific legislation in 2010, with an effective date of 2012. In doing so, they extended and updated a similar regulation on monitoring total fuel consumption (“CAFE”), which had been in place (and little updated) since 1975 and was included in the Energy Policy and Conservation Act. However, this law was initially designed to respond to oil shocks and fuel shortages. The State of California (Tesla’s home base) has long been a leader in the development of electric mobility, first adopting targets for electric vehicle production and development in the 1990s and statewide standards for greenhouse gases from personal transportation in 2002, including a financial and non-financial support model. Other US states have been inspired by the above legislation and California’s new statewide programme introduced in 2012, which again tightened individual emission limits beyond the national standards (CARB, undated). However, it is only in 2022 that the US will return to a comprehensive industrial policy to support domestic manufacturing and EV deployment. The primary tool to support EV development is the so-called Inflation Reduction Act, signed by US President Joe Biden in August 2022, which aims to reduce energy costs for households and small businesses, accelerate private investment in clean energy solutions, strengthen supply chains for critical minerals or electrical equipment, and create jobs in new sectors of the economy. The legislation is expected to generate USD 370 billion in total investment and contribute to a 40% reduction in US greenhouse gas emissions by 2030 compared to 2005 levels (White House, 2023). The Inflation Reduction Act introduces the key measure to support EVs, the Clean Vehicle Credit, a tax credit for the purchase of EVs by individuals. Individuals with gross annual incomes not exceeding USD 150,000 (up to USD 300,000 for some exemptions) will be eligible for a tax credit of up to USD 7,500 for the purchase of a new electric or fuel cell electric vehicle up to a maximum of $55,000 ($80,000 for vans, sport utility vehicles and pickup trucks). The vehicle must meet critical mineral and battery component requirements to qualify for the tax credit. The applicant may receive a tax credit of USD 3,750 for critical materials if their percentage in the battery meets or exceeds the thresholds listed below (U.S. Department of Energy, 2023). At the same time, the critical minerals must be mined or processed in the US or in countries that have free trade agreements with the US and/or recycled in North America:

For 2023: 40%, For 2024: 50%,

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