Korea, U.S. work on IRA incentives for local EVs

Seoul and Washington will work out their differences on the American law on tax credits for electric vehicles (EVs), said Second Vice Foreign Minister Le Do-hoon in a press conference with the U.S. under secretary of state for economic growth…

Jose W. Fernandez, U.S. under secretary of state for economic growth, energy, and the environment, left, and Lee Do-hoon, second vice foreign minister, speak with the press in Seoul after their meeting at the Foreign Ministry on Tuesday. [YONHAP]

Seoul and Washington will work out their differences on the American law on tax credits for electric vehicles (EVs), said Second Vice Foreign Minister Le Do-hoon in a press conference with the U.S. under secretary of state for economic growth, energy, and the environment in Seoul on Tuesday.

“We shared the view that the [U.S.] Treasury Department will evaluate its additions to the provisions of the law based on the consultations between Korea and the United States,” Lee told the press after a meeting with Jose W. Fernandez at the Foreign Ministry, "and reaffirmed our agreement to continue to make joint efforts to mitigate discriminatory measures against Korean companies and to build a mutually beneficial supply chain ecosystem."

Fernandez reassured the Korean public that Washington is taking “the ROK concerns about the law seriously,” referring to Korea by the acronym for its full name, Republic of Korea. He added that the U.S. government will work together with Korea and other allies on the U.S. Inflation Reduction Act (IRA).

Their meeting was their second in several weeks. Lee visited the United States in December to discuss Korea’s concerns about the IRA.

The IRA, signed by U.S. President Joe Biden last August, grants up to $7,500 in tax credits to buyers of EVs assembled in North America.

Korea is concerned because it prohibits subsidies for purchases of EVs made outside the United States or with batteries made with Chinese minerals or components. Hyundai Motor and Kia both make EVs in local plants in Korea.

It asked the U.S. government in November to give the IRA tax incentives for three years to cars sold by companies currently building EV factories in the U.S. This way, people buying Korean EVs made outside of the United States would be able to get the subsidies in the period before Hyundai Motor's EV factory in the U.S. opens in 2025.

Lee flew to Washington D.C. last month to meet with Fernandez and members of the U.S. Congress to lobby the U.S. government.

The two also reiterated plans to expand cooperation on critical minerals.

“Initiatives that include moving forward on our Minerals Security Partnership, joint research and development in critical and emerging technologies, and promoting supply chain resilience, the ROK has been a very important, critical partner in these initiatives, and we are going to do some more,” Fernandez said in the press conference.

Chinese state mouthpiece the Global Times on Monday criticized the meeting, calling it a desperate move by Washington to “bring South Korea on board in forming its small circle to exclude China from the global chip industrial chain.”

Foreign Minister Park Jin and newly sworn in Chinese Foreign Minister Qin Gang spoke over the phone on Monday evening to discuss issues between their two countries, including supply chains and regional security.

BY ESTHER CHUNG [chung.juhee@joongang.co.kr]