SEOUL – South Korea on Friday said it would provide 7 trillion won in financial support for its battery makers seeking to invest in infrastructure in North America over the next five years to help firms cope with the U.S. Inflation Reduction Act.
Government support will include lowering lending rates and insurance premiums by as much as 20% as well as providing more loans and tax credits for Korean firms’ battery and material production facilities in the region, the industry ministry said.The U.S. Treasury Department last week unveiled stricter electric vehicle tax rules, requiring automakers to source a certain percentage of critical minerals for EV batteries from the United States or a U.S. free-trade partner to qualify for new U.S.
The act requires 50 percent of the value of battery components to be produced or assembled in North America to qualify for a $3,750 credit and 40 percent of the value of critical minerals sourced from the United States or a free trade partner also for a $3,750 credit.