Inflation Reduction Act

In general, there are three biggest automotive markets in the world. They are China, the US and Europe. When it comes to Electric Vehicles (EVs), China is the biggest market like the combustion engine vehicle market. Next one is the European EV market in 2022. In fact, the continent set the new rule to ban the sales of new combustion engine vehicles in the future. As a result, many European automotive manufacturers decided to increase the sales of EVs in the continent.

The American EV market was relatively behind those two markets. However, the US government set the Inflation Reduction Act (IRA) in 2022. As a result, the business landscape has been changing rapidly and drastically. For example, there was the news in relation to subsidy of purchase of eco-friendly vehicles in the week of April 17th.

General Motors, Ford, Stellantis and Tesla are the only four automakers with electric vehicles that qualify for $7,500 in tax credits in 2023. This news was kindly surprising because there was no German, Japanese and South Korean automotive companies. Many experts criticize this decision since it is too protectionism.

*Later, there was the news that Volkswagen’s battery electric vehicles, MY23 ID.4 models, will be also subsidized.

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