The US President and the EU Chief have initiated talks in a bid to mend their rift over taxes on electric vehicles (EVs).

At present, the US offers tax credits to EV owners under the Section 30D clean vehicle tax credit scheme, which the EU argues favours American-made EVs over their European counterparts.

The EU is looking at negotiating a critical minerals agreement to enable minerals extracted or processed in Europe to qualify for the Section 30D clean vehicle tax credit of the Inflation Reduction Act.

In a joint statement, it is stated: “The kind of agreement would further our shared goals of boosting our mineral production and processing and expanding access to sources of critical minerals that are sustainable, trusted and free of labour abuses.

“Cooperation is also necessary to reduce unwanted strategic dependencies in these supply chains and to ensure that they are diversified and developed with trusted partners.”

On #IRA, two new major steps:

→ Starting on a critical raw materials agreement

To secure strong supply chains for batteries in 🇪🇺 & ensure access to the 🇺🇸 market

→ Launching a dialogue on Clean Energy Incentives

So our incentives reinforce each other rather than compete pic.twitter.com/xh6zWxGAMf

— Ursula von der Leyen (@vonderleyen) March 10, 2023