Joe Biden signed the Inflation Reduction Act (IRA) in August 2022, which allocated millions to combating climate change and other energy provisions while additionally establishing a $7,500 tax credit for electric vehicles. To qualify for the subsidy 40% of the critical minerals used in electric-vehicle batteries must be sourced in the U.S. EU and South Korean officials argues that the subsidies discriminated against their automotive, renewable-energy, battery and energy-intensive industries. Proponents argue that the tax credits will help combat climate change by encouraging consumers to purchase EVs and stop driving gas powered automobiles. Opponents argue that the tax credits will only hurt domestic battery and EV producers.
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