Automotive Industry Cooperative Delivers Position Letter from Domestic Auto Parts Sector on US IRA

"Equal Tax Credit Benefits Should Be Granted to Allies"

[Asia Economy Reporter Kiho Sung] The Korea Automobile Industry Cooperative sent a letter to the U.S. Department of the Treasury and key members of Congress on August 16 (local time) requesting equal tax credit benefits for allied countries in relation to the Inflation Reduction Act (IRA) enacted in the United States.

The cooperative announced on the 3rd that it had sent such a letter to the U.S. The cooperative is a non-profit organization comprising about 250 automotive parts companies including Hyundai Mobis, Mando, and Hanon Systems.

In a letter signed by Chairman Dalsuk Shin, the cooperative stated, “Currently, all electric vehicles are produced domestically and exported overseas, but due to the implementation of the Inflation Reduction Act, a decline in price competitiveness is inevitable, which will impact exports to the U.S. and domestic automobile production.” It added, “Our parts companies, which are facing difficulties due to the transition from internal combustion engine vehicles to electric vehicles, are experiencing even greater challenges due to the decrease in domestic electric vehicle production, and we are deeply concerned that the ecosystem may collapse as we fall behind the global electric vehicle trend.”

It continued, “Korean automotive parts companies are key partners of U.S. automakers, supplying competitive parts that contribute to enhancing the brand value of American companies,” and “We are actively pursuing supply chain diversification and local expansion in the U.S. to ensure stable and efficient supply of electric vehicle parts to major American automakers.”

The cooperative urged, “We ask the U.S. Congress and relevant government agencies to remove discriminatory elements so that electric vehicle tax credit benefits can be equally applied to electric vehicles and batteries produced in allied countries of the U.S.,” and emphasized, “If removal is difficult, we request a ‘3-year application grace period’ for companies like Korean firms that are building electric vehicle factories within the U.S.”

This content was produced with the assistance of AI translation services.