Policies Matter: Volkswagen, Mercedes, & Hyundai React To Inflation Reduction Act

Ms. Cat’s Chronicles

Policies Matter: Volkswagen, Mercedes, & Hyundai React To Inflation Reduction Act

In June, Johan DeNysschen, the COO of Volkswagen of America, told Bloomberg his company is considering the construction of a battery manufacturing facility in North America. That would satisfy the requirement in the Inflation Reduction Act that batteries are manufactured in the US or other countries that are approved trading partners. According to the current North American free trade agreement, American trade officials consider anything made in Canada or Mexico to be domestically produced.

But manufacturing is one thing, The IRA goes further and requires the materials used to manufacture products also be sourced from approved trading partners. Canada is certainly one of them.

Then the roof fell in. The IRA only applies to vehicles built in the US, and that Georgia factory was not scheduled to be up and running until 2025. Two weeks ago, Hyundai…

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