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Government support will include lowering lending rates and
insurance premiums by as much as 20% as well as providing more
loans and tax credits for Korean firms' battery and material
production facilities in the region, the industry ministry said.
The U.S. Treasury Department last week unveiled stricter
electric vehicle (EV) tax rules, requiring automakers to source
a certain percentage of critical minerals for EV batteries from
the United States or a U.S. free-trade partner to qualify for
new U.S. federal incentives under the Inflation Reduction Act.
The act requires 50% of the value of battery components to be
produced or assembled in North America to qualify for a $3,750
credit and 40% of the value of critical minerals sourced from
the United States or a free trade partner also for a $3,750
credit.
"Both the government and businessmen should cooperate to find
solutions together to effectively cope with situations changing
rapidly after the Inflation Reduction Act," Trade Minister Lee
Chang-yang said while presiding over a meeting with major
battery cell makers and materials firms.
In November, South Korea launched the government-backed battery
alliance to better source key metals dominated by China to
bolster battery supply chain stability.
South Korea's LG Energy Solution Ltd (LGES), Samsung SDI Co Ltd
and SK On comprise three of the world's five biggest EV battery
cell makers, commanding more than a quarter of the global market
and supplying the likes of Tesla Inc, Volkswagen AG and General
Motors Co.
In March, LGES said it would resume a stalled U.S. battery
project with a $5.6 billion investment in Arizona to qualify for
federal incentives under the Inflation Reduction Act.
($1 = 1,316.2200 won)
(Reporting by Heekyong Yang; Editing by Christopher Cushing)
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