South Korea welcomes US decision to extend use of Chinese graphite in EVs

Samsung SDI

08/05/2024 11:12

SEOUL, May 8 (Reuters) - South Korea on Wednesday
welcomed a U.S. decision to extend automakers' eligibility for
electric vehicle tax credits for cars containing Chinese
graphite through 2026.
    The U.S. is trying to wean the electric vehicle battery
chain away from China through its Inflation Reduction Act which
is being closely monitored by automakers as they make investment
decisions.
    South Korea's industry ministry said it will continue to
seek to secure key battery materials so domestic battery
manufacturers and carmakers can maintain their competitiveness
in the U.S. market by meeting the requirements of the Inflation
Reduction Act.
    "In the case of graphite, it was difficult to diversify the
supply chain in a short period of time, making it difficult to
receive U.S. EV tax credits for batteries ... we have been
actively consulting with the U.S. government, and our request
(of extension of graphite use) was reflected in the final
rules," the industry ministry said in a statement. 
    The ministry said South Korean battery makers, including LG
Energy Solution  373220.KS , Samsung SDI  006400.KS  and SK On
that attended the meeting, welcomed the reprieve.
    The new rules now let car buyers get up to $7,500 in tax
credits for electric vehicles (EV) containing Chinese graphite
through 2026. 
    The ministry added that it would provide 9.7 trillion won
($7.11 billion) in financial aid to support efforts of the
country's EV sector to secure a self-sufficient supply chain.  
    Last week, the U.S. Treasury Department said it would give
automakers until 2027 to reduce some hard-to-trace minerals like
graphite contained in anode materials and critical minerals
contained in electrolyte salts, binders, and additives.
    The Industry Ministry said it will help companies meet
requirements such as submitting plans to the U.S. on how they
will diversify graphite supplies from 2027 and make “accurate
calculations” of the values of battery minerals to receive tax
credits. 
($1 = 1,363.5100 won)

 (Reporting by Heekyong Yang;Editing by Elaine Hardcastle)
 ((Heekyong.Yang@thomsonreuters.com;))