How Inflation Reduction Act Stirs up Global EV Industry？
Today we will discuss something that may have a negative impact on the global Eva industry. The inflation reduction Act on August 16 2022. The Act was signed into law by President Biden. Dont be fooled by its positive name is actually a click bait. The Act was under the disguise of reducing inflation, but in fact it aims to against the globalization forcefully change the industry and trade structure and Foster the uncompetitive American EV industry through path policy and dominating International status. So how will this act affect the EV industry worldwide? Can it really create a bright future for the American evil industry foreign States in relation to clean vehicles simply put it provides tax credits for eligible ones, it its obvious that you need something to attract people to buy your ebays, so in this case its a price. This clean vehicle credit is worth up to 7500 US dollars for buying a new eBay and a Maximus 4 000 US dollars for a used one, however, its not so easy for a car to be eligible. Firstly, the EV must be assembled in North America, and its power cell must be produced in North America. Secondly, and eBay must have at least 40 percent of the battery raw materials that come from the United States. Other countries with the U.S FTA and this requirement will be increased to 80 percent in 2027.. Besides at least 50 percent of the components in the power battery must be manufactured or assembled in North America and 100 by 2029.
To sum up, an eligible EV must be built and assembled in the U.S. Its key components must be manufactured in the U.S, and the supply chain must be supported by the U.S or the poor American countries, its obvious that this law is not only their effort to grow the eBay Market, but also to rebuild the Intel industry chain. In other words, for countries like China, any price Advantage brought by a low cost and high efficiency production line will no longer exist in the United States. In fact, this is similar to Chinas joint venture strategy 30 years ago. The core concept is to treat market for the technology, but its obvious that Americas approach is more direct under brutal and it may not necessarily lead to a positive result. Foreign looking at the number from 2010 to 2021, roughly 81 percent of E Waste and 33 of PhD events in the United States was produced locally, and the battery was also mainly supplied by the U.S, Japan and South Korea. However, if you look at the industrial chain closely, things are not so simple: South Korea, for example, being a major battery provider, is actually heavily dependent on China for the raw material from January to July 2022, 84.4 percent of the lithium hydroxide used for producing batteries was Imported from time and the overall dependence of raw materials on China is over 50, this means that South Koreas Hyundai, which ranks second in the United States in terms of EV share, will have to reorganize its industrial chain to make the cars eligible, and the same goes For Japan, as for Europe, the energy companies have been in a tough position since the Russian Ukraine conflict broke out.
They were already thinking of relocating to other countries such as China, where theres a well established industry team. But now the United States is using the old carrot and stick approach forcing European companies to take sides. In fact, some European outsourced career companies have made their choices, for example, Honda motor group and SK the battery maker plan to invest 1.9 billion to build a new electrical vehicle battery plant in the U.S Swedish batteries start up. Northport is also considering delaying production at its German plant and the prioritizing its expansion in America. This is when some European politicians begin to show their anger Europes. Modern diplomacy website bluntly joked. The United States is the cause of Europes, wealth outflow and is the Europes Real Enemy Music? What about a Chinese energy companies taking the ATL, which accounts for 35 percent of the global power battery share as an example lets see what decisions it can make? Actually, CTR has been planning to build a factory in North America for quite some time. After all, there are big customers like Tesla and Ford, so in February, 2022 Founders on YouTube made it clear that the company must have made its way into the U.S market. However, theres a big problem if it becomes dependent on the U.S for raw materials, K, components and other things, the related industry Alliance will put forward a series of core technology requirements which may lead to technology outflow. The Koreans may be forced to give into their hashimony of the United States, but when the sign of American relations are tense and Americans may swing, they are faced at any time say it here may not dare to take that risk.
First of all, this policy is closely related to the fact that there are only a few car manufacturers and Battery manufacturers in the United States. It does not have such a diversity as a Chinese market, so car companies will have to spend a lot of money to engage in the industrial chain and the policy only further guides this trend, but in case you dont know, China has spent at least 15 years Establishing such a huge EV industry supply chain, the United States has to go through the same process if it wants to recreate a similar system. Moreover, an industry cannot be reorganized or relocated at will, because reinvestment is a huge cost, which means the strong will only get stronger at the same time in terms of global technology, development, innovation in a single aspect has not hit a battle such as upgrading the manufacturing Process of chips or innovating battery materials, Innovations in systems are what the world needs right now. This is extremely advantageous for China, which already has a complete industrial change, but for the United States, which has a hollow real economy and insufficient manufacturing capacity, its plan seems to be easier said than done. Statistically speaking, the U.S as a developed, auto market does have great potential for the evening market. But lets not forget the gap between the new car sales volume of the American Market in a year, and that of the Chinese market is roughly the same as the sales volume of the European market.
Even Market of the United States is not as attractive as one might think so. The Americans have resorted to such assertive tactics to bring back the manufacturing industry. The U.S did not come up with this plan on a whim but has been planning it since Obama administration for the past decades. Chinas position in the industrial chain has not been shaken on the country. Americas unilateral policy has become increasingly apparent, but doesnt. This prove that Chinas past two or four industrial chain is cracked and that our competitive advantage in the field of eBay has been globally recognized Music on Cutting Edge technology. The United States is indeed substantially ahead in several aspects, such as semiconductors and software, but it does not have a complete industrial change, since they thought they could move unprofitable, low, end Industries to the third world countries where they set at top reaping the profits. The U.S real economy has been hollowed out. However, it was not expected that this world order, created by the US itself would no longer develop in the direction they had envisioned after only 50 to 60 years. It is no less difficult for them to rebuild an Intel. Industrial chair, then it is for China to break through barriers in core Technologies. Ebay is just a typical example. In addition, Chinas breakthrough is inevitable. Well, the comeback of Americans manufacturing industry goes against Real progress.