ANALYSIS | Remember that electric-vehicle spat with the U.S.? The Europeans are still steaming | CBC News

Dec 02, 2022

For Canada, it's the old irritant that cooled off months ago.

At issue is the unprecedented sums Washington has pumped into clean-energy production under the new Inflation Reduction Act, lavishing hundreds of billions to turbocharge the transition to zero-emissions technology.

It granted preferential treatment to all North American vehicles. .

There hasn't been another stretch like that, even a 10-year stretch like that, in the history of the Canadian auto sector," said Flavio Volpe, head of Canada's auto-parts lobby. .

Canada and Mexico, he said, are the only two jurisdictions inside the U.S.

That's because only North American-made cars are eligible for the full $7,500 tax credit; U.S.

WATCH | Canada relieved by changes to U.S.

"Put yourself in my shoes," Macron said on Capitol Hill.

"Nobody contacted me when the [Inflation Reduction Act] was being discussed." .

"Let's not kid ourselves: There's a risk here," Macron said, speaking in French.

It's way too early to assess the international impact of the Inflation Reduction Act, said one prominent auto-industry analyst.

"All the devil in the details is happening right now [with the writing of those regulations]," said Kristin Dziczek, an auto-industry analyst at the U.S.

She also cautioned that certain parts of the Inflation Reduction Act might also hurt Canada: for example, there's a credit for companies building clean-energy projects, worth an estimated $31 billion over a decade, and it goes only to U.S.

She said that could be worth thousands per vehicle and pull investments from other countries, including Canada and Mexico: "That's difficult to compete with.".

They say it's possible no cars will benefit from the credit, at least not for now; they say it requires North American battery content that simply doesn't exist yet.

Still, Volpe said, there's a bigger-picture story here. .

law, that if they build cars in Canada and Mexico, they will qualify for consumer credits in the colossal U.S.

If you're going to make a bet, as a carmaker, Volpe said, you're going to bet that preferential treatment for North American cars will last.

Volpe said it's simply easier to build near raw materials