‘Discriminatory’ EV tax credit could bring Mexico-imposed tariffs

The $12,500 electric vehicle tax credit proposed in President Joe Biden’s “Build Back Better” plan is being labeled as “discriminatory” by Mexican Economy Minister Tatiana Clouthier, who said the country is analyzing legal recourse and other actions, including potential tariffs against the United States.

Clouthier claims the EV tax credit is “totally contrary to free trade,” especially as the rebate includes additional funds for consumers if the vehicle is built in the United States and equips a U.S.-produced EV battery. The terms of the tax rebate, which favor U.S.-based manufacturing efforts, is detrimental to the country’s automotive exports, Clouthier argues. On Thursday, she said, “the effect on our auto exports would have a very large impact on this sector that creates a lot of jobs … and could even generate additional migratory pressures.”

The United States has used an EV rebate for years in the amount of $7,500. This credit applies to any electric vehicle that is manufactured by a company that has sold less than 200,000 units, meaning Tesla and GM vehicles do not qualify for the rebate. The primary differences between the old credit and the new one are the amount of the rebate, its potential to be “refundable,” and the positive effects it could have on American manufacturing.

It seems that Clouthier is not in favor of taking large-scale recourse on international trade, especially as global supply chain issues continue to plague the automotive industry. She stated that it was “not a desirable” course of action, but stated that Mexico will do anything in its power to support its automotive industry. Reuters says Mexico’s automotive sector employs around one million people.

It is not the first time entities have spoken up regarding their discontent with the new EV incentives. In October, the European Union, Germany, Canada, Japan, Mexico, France, South Korea, Italy, Poland, Sweden, Spain, Austria, Netherlands, Belgium, Cyprus, Ireland, Malta, Finland, Romania, and Greece argued to U.S. lawmakers that the tax credit violated federal trade rules by “limiting eligibility for the credit to vehicles based on their U.S. domestic assembly and local content.” The countries also stated the credit “is inconsistent with U.S. commitments made under WTO multilateral agreements.”

The Tax Credit was passed within the “Build Back Better” plan was passed by the House of Representatives in November. It moves to the Senate next.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at

Joey Klender

Transportation Writer | Penn State Alum | Future World Series of Poker Bracelet Holder 🚀 🛰 ☀️ 🚘 🧠 🕳

Disqus Comments Loading...
Published by

Recent Posts

Interest in EV rental cars like Teslas has more than doubled: report

As people searched for rental vehicles for summer road trips, the interest in "eco-friendly"-tagged vehicles…

1 hour ago

Nonprofit calls out Tesla for not disclosing enough environmental data

CDP, a global nonprofit that runs an environmental disclosure system for companies, cities, states, and…

2 hours ago

Tesla’s executives are helping vehicle deliveries as Q2 2022 comes to a close

With Tesla closing its second quarter, it is no surprise that some of the company's…

3 hours ago

Tesla analysts adjust delivery forecasts amid Q2 headwinds

Tesla analysts have adjusted their global delivery analysts, considering the headwinds the EV manufacturer faced…

4 hours ago

Elon Musk’s Twitter absence is messing with mainstream media

Elon Musk has not tweeted for over a week, and it is becoming very noticeable.…

4 hours ago

Tesla tracking employee attendance after return to office order

Tesla employees shared that the company has been tracking their attendance since Elon Musk issued…

8 hours ago