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The head of the main US business lobby for Southeast Asia has said that EV tax credits should be extended to Vietnam.

Tedd Osius, who heads up the US-ASEAN Business Council, said that VinFast, which has started building its $4 billion EV plant in North Carolina, could struggle to compete without the tax break.

The Inflation Reduction Act (IRA) wants to reduce US dependence on China. IRA rules currently benefit countries that have free trade agreements with the US, however Vietnam is not on the list.

Tax credits ($7,500) are given on EVs bought in the US, provided that the critical minerals that go into make the batteries are sourced from the US or a free trade partner.

Last year VinFast announced it had received $1.2 billion incentives package from the state of North Carolina and was the first automaker to locate in the state.

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By GlobalData

Following the news of VinFast building its EV plant in the US, President Joe Biden released a statement: “Our efforts to build a clean energy economy are driving companies to make more in America.”

 On social media, VinFast thanked the president for the “amazing recognition”.