Seoul has requested that the United States defer the application of the Inflation Reduction Act(IRA) for three years and adjust the definition of “final assembly” for electric vehicles(EV).

The trade ministry sent a letter to Washington requesting that terms stated in the IRA related to tax subsidies for EV purchases be postponed by three years for companies that are set to make manufacturing investments in the U.S.

The ministry also proposed that the U.S. adopt a more comprehensive interpretation of the Act, that will include cars that are partially assembled in North America.

The IRA grants tax subsidies to buyers of EVs assembled only in North America, putting South Korean carmakers at a disadvantage, while also requiring that a certain percentage of minerals used in batteries be mined or processed in countries with a free trade agreement with the U.S.

The U.S. Treasury Department has been gathering opinions since early October as part of efforts to draft sub-regulations for the IRA.

Ahead of the submitted input, the trade ministry noted that minister Ahn Duk-geun held virtual talks on the issue with the White House adviser for clean energy innovation, John Podesta, on Thursday evening.