US exploring strategies to include Europe in electric car tax breaks

The Biden administration is reportedly considering allowing European countries to share in billions of dollars in U.S. tax incentives for electric cars if a trade deal is reached in coming weeks, a senior official said on Friday, according to Politico.

The Treasury Department is expected to release the incentives next week and ongoing discussions have been happening between the United States and the European Union, a source told Politico. 

The vehicles would be made in North America.

This initiative stems from one of President Biden's goals which is to combat climate change and encourage carbon-free energy usage. 

The Treasury guidance on the tax incentives will go into further detail on how the agency will propose to weigh the extraction and processing of minerals used in electric vehicles and their components.

The initial version will exclude minerals extracted and processed in the European Union, the official told Politico.

If the U.S. and the EU come to a deal in the coming weeks, it is possible the EU could get a free-trade partner status.

As of now, the U.S. and EU do not have such an agreement.