Assessing the effects of the Inflation Reduction Act of 2022 of the United States of America on international car manufacturers using Volkswagen as an example
DOI:
https://doi.org/10.25312/2391-5129.37/2023_02FGMFKeywords:
Inflation Reduction Act, international car manufacturers, Volkswagen, case studyAbstract
The Inflation Reduction Act, passed by the U.S. Congress in 2022, is a major climate change investment plan that allocates nearly half a trillion dollars for climate initiatives and health care. A key aspect of the Inflation Reduction Act is subsidizing electric vehicles based on certain criteria that call for national production in particular. Only nine automakers, including one international one, namely Volkswagen, made it onto the list of carmakers approved for the subsidy. The exclusion of foreign manufacturers caused controversy. Volkswagen’s inclusion gave it a massive competitive advantage. This case study examines the impact of the Inflation Reduction Act on international business related to the automotive industry, specifically Volkswagen, using a SWOT analysis. The eligibility criteria for electric vehicle subsidies are analyzed, showing the focus on U.S. production and components. The SWOT analysis examines Volkswagen’s strengths, weaknesses, opportunities, and threats considering the IRA.
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