According to foreign media reports, in recent years the United States in the construction of chips, electric vehicles and battery factories, including tax credits, cash subsidies and other incentives provided to manufacturers to attract relevant manufacturers to invest in the construction of factories.
LG New Energy, which has decided to invest 7.2 trillion won, or about 5.5 billion U.S. dollars in the construction of a lithium iron phosphate battery factory in Arizona, can also receive relevant subsidies from the United States.
However, judging from the latest reports, LG New Energy is currently considering accepting cash subsidies from the United States instead of tax credits.
Sources revealed that LG New Energy is currently said to be studying whether it will receive cash subsidies under relevant US programs and whether there will be accounting issues.
Foreign media mentioned in the report that according to the new subsidy program launched by the United States, manufacturers eligible for subsidies can choose between tax credits and cash.
In the two subsidy methods, the cash subsidy will be included in the operating profit, which can significantly improve future performance; although the tax credit can directly offset the tax, it has certain limitations and is only applicable to the corporate tax linked to the net profit. The tax rate is 21%, and if the net profit is small, the gains will be more than they actually need to pay in taxes.
In terms of batteries, manufacturers such as LG New Energy can receive a cash subsidy of US$35 for each 1kWh battery cell produced, and a 1kWh battery module can receive a cash subsidy of US$45.