An about-face in U.S. policy means electric vehicles made in Canada will now qualify for hefty consumer tax credits when sold in the United States, a provision in a proposal that is being lauded by auto industry executives on this side of the border.

The European Union expressed concern Thursday that a new U.S. tax credit plan aimed at encouraging Americans to buy electric vehicles would discriminate against European producers and break World Trade Organization rules.

A U.S. tax credit of up to $7,500 (all figures in USD) could be used to defray the cost of an electric vehicle under the Inflation Reduction Act now moving toward final approval in Congress. But the auto industry is warning that the vast majority of EV purchases won't qualify for a tax credit that large.

Plans to expand a proposed U.S tax credit on electric vehicle purchases to cover North American-made cars is a boon for the auto sector, says Ontario's economic development minister, but the province isn't planning any buyer incentives for local drivers.