"Long-awaited rules from the Biden admin could make all EVs ineligible for the $7,500 customer tax credit — unless the industry can source key supplies beyond China."
"Last week, the Biden administration released long-awaited proposed guidance for how it plans to enforce one of the most complex and controversial aspects of the electric vehicle incentives created by the Inflation Reduction Act: the requirement that the country’s fast-growing EV and battery industries avoid using materials supplied by China, a geopolitical rival that has so far dominated clean energy manufacturing.
Now, the companies that have spent more than $100 billion establishing U.S.-based EV and battery factories since the law was passed last year are striving to adapt to the coming restrictions — and confronting the reality that, under the proposed rules, virtually none of the EVs they are currently manufacturing will still be eligible for the law’s $7,500 federal tax credit as of 2025.
Under the proposed guidance from the U.S. Treasury Department, electric vehicles containing any battery component “manufactured or assembled by a foreign entity of concern” will no longer be eligible for the tax credit starting next year. In 2025, electric vehicles that “contain any critical minerals that were extracted, processed, or recycled” by a foreign entity of concern will no longer be eligible for the credit."
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