"The US EV Industry Now Faces A Choice: Tax Credits Or Chinese Batteries"

"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."

Jeff St. John reports for Canary Media December 6, 2023.

Source: Canary Media, 12/07/2023