New US rules, aimed at curbing China, could make it harder for EV buyers to claim a full tax credit
Americans could have a harder time finding electric vehicles that qualify for a full $7,500 federal tax credit under new rules being proposed
WASHINGTON — Americans could have a harder time finding electric vehicles that qualify for a full $7,500 federal tax credit under new rules proposed Friday that are likely to hinder President Joe Biden’s goal that half of new passenger vehicles sold in the U.S. run on electricity by 2030.
Plans outlined by the departments of Treasury and Energy would limit EV buyers from claiming the full tax credit if they purchase cars containing battery materials from China and other countries that are considered hostile to the United States.
The new rules, required under Biden’s signature climate law approved last year, are likely to slow consumer acceptance of electric vehicles just as Biden is trying to ramp up sales to help meet his goal to cut planet-warming greenhouse gas emissions in half by 2030. EV sales have tripled since Biden took office, but the U.S. still depends on foreign sources, especially China, for many of critical minerals needed to produce EV batteries.
It’s still not clear which vehicles would be eligible for the full $7,500 tax credit under the new plan because the Biden administration has yet to publish any lists.
Congress included language in the Inflation Reduction Act that bars electric cars from qualifying for the full tax break if critical minerals or other battery components were made by a “foreign entity of concern.” The law defines that as any company that is owned by, controlled by or subject to the jurisdiction of North Korea, China, Russia or Iran, although the main target is China.
Administration officials said the auto industry has long been aware of the
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