EVs with Chinese parts won’t qualify for the full $7,500 tax credit from 2024
The US government has released guidance that will make it harder for EVs to qualify for the full $7,500 tax credit if their batteries contain Chinese components or minerals.
New guidance for EV tax credits
A couple of days ago, Electrek reported that the US government was reportedly discussing granting automakers a temporary reprieve from the proposed restrictions on EVs containing Chinese battery parts or minerals – but that did not materialize.
The Treasury Department and the Internal Revenue Service stated today on its website:
Under the excluded entity restriction, vehicles are not eligible for the clean vehicle credit if the battery contains battery components manufactured or assembled or applicable critical minerals extracted, processed, or recycled by a foreign entity of concern (FEOC).
Plus, automakers and battery and component makers will now have more clarity. Or as John DeMaio, CEO of graphite distributor Graphex Technologies, told Electrek:
Now, with parameters clear, the industry can devote its full attention to scaling a diversified supply of EV battery minerals (both from North America and around the globe) and expanding much-needed domestic battery mineral processing capacity. This announcement will catalyze much-needed investment in the domestic (and “friend-shored”) capability that we at Graphex have been advocating for years, since before the IRA even passed.
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