The Biden administration has eased restrictions for its electric vehicle tax credit, giving automakers more time to adjust to sourcing requirements meant to reduce reliance on China for materials.
The Treasury Department announced Friday that it has finalized rules for a tax credit that serves to encourage sales of electric vehicles while taking aim at foreign entities of concern, such as China, Russia, North Korea, and Iran, and their grip on critical minerals and EV battery components.
https://www.washingtonexaminer.com/policy/energy-and-environment/2989672/treasury-eases-finalized-electric-vehicle-tax-credit-allow-chinese-graphite/But the rule determining which EVs are eligible for the tax credit exempts compliance with the restrictions for “certain impracticable-to-trace” battery materials — particularly graphite, the main component in a lithium-ion battery anode, and whose supply chain is heavily dominated by China — until 2027, giving automakers two more years than in the previous proposal.
The new rule also differs from the previous proposal through its adoption of a more stringent method of determining the percentage of materials that are compliant with the foreign entity of concern requirements. Auto manufacturers, however, are allowed to use a less strict process up until 2027, which would require a close look at the locations of where 50% or more of the critical minerals were extracted and processed.
“Today’s actions from Treasury and DOE provide clarity and certainty to an EV marketplace that’s rapidly growing,” John Podesta, senior White House climate adviser, said in a written statement. “The direction we’re headed is clear — toward a future where many more Americans drive an EV or a plug-in hybrid and where those vehicles are affordable and made here in America.”
