DETROIT — The U.S. government on Friday loosened some rules governing electric vehicle tax credits, potentially making more EVs eligible for credits of up to $7,500 but leading critics to accuse the Biden administration of helping China.
Starting this year, complex rules are being phased in to promote development of a domestic electric vehicle supply chain. The rules would limit EV buyers from claiming the full tax credit if they purchase cars containing battery materials from China and other nations “of concern” that are considered hostile to the United States. Those include Russia, North Korea and Iran.
Manchin, who played a key role in passage of the Inflation Reduction Act, President Joe Biden’s landmark climate law, said the law specifically prohibits EVs that contain materials from foreign adversaries such as China and Russia from being eligible for the tax credit after 2024. “But now Treasury has provided a long-term pathway for these countries to remain in our supply chains. It’s outrageous and illegal,″ he said.
The rule issued Friday is likely to make more EVs eligible for credits in 2025 and 2026, but the auto industry says that's difficult to tell until automakers finish tracing the origin of all the minerals.
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