The US Treasury Department could issue clarification on federal electric vehicle tax credit eligibility rules as early as Friday, according to reports Traffic theme.
Citing anonymous sources familiar with the matter, the report asserts that the federal government is ready to issue regulations related to the “foreign entities of concern” requirement. Specifically, vehicles with battery components or critical minerals from companies controlled by certain U.S.-controlled countries with which they do not have friendly trade relations will not be eligible for federal tax credits worth price 7,500 USD. This remains at “Suggested instructions” phase, but the Biden administration appears ready to formalize it.
As Green Car Reports has previously pointed out, the proposed rules suggest that products from some automakers preparing to produce electric vehicles in the US—like Volvo and Polestar—may not qualify because they are owned and controlled by China.
Volvo EX90 2025
Some proposals have considered establishing a specific threshold for traceable battery minerals, to quantify the amount of material from countries with which the United States does not have free trade agreements, Forbes report. But these could still limit the number of vehicles eligible for federal tax credits.
Just this year, new battery supply requirements pushed some electric vehicles off the eligible vehicle list—some temporarily. For example, General Motors had to do it at the last minute sourcing changes in its Ultium EVs.
Most electric cars are sold in the US has American-made batteries—but there are certainly some notable exceptions like the North American-built Ford Mustang Mach-E. But if the United States opts for a particularly strict and narrow interpretation of the rules, there will likely be greater and renewed attention. recycle EV batteries.
BYD seal
In 2023, the US assuaged the concerns of another group of countries with a trade agreement that guaranteed Japan, Korea and the European Union that battery components from these trading partners will be included in the tax credit eligibility.
Ultimately, the interpretation of the rules will likely determine how and when China’s electric vehicle construction giant reaches the US market. China now faces a glut EV and EV battery manufacturing facility.
