US Aims to Cut China Out of Electric Vehicle Supply Chain

The U.S. government is paving a way forward to exclude communist China from the U.S. electric vehicle (EV) supply chain.

According to the proposed guidance on clean energy vehicle provisions of the Inflation Reduction Act, released on Dec. 1 by the U.S. Department of the Treasury and Internal Revenue Service, consumers can take a tax credit of up to $7,500 for purchasing a clean energy vehicle.

But the new guidelines clarify that starting in 2024, clean energy vehicles will not be eligible if they contain any battery components manufactured or assembled by a foreign entity of concern (FEOC), either from China, Russia, North Korea, or Iran. Beginning in 2025, clean energy vehicles will not be eligible if they contain any critical minerals mined, processed, or recovered by an FEOC.

These provisions are expected to gear toward “lowering costs for consumers, spurring a boom in U.S. manufacturing, and strengthening energy security by building resilient supply chains with allies and partners,” said the U.S. Department of the Treasury.

The act will be subject to a public comment period of several weeks and will ultimately take effect on Jan. 1 of next year.

Read Full Article Here