The Treasury and Energy departments on Friday proposed rules that would establish which electric vehicles will qualify for tax credits under new thresholds aimed to limit battery ingredients that are made in or sourced from adversaries like China.
The proposal falls short of a strict interpretation of last year’s climate spending law, which lawmakers such as Sen. Joe Manchin III, D-W.Va., have said is necessary to fight Chinese dominance of the battery market. The climate law seeks to wean the United States from relying on “foreign entities of concern,” which include companies owned by, controlled by or based in China, Russia, North Korea or Iran.
Biden administration officials said the tax credit has been key for boosting electric vehicle adoption. DOE Deputy Secretary Dave Turk noted on a call to reporters that EV sales reached 10 percent of new car sales last month, up from 6.7 percent at the same time last year.
