Various models will lose eligibility for $7,500 tax credit
China rejects Biden's new rules on electric vehicle tax credits Not all countries support the Joe Biden administration's new rules on the Inflation Reduction Act. The last entity to oppose the new rules was China.
The amendments add new, stricter rules for battery materials, making things much more difficult for electric vehicle manufacturers. This forced China to make a statement about foul play on the part of the United States.
Essentially, the Biden administration's amendments would disqualify tax credits for electric vehicle purchases if more than a small amount of battery materials come from countries deemed to be «foreign enterprise of concern» (FEOC). This could mean North Korea, Russia, Iran, and now China.
In 2024, off-the-shelf batteries made from FEOC components will render the vehicle ineligible, and by 2025, EVs with battery minerals beyond certain amounts coming from FEOC will also not qualify. Some Tesla Model 3s will not be eligible for the full tax credit next year.
China said the policy was contrary to World Trade Organization (WTO) rules and that it constituted a «typical non-market policy». China also argues that other WTO members have expressed concerns about the policy, agreeing that it violates core WTO principles. China believes that such policies could seriously hamper and disrupt international trade and investment.