EVs from China may lose tax credits

New rules from the Treasury Department will make it harder for vehicles to qualify for the full federal electric vehicle tax credit of $7,500 if key components are sourced from China. But the rules also offered a two-year reprieve on some materials that are mostly sourced from China. Late last week Treasury released on some materials that are mostly sourced from China. Late last week Treasury released new rules mandating that manufacturers not use critical materials that originate from a Foreign Entity of Concern (FEOC) — including China, Russia, North Korea, or Iran — by 2025 if they want to receive the full EV tax credit. The federal government, however, is giving automakers some important leeway in sourcing some rarer materials, like graphite. "The final regulations also identify certain impracticable-to-trace battery materials," the Treasury said, adding that "qualified manufacturers may temporarily exclude these battery materials from FEOC due diligence and FEOC compliance determinations until 2027."