Fewer electric vehicles now qualify for consumer tax credits after the Biden administration on Monday began enforcing tougher rules on where vehicle batteries must originate.
At the beginning of this year, the administration allowed most domestically assembled electric vehicles to qualify for the credits. But to comply with the law, it is now enforcing additional rules about how much of the battery must originate in the United States or a country with which the U.S. has a free-trade agreement.
Those rules were designed to reduce U.S. reliance on materials made in China, which dominates the battery industry. They were crucial to winning the support of Sen. Joe Manchin III for the law. Manchin has repeatedly pushed the U.S. auto sector to reduce reliance on China.To qualify for the full credit, automakers must show that 40 percent of the value of the “critical minerals” in the battery originates in the United States or a country with which it has a free-trade agreement.
General Motors did particularly well under the new rules, with all of its EV models, including the Chevy Bolt and Bolt EUV, qualifying for the full credit. In a statement, the company said this was “made possible by GM’s historic investments in the U.S. to transform our portfolio, strengthen American manufacturing and jobs, and localize and build more secure and resilient supply chains.”
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