The Biden administration on Friday is expected to hand electric vehicle manufacturers a major concession in the form of a final tax credit rule that gives carmakers two additional years to rely on graphite from China, according to a person familiar with the plans.
The Treasury Department is anticipated to add the wiggle room to the tax credit rule — aimed at blocking China and other “foreign entities of concern” from EV supply chains — in response to warnings from electric vehicle makers about China’s vise grip on graphite production, said the person who was granted anonymity as they were not authorized to discuss an unfinished rule. POLITICO first reported on the administration’s expected move.
A spokesperson for Treasury declined to comment.
The rule Treasury has been working on will determine which electric vehicles are eligible for a tax credit worth up to $7,500, as laid out in the Inflation Reduction Act. That law was crafted to simultaneously encourage consumers to buy electric vehicles, while bolstering the production of raw materials and EV components here in the U.S. or in allied countries.
