U.S. Loosens Electric Vehicle Tax Credit Rules, Critics Accuse Biden Administration of Helping China

The U.S. government has made changes to electric vehicle tax credits, potentially allowing more EVs to qualify for credits of up to $7,500. However, critics are accusing the Biden administration of aiding China through these changes.

The Treasury Department announced final regulations for the credits under the 2022 Inflation Reduction Act, giving automakers more flexibility in complying with certain provisions regarding battery minerals. The credits range from $3,750 to $7,500 for new EVs, with a $4,000 credit available for used ones.

These credits are aimed at boosting demand for EVs as part of the Biden administration’s goal to have half of all new vehicle sales be electric by 2030. Qualifying for the credits depends on various factors, including income, vehicle price, and requirements related to battery makeup and minerals.

Critics, including the National Mining Association, have slammed the new exemptions in the rules, calling them a giveaway to China. West Virginia Sen. Joe Manchin has also criticized the Biden administration for endorsing ‘made in China’ through these changes.

Despite the tax credits, sales of electric vehicles have only grown by 3.3% in the first quarter of this year, raising concerns among automakers. The rule change is expected to make more EVs eligible for credits in the coming years, but the auto industry says it will take time to trace the origin of all minerals.

Overall, the changes to electric vehicle tax credits have sparked controversy and debate, highlighting the challenges and complexities of transitioning to a more sustainable transportation system.