Finance Associated Press, December 4 (edited by Xia Junxiong).On December 1, local time, the United States issued new regulations on subsidies for electric vehicles, and Chinese battery manufacturers and other new energy vehicle chain companies will be excluded from the beneficiary groups of the "Inflation Reduction Act" tax credit.
The Inflation Reduction Act provides for a tax credit of up to $7,500 if a certain percentage of critical battery minerals in EVs purchased in the U.S. are sourced from the U.S. or its free** partners.
However, electric vehicles containing battery components manufactured or assembled by so-called "Foreign Entities of Concern" (FEOCs) will not be eligible for the tax credit starting in 2024, according to interim guidance published by the U.S. Treasury and Department of Energy on December 1. In addition, from 2025 onwards, vehicles cannot contain critical minerals extracted, **or ** extracted by FEOC, including lithium, cobalt and nickel, among others.
According to U.S.** documents, the FEOC targets companies in China, Russia, North Korea and Iran. A company or group will be classified as a FEOC if it is incorporated in these countries, or if its state-owned portion reaches the 25% threshold.
The proposed new regulations have a public comment period to hear feedback from the automotive industry before they are finalized.
The U.S. is working to reduce its EV industry's dependence on China. However, most analysts believe that the United States' suppression of China's new energy industry chain will eventually drag down the pace of its own energy transition.
According to the data, Chinese companies occupy more than half of the global market share of electric vehicle batteries, and occupy 90% of the market share in the first aspect of some battery materials.
Sam Abu Samid, an analyst at Guidehouse Insights, a US energy consultancy, warned that many electric vehicles that currently receive tax credits will be disqualified when the new rules come into effect next year.
It is worth mentioning that many of the previous requirements of the Inflation Reduction Act have made a large number of new energy vehicles ineligible for tax credits. According to statistics, only about 20 out of every 100 vehicles sold in the United States are now ready to be assembled in North America.
The Chinese Embassy in the United States criticized the rules, calling them another example of U.S. unilateralism and economic bullying, according to Reference News. This will be detrimental to the stability and recovery of the global economy, nor will it be conducive to the joint response of all countries to the challenge of climate change.