According to reports from Agence France-Presse, Reuters and other foreign media on December 1, the U.S. government released proposed new rules on electric vehicle tax exemptions on the same day, explaining which electric vehicles are eligible for tax exemptions and imposing restrictions on electric vehicle manufacturers purchasing battery materials from China or other competitor countries.
According to the report, according to proposed guidance released by the U.S. Department of the Treasury and other departments on Friday (December 1), in order to strengthen the security of the U.S. supply chain, starting in 2024, electric vehicles eligible for exemptions shall not contain any battery components manufactured or assembled by a "foreign entity of concern (FEOC)", and starting in 2025, electric vehicles eligible for exemptions shall not contain any critical minerals extracted, processed or recycled by a FEOC.
The report claimed that the new rules are designed to implement relevant requirements in the US "Inflation Reduction Act". The bill's definition of FEOC includes all companies owned by or subject to the jurisdiction of countries such as China, Russia or Iran. A company may be considered a FEOC if it is incorporated in one of the above countries, or if the relevant country ownership reaches the 25% threshold.
Agence France-Presse said the issuance of the above guidelines comes as Washington is working to reduce its electric vehicle industry's dependence on China. According to a report by the European version of the US "Political News Network" on December 1, the media believes that the US government's latest action to "suppress China" may put Biden's own ambition to develop the electric vehicle industry at risk, because the new regulations may reduce the number of electric vehicles eligible for tax breaks and slow down the US auto industry's transition from fossil fuels to new energy.
US media said the new proposed rules will have a public comment period of several weeks to listen to feedback from auto industry leaders, and the new rules may be revised after receiving industry suggestions.
Since last year, the United States has successively introduced bills such as the Bipartisan Infrastructure Act, the Chip and Science Act, and the Inflation Reduction Act, all of which contain discriminatory electric vehicle subsidy provisions. The purpose is to stimulate the development of new energy vehicles in the United States and curb Chinese car companies. In August this year, Hong Yong, an expert at the 50-person China Digital and Real Integration Forum think tank, said in an interview with a reporter from the Global Times that China's leading position in the field of new energy vehicles may make some countries worry about losing their competitive advantages. Therefore, they may adopt protectionist measures to try to limit the share of Chinese new energy vehicles in their domestic markets. Hong Yong believes that the so-called "national security" is just an excuse to implement trade protectionism and use administrative means to artificially destroy the industrial chain. However, this kind of artificial interference with the market economy and violation of market laws may have the opposite effect, harming others and not benefiting oneself, and is not conducive to the long-term interests of the country's industrial development.