The law changed the federal tax credit system for the purchase of new EVs. Previously, the tax credit was based on the capacity of the battery; now, it is based on where the car and battery are assembled and the origin of the mineral raw materials for the battery. To qualify for the incentive, final assembly must occur in North America and the majority of the battery must be manufactured in North America or from free trade partners in the United States.
Adding to Chinese automakers’ concerns is a U.S. law that bans tax subsidies on cars from companies with ties to “foreign entities of concern,” including China.
Source: Ferra
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