How to make EVs without China’s supply chain

Two thrilling moves in recent weeks have the potential to ignite the demand for electric vehicles in the United States. First, Congress passed the Inflation Reduction Act, expanding federal tax rebates for electric vehicle purchases. So California passed rules to ban the sale of new gasoline cars by 2035.

The Inflation Reduction Act extends the Obama-era EV tax credit up to $ 7,500. But it does include some lofty obstacles. Its country of origin rules require electric vehicles – and an increasing percentage of their critical components and minerals – to come from the United States or from countries that have free trade agreements with the United States.

The law expressly prohibits tax credits for vehicles with critical components or minerals from “foreign entities of interest”, such as China or Russia.

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