The US House of Representatives narrowly approved a bill to tighten rules restricting Chinese content in vehicles eligible for US electric vehicle tax credits, with a vote of 217 to 192. The automotive industry, represented by the Alliance for Automotive Innovation, has raised concerns about the bill, saying it would result in fewer vehicles qualifying for the credits and potentially impact emissions and EV targets.
The bill, sponsored by Representative Carol Miller, aims to prevent Chinese companies from benefiting from tax credits meant for US manufacturers. It is part of efforts to reduce US reliance on Chinese components in the electric vehicle supply chain. Currently, only 22 out of 113 EV models for sale in the US qualify for the full $7,500 credit.
The industry is warning that eliminating these incentives could have negative economic and national security consequences, making the US less competitive in the global market. The US Treasury recently granted automakers flexibility on battery mineral requirements for the tax credits, allowing until 2027 to remove certain minerals sourced from China.
The bill has not yet been taken up by the US Senate, and both the US Treasury and the Chinese Embassy in Washington have not commented on the legislation. The outcome of this bill and its potential impact on the automotive industry and consumers remains to be seen as it moves through the legislative process.
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