New US Treasury Rules on China-Made Batteries Could Increase EV Prices

Americans may soon have to contend with higher electric vehicle prices after the federal government announced new regulations designed to limit the nation’s reliance on Chinese electric vehicle batteries. According to the Biden administration, the proposed rules would cut government subsidies for electric cars with battery components made in China or companies with strong ties to the Chinese Communist Party (CCP).

While the rules will undoubtedly help the United States in its quest to cut China from critical supply chains, American drivers will have to pay the price. China is a major player in the global EV battery segment and produces most of the world’s EV battery metals. A 2023 International Energy Agency report notes that the Asian nation dominates nearly every stage of the electric vehicle battery supply chain.

This monopoly gives China unprecedented leverage in an increasingly critical industry. The CCP has repeatedly used this advantage and banned certain exports to the detriment of supply chains in nations that rely on Chinese exports. Now that the U.S. is going all in on electrification, the Biden administration is keen on building up domestic supply or partnering with companies from allied nations.

As per the administration’s recent announcement, electric vehicles containing Chinese-made components will not qualify for the full $7,500 U.S. tax credit starting January 2024. The announcement comes after the U.S. Department of Energy, U.S. Treasury and Internal Revenue Service passed guidelines prohibiting the use of vehicle parts built or assembled by foreign entities of concern (FEOC). Naturally, this includes China and companies with close ties to Beijing.

The Treasury also notes that starting in 2025, EVs containing critical minerals that were mined, processed or recycled by foreign entities of concern will not qualify for the full tax credit. However, Treasury officials said that they would exclude certain difficult-to-source minerals from the ban temporarily to give automakers enough time to find alternative sources.

With an estimated two-thirds of the world’s battery-cell production occurring in China, the new regulations could force carmakers to overhaul their supply chains completely. Since the U.S. is responsible for only 10% of global battery cell production and produces barely any EV battery metals, automakers will most likely turn to foreign supplies from nations with strong ties to the United States.

However, ramping up domestic production of battery metals such as rare earths and graphite will be key to fortifying America’s EV supply chain. This will call for significant investment in local industries, a feat that could finally rekindle America’s struggling manufacturing segment.

John Podesta, Biden’s senior advisor on clean-energy transition, says that the president is keen on reversing the trend of letting manufacturing jobs go to China and is working to ensure that the “electric vehicle future will be made in America.

Startups such as Fisker Inc. (NYSE: FSR) that are U.S.-based can take advantage of the ongoing onshoring of manufacturing to gain a bigger EV market share given that their models could enjoy a price advantage over those imported or made with China-sourced battery materials.

About GreenCarStocks

GreenCarStocks (“GCS”) is a specialized communications platform with a focus on electric vehicles (“EVs”) and the green energy sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, GCS is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, GCS brings its clients unparalleled recognition and brand awareness. GCS is where breaking news, insightful content and actionable information converge.

To receive SMS alerts from GreenCarStocks, text “Green” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit

Please see full terms of use and disclaimers on the GreenCarStocks website applicable to all content provided by GCS, wherever published or re-published:

Los Angeles, CA
310.299.1717 Office
[email protected]

GreenCarStocks is powered by IBN


Select A Month

Contact us: (310) 299-1717