When the U.S. government temporarily loosened regulation last week that curbs electric-vehicle battery materials sourced from China and other countries, a debate ensued about the wisdom of the move.
The Alliance for Automotive Innovation praised the delay, saying it will take more time to increase domestic production of the materials.
“The EV transition requires nothing short of a complete transformation of the U.S. industrial base. That’s a monumental task that won’t – and can’t – happen overnight,” said alliance President John Bozzella in a press release.
“This updated guidance from the Treasury Department is something we recommended. It makes good sense for investment, job creation and consumer EV adoption.”
Meanwhile, U.S. mining industry advocates criticized the enforcement delay, saying it gives China an edge.
“Congress created these tax incentives to secure our supply chains and generate American jobs while supporting EV adoption; they did not intend for loopholes to be created that essentially amount to a blank check from the American Taxpayer to China,” said National Mining Association President and CEO Rich Nolan.
The treasury department delayed enforcement of the battery-sourcing restrictions until 2027, giving automakers more time to reach compliance and opening more models to federal tax credits tied to the restrictions.
“The Treasury rules appear to recognize the realities of the global supply chain by providing some temporary flexibility in terms of where the critical minerals in EV batteries can be sourced,” Bozzella said. “That’s helpful as more automotive supply chains and battery production is localized to the U.S. and our allies.”
The alliance says 13 models for sale in the U.S. qualify for the full $7,500 tax credit.
