U.S. Treasury unveils new EV tax credit rules

Tesla

Reuters has reported that the U.S. Treasury Department has unveiled new electric vehicle tax rules reducing tax credits on some zero-emission models.

The new rules are designed to help make the U.S. less dependent on China for EV battery supply chains, Reuters reported. New critical mineral and battery component sourcing guidance takes effect for vehicle purchases starting April 18.

According to the Inflation Reduction Act (IRA), signed by President Biden in August, 50% of the value of battery components must be produced or assembled in North America to qualify for a $3,750 credit. In addition, 40% of the value of critical minerals must be sourced from the U.S. or a free trade partner for a $3,750 credit.