Billions of dollars set aside in President Biden’s new spending and tax law would reward people who buy electric vehicles, but the tax credits are in jeopardy of never reaching drivers’ pockets.
To make their vehicles eligible for the tax credits of up to $7,500, automakers would have to make major changes to how they source and assemble their battery-powered cars and trucks. That’s because China, one of America’s chief competitors, has a stranglehold over roughly 80% of the production of the globe’s rare earth minerals that are critical in producing EV batteries.
Democratic lawmakers, green groups and the auto industry fear that stringent requirements for sourcing most battery materials from North America or free trade partners could render the credits useless over the next few years.