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The fine print on Biden’s EV tax credits

Uncle Sam has revealed the fine print on his EV sale prices, and the reaction is rippling through the auto supply chain.

After a 15-month wait, the U.S. Treasury Department finally revealed how it will decide which EV purchases qualify for up to US$7,500 in tax credits in 2024 under the Inflation Reduction Act. 

The auto industry got some key definitions on Friday that will likely whittle how many EVs qualify for the full incentives. The credit will exclude vehicle content from China-based firms, including U.S. subsidiaries, and companies that count Chinese state entities or senior officials as at least a quarter of their backers. 

It marks the most formal push yet for automakers to buy battery parts outside China. That could benefit Canada as it tries to build out smaller “midstream” firms that turn critical minerals into battery parts.

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