The U.S. government has made a significant decision to extend tax credits for electric vehicles (EV) containing Chinese graphite until the end of 2026. This move comes in response to demands from EV manufacturers who rely on these components for their vehicles.
The Treasury Department announced the final rules on the clean energy vehicle provisions of the Inflation Reduction Act (IRA) on the Federal Register. The temporary exemption of graphite from rules on the use of minerals from “foreign entities of concern” will allow EV manufacturers to continue benefiting from tax credits up to $7,500 for qualifying vehicles assembled in North America.
The decision is seen as a strategic move to reshape EV supply chains away from China amidst growing tensions between the U.S. and China. This development could potentially impact the South Korean EV industry, which heavily relies on China’s supply chains for graphite and other essential components.
Seoul’s Industry Minister, Ahn Duk-geun, expressed satisfaction with the decision, highlighting the efforts made by the ministry to advocate for South Korean companies’ interests, including resolving the graphite issue. The government has been actively engaging with U.S. officials since the IRA was enacted in August 2022, emphasizing the importance of maximizing benefits for South Korean companies in the evolving EV market landscape.
