No Chinese automakers are taking advantage of the Inflation Reduction Act's tax credit for new electric vehicle purchases, according to Deputy Treasury Secretary Wally Adeyemo who spoke at a Senate panel.

"What we see to date is that the companies that are taking advantage of it are American companies who are using it to make the investments that they need to be able to build out the cars of the future, which are electric vehicles," Adeyemo said at a hearing on federal EV incentives held by the Senate Committee on Energy and Natural Resources.

The remarks come after the Treasury and Energy departments in December issued vital guidance for automakers on how strictly the Biden administration will enforce a provision that blocks tax credits for new EVs that contain battery materials from foreign adversaries such as China.

All of this double speak. What does it really mean? How many vehicles does that leave with electric vehicle tax credits even less than today’s 13 cars that qualify.

Even so, the strict requirements have slashed the number of qualifying models to just 13 from 25, according to federal data from FuelEconomy.GOV. However, some automakers such as General Motors have said they expect more EVs will qualify as they adjust sourcing.

The government has faced harsh criticism for its implementation of the EV tax credits, namely from Republicans — none of whom supported the Inflation Reduction Act — and Senator Joe Manchin, Democrat from West Virginia, who held the key vote in passing the law and helped write it.

At issue, in part, is the Treasury's foreign entity guidance, which includes a temporary transition rule through 2026 that gives the industry time to develop standards for tracing materials that account for less than 2 percent of the value of battery-critical minerals.

The current rules allow Chinese companies to get the tax break. It loosens up the restrictions, so now we are subsidizing our rivals.

So don’t be surprised if in the near future, you see a lot of Chinese cars being available to the US with the federal tax credit. Because that’s the way the legislation was written. It certainly not in consumer favors. Nor is it in the favor of any car makers, except for the Chinese.

Thanks for watching!

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00:00 Truth About #Chinese Automakers and #EV #Tax Credits
01:48 what does this mean
02:29 What cars qualify in 2024
05:28 Chinese cars are coming

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