US loosens some electric vehicle battery rules, potentially making more EVs eligible for tax credits

The U.S. government has adjusted the regulations under the 2022 Inflation Reduction Act, making more electric vehicles (EVs) eligible for tax credits up to $7,500. This change, announced by the Treasury Department, relaxes some requirements on battery minerals and manufacturing locations, aiming to boost EV adoption to meet the Biden administration's goal of having half of all new vehicle sales be electric by 2030.

The updated rules now allow for small amounts of graphite and other minerals from untraceable sources to be exempt until 2027, facilitating more EVs to qualify for tax incentives in the coming years. This adjustment comes as part of efforts to develop a domestic EV supply chain and reduce reliance on battery components from countries deemed hostile, such as China and Russia. Despite these incentives, EV sales have seen a modest increase, underscoring challenges in the industry's transition to electric.