The US Treasury announced further guidance last Friday surrounding the exact terms of the Inflation Reduction Act’s (IRA) electric vehicle subsidies, including how much Chinese participation is allowed in the production of EV batteries for OEMs to qualify for full subsidy under the IRA’s $7,500 EV tax credit. From 2024, EVs which contain battery components manufactured or assembled by a “foreign entity of concern (FEOC)” will be entirely ineligible for the whole $7,500 subsidy. The effect of this may be limited by a government-proposed transition rule which will delay the tracing of battery components, delaying the effects of this rule by another two years into 2026. After the moratorium, battery companies and automotive OEMs will have to abide by provenance…