U.S. delays ban on Chinese graphite for EV tax credits

WASHINGTON (Reuters) -- The U.S. Treasury Department on Friday gave automakers additional flexibility on battery mineral requirements for electric vehicle tax credits on some crucial trace minerals from China, such as graphite.

The department said it would give automakers until 2027 to remove some hard-to-trace minerals like graphite contained in anode materials and critical minerals contained in electrolyte salts, binders and additives.

New rules took effect on Jan. 1 restricting Chinese content in batteries eligible for EV tax credits of up to $7,500, which sharply cut the number of eligible vehicles. Automakers have since made changes to supply chains and won restored eligibility for many vehicles.

Treasury has temporarily exempted graphite and other trace critical minerals from new strict rules barring materials from China and other countries deemed a Foreign Entity of Concern (FEOC), including North Korea, Russia and Iran.

John Bozzella, who heads the Alliance for Automotive Innovation, a group representing major automakers, said the new Treasury rules "appear to recognize the realities of the global supply chain by providing some temporary flexibility in terms of where the critical minerals in EV batteries can be sourced."

Senate Energy Committee Chair Joe Manchin on Friday harshly criticized the decision, saying the administration has made clear it "will break the law in pursuit of their goal to flood the market with electric vehicles as quickly as possible." He said the Treasury has "provided a long-term pathway for these (FEOC) countries to remain in our supply chains."

The new rules, required under an August 2022 law, are designed to wean the U.S. EV battery chain away from China.

Abigail Hunter, executive director of