US House approves legislation to restrict tax credits for EVs using Chinese battery technology

White House opposes bill, saying it would ‘raise taxes on American consumers, punish American auto manufacturers [and] threaten good-paying auto jobs’

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A CATL “Shenxing Plus” battery at a trade fair in Xiamen, Fujian province, on Tuesday. The US House has passed a bill to restrict tax credits for any EV using Chinese battery technology. Photo: Xinhua

Published: 5:26am, 13 Sep 2024Updated: 9:56am, 27 Sep 2024

The US House of Representatives passed a Republican bill restricting electric vehicle tax credits on Thursday that could jeopardise licensing deals between American car makers and Chinese EV battery companies.

The bill, which is opposed by the White House, was passed as the last act of China Week, a House Republican-led effort to advance China-related legislation. About two dozen such bills, including some sharply divisive ones, have cleared the chamber since Monday.

All legislation that passes the House must also clear the full Democrat-led Senate before it can be sent to the president’s desk to be signed into law.

Sponsored by Representative Carol Miller of West Virginia, the End Chinese Dominance of Electric Vehicles in America Act of 2024 would restrict EV tax credits from cars using battery technology licensed from China if the licensing deal is more than US$5 million.

The bill passed 217-192, largely along partisan lines, with only seven Democrats supporting it.

Consumer EVs using batteries made in China are already prohibited from receiving tax credits from the Inflation Reduction Act (IRA), US President Joe Biden’s signature 2022 climate legislation.