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US Climate Law Focus on Breaking China’s EV Supply Chain – SCMP

The climate law passed by the US aims to localize the manufacturing of EVs but “adds a steep requirement aimed at weeding out ‘foreign entities of concern’ from supply chains”, it says.


The climate law passed by the US Lower House on Friday aims to localize the manufacturing of electric vehicles (EVs) with incentives directed at carmakers and buyers, although the industry is “heavily reliant on components linked to China”, according to an August 12 report by the South China Morning Post, which noted that the law “adds a steep requirement aimed at weeding out ‘foreign entity(ies) of concern’ from supply chains”.

The law offers large tax credits for buyers of new or used EVs, but says at least 40% of ‘critical minerals’ like cobalt, lithium, graphite and nickel must be “extracted and processed” in North America or countries that have signed free-trade deals with the US, and not from a ‘foreign entity of concern’, the report said, adding that 70% of “EVs currently in the US would be ineligible”. It noted that by 2026, 80% of components should be assembled or sourced domestically or in a friendly country, under the law, and by 2029 that figure should be 100%.

Read the full report: South China Morning Post.




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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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