Proposed U.S. Rule for Electric Vehicles Could Shut Out Australia’s Critical Minerals

Proposed U.S. Rule for Electric Vehicles Could Shut Out Australia’s Critical Minerals

October 31, 2023, The Strategist

Commentary from Andy Jack, Dan Levine, and Jamin Koo’s blog post “Will Treasury Adopt the Same Interpretation of 'Foreign Entity of Concern' for both the Section 48D Credit under the CHIPS Act and the Section 30D Credit under the Inflation Reduction Act?” was included in an article by The Strategist, a blog by the Australian Strategic Policy Institute. The article discussed how new clean vehicle tax credits in the Inflation Reduction Act would disqualify electric vehicle (EV) purchasers from receiving both the critical-minerals tax credit and the battery-components tax credit if “any of the applicable critical minerals contained in the battery…were extracted, processed, or recycled by a foreign entity of concern [FEOC].”

Andy, Dan, and Jamin’s post was cited on whether the Department of the Treasury and Internal Revenue Service (IRS) would use a definition of what constitutes a FEOC applied to the CHIPS and Science Act. “While there is a good reason to adopt a single interpretation for the same term in nearly concurrently-enacted statutes, Treasury is not bound to apply the CHIPS Act interpretation of ‘foreign entity of concern” to the Inflation Reduction Act, they wrote in the post.

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