In 2022, the Biden Harris Administration’s Inflation Reduction Act (IRA) created extreme tax subsidies for electric vehicles (EVs), at the expense of American taxpayers. 

In the bill, there was an effort to ensure those subsidies did not go to foreign entities of concern (FEOC), such as entities with ties to China: EVs that contain battery components or critical minerals sourced from an FEOC are not eligible for a tax subsidy. However, instead of supporting American manufacturing and innovation, the Biden Harris Administration caved to radical leftist activists and some EV producers, imposing lenient FEOC rules that benefit China.

In 2023, the Commerce Department issued rules that defined an FEOC as an entity with 25 percent or more of the its voting interest, board seats, or equity interest held directly or indirectly by the government of a country of concern, its officials, or any person that is a citizen, national, or resident of such country. Later that year, the Treasury Department defined an FEOC in a similar manner, but with massive loopholes that benefit China.

Treasury created the ‘Billionaire loophole’ by excluding from their FEOC definition “any person that is a citizen, national, or resident,”  allowing entities owned by wealthy foreign nationals to benefit from the EV tax credits if their ties to the Chinese Communist Party or other hostile government were unofficial. Additionally, it created the ‘Chinese Manufacturing Loophole’ by defining the battery component in a beneficial manner to China and allowing them to leverage its battery supply chain dominance for credit

We cannot allow foreign nations and entities of concern to receive American tax subsidies at the expense of our taxpayers while threatening American advanced manufacturing.

Rep. Carol Miller’s legislation, H.R. 7980, the End Chinese Dominance of Electric Vehicles in America Act of 2024, amends the Internal Revenue Code of 1986 to exclude vehicles with batteries that contain materials sourced from foreign entities of concern from the clean vehicle credit, requires the Treasury Department to follow the same definition of FEOC as the Commerce Department, closes the ‘Chinese Billionaire Loophole’ and the ‘Chinese Manufacturing Loophole,’ and expands FEOC limitations.

House Republicans will keep fighting to protect American advanced manufacturing and innovation, and ensure that foreign adversaries like China do not receive American tax credits.