Report: Biden’s Tax Credits for Electric Cars ‘Running into a Problem’ as China Controls Supply Chain

US President Joe Biden speaks during a signing ceremony for H.R. 5376, the Inflation Reduc

President Joe Biden’s tax credits for American-made electric vehicles are “running into a problem,” a new report details, as China controls the supply chain for raw materials needed to manufacture batteries.

Last year, House and Senate Democrats approved Biden’s Inflation Reduction Act which gives thousands of dollars in tax credits to American consumers to buy electric vehicles made in the U.S., Mexico, and Canada.

Now, Axios reports that Biden’s electric vehicle tax credits “to spur domestic battery manufacturing is running into a problem: Some critical raw materials are only found abroad, and China controls much of the supply.”

Specifically, China dominates a number of raw materials needed to manufacture batteries for electric vehicles such as graphite, lithium, and cobalt. By 2025, for instance, China is set to control about a third of all of the world’s lithium.

Some automaker executives, like Stellantis CEO Carlos Tavares, are hoping the Chinese raw materials issue boosts a free trade consensus among Washington, DC, lawmakers as they warn against economic nationalist policies that prioritize domestic industries.

“There are a lot of traps,” Tavares told Axios. “The world is fragmenting, and global trade is going backwards.”

China’s dominance in the electric vehicles market has already come to a head in Michigan where Gov. Gretchen Whitmer (D) has celebrated a $3.5 billion battery plant in Marshall, Michigan, as part of a deal between Ford and China’s Contemporary Amperex Technology Co. (CATL).

CATL is China’s premier electric vehicle battery supplier and enjoys immense support from subsidies overseen by the Chinese Communist Party (CCP). Despite China’s direct involvement with the plant, Ford is hoping to score federal subsidies through Biden’s tax credits.

As Breitbart News reported in February, CATL CEO Zeng Yuqun has deep ties to the CCP. Yuqun is a member of the Chinese People’s Political Consultative Conference (CPPCC) National Committee — a high-ranking CCP advisory body that serves as a central component of the party’s “United Front” efforts.

China’s “United Front” efforts, as the federal government has detailed, are considered to be a front for CCP intelligence operations overseas.

Sen. Marco Rubio (R-FL) has since written to Biden’s top officials urging them to block federal subsidies to Ford over its deal with CATL.

“If Chinese companies like CATL are able to exploit both Chinese and United States incentives for battery and electric vehicle technology through clever corporate arrangements, then there is no use in investing federal funds toward industrial development in the first place,” Rubio wrote.

John Binder is a reporter for Breitbart News. Email him at Follow him on Twitter here.


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