China criticizes US regulation limiting domestic battery use as "artificial trade barrier"

"Necessary Measures Will Be Taken to Protect Legal Rights"

The Chinese government has opposed the U.S. 'Foreign Entity of Concern' (FEOC) regulation, which effectively restricts the use of Chinese-made battery components and critical minerals.

At a briefing on the 7th, Chinese Ministry of Commerce spokesperson He Yadong responded to questions about the FEOC regulation, which disqualifies electric vehicles from receiving tax credit benefits under the Inflation Reduction Act (IRA) announced by the U.S. on the 1st (local time). He stated, "Electric vehicles are a leading industry in science and technology, and competition is the core of technological advancement," adding, "This is the U.S. erecting artificial trade barriers that hinder fair competition, which is detrimental to the development of electric vehicle technology and industry."

He continued, "The U.S. should respect market principles, correct discriminatory subsidy practices, and create a fair business environment," warning, "China will take necessary measures to protect its legitimate rights and interests."

Until now, the U.S. has provided tax credit benefits of up to $7,500 for electric vehicles that meet battery component and critical mineral origin requirements and are finally assembled in North America. However, according to the detailed FEOC regulation, from 2024, battery components must not be sourced from FEOC entities, and from 2025, critical minerals used in batteries must also not be sourced from FEOC entities to qualify for these benefits. FEOC refers to companies "owned, controlled, or directed" by the governments of China, Russia, North Korea, and Iran.