The legislation closes Biden-Harris loopholes that give taxpayer money to Chinese billionaires and manufacturers for building electric vehicles (EVs).

WASHINGTON, D.C. – Today, in a bipartisan vote, the House of Representatives passed the End Chinese Dominance of Electric Vehicles in America Act, legislation approved earlier this year by the Ways and Means Committee, to close loopholes created by the Biden-Harris Administration that give American taxpayer dollars to Chinese billionaires and battery manufacturers for building luxury electric vehicles. As a part of the Democrats’ agenda to force Americans to buy EVs, Washington Democrats included hundreds of billions of dollars’ worth of generous subsidies in the Inflation Expansion Act specifically for electric vehicles and their components. Republicans and Democrats joined together in voting to close the China-friendly loopholes that make Chinese billionaires and battery manufacturers the beneficiaries of those taxpayer-funded handouts. 

During debate in the House of Representatives, Ways and Means Committee Chairman Jason Smith (MO-08) highlighted how Vice President Harris and congressional Democrats are solely responsible for opening these loopholes: 

“When Vice President Harris cast the deciding tie-breaking vote for the Inflation Expansion Act, she and every Democrat in Congress, handed a massive gift to the Chinese government and its cronies. 

“While the letter of the law, as written by Senator Manchin, states these tax handouts are off limits to foreign entities of concern like China, the Biden-Harris Administration wrote ridiculously weak implementation regulations that every Chinese businessman should love. 

“The foreign entity of concern regulations for the Inflation Expansion Act’s EV credits, put out by the Department of Treasury, are insulting to every American who cares about national security and who doesn’t want to see their tax dollars flow to China. 

…

“It’s time we put the brakes on giving taxpayer money to Chinese billionaires and the Chinese Communist Party.

The End Chinese Dominance of Electric Vehicles in America Act

The bill prevents Chinese individuals and battery manufacturers in the EV supply chain from receiving Inflation Expansion Act subsidies. 

• The Inflation Expansion Act created generous new tax subsidies at an enormous cost to the taxpayers. The Joint Committee on Taxation (JCT) now estimates the special interest tax breaks will cost at least $650 billion, a 240 percent increase above the original score. Numerous outside entities have estimated the Inflation Expansion Act’s green corporate welfare will cost well in excess of $1 trillion.
• Democrats claimed the Inflation Expansion Act would prohibit tax subsidies from going to EVs containing battery components or critical minerals sourced from a foreign entity of concern (FEOC). 
• However, the Treasury Department issued FEOC rules for the EV tax subsidies beneficial to Chinese interests by allowing Chinese billionaires with “unofficial” ties to the Chinese Communist Party to access the American tax subsidies. 
• The Treasury Department’s definition of “battery component” also allowed Chinese manufacturers to produce all materials for a battery and still be eligible to benefit from the subsidy.
• The bill closes the Chinese billionaire loophole to ensure the Treasury Department does not allow any foreign national from a foreign entity of concern like China to have ownership in entities receiving these tax benefits. This definition is similar to one developed by the Commerce Department for semiconductor grants in the CHIPS Act. 
• The bill also closes the Chinese manufacturing loophole to prevent China from leveraging its battery supply chain dominance to produce upstream materials, parts, and intellectual properties that are eligible for an EV tax subsidy in the United States.

Click here for a fact sheet on the legislation.