Guidance on electric vehicle battery sourcing to qualify for federal tax credits was delayed until March, meaning some vehicles that may not comply will briefly continue to be eligible for the credits.

The credits, included in the Inflation Reduction Act signed into law in August, will be issued to EV consumers and can total up to $7,500.

The law requires that EVs be assembled in North America and is intended in part to boost domestic EV battery sourcing in order to wean the U.S. off overseas suppliers, particularly those in China.

The coming Treasury Department guidance on the tax credits will lay out particulars on required qualifications. Carmakers are keen to ensure their models qualify for the relief.

The guidance involves restrictions on the sourcing of battery components, an aspect of the law that has drawn the ire of the European Union and other countries, which call it unfair on the trading front.

DIG DEEPER: Carmakers Also Give U.S. Flack Over EV Tax Credit