U.S. to allow Japan-provided materials in EV tax credit scheme

Washington and Tokyo are preparing to make Japanese vehicles eligible for tax credits in a U.S. initiative for electrified vehicles that use critical minerals from the United States or countries that it has free trade agreements with, sources familiar with the talks said Tuesday.

Under the changes, the United States would relax the rules to allow EVs to contain key minerals provided by Japanese companies, such as parts makers, despite Tokyo not holding a free trade agreement with Washington.

Promoting EV uptake is a key U.S. government policy. As part of its Inflation Reduction Act passed in A...