The Biden Administration proposed new rules December 1 that could make it more difficult for electric vehicles to qualify for a full $7,500 tax credit.

According to the Associated Press, the plans outlined by the Energy and Treasury departments would limit EV buyers from claiming the full tax credit if they purchase a car containing battery materials from China or other countries deemed hostile to the U.S. EVs are barred from qualifying for the tax credit if they contain critical minerals or other battery components made by a “foreign entity of concern,” which includes China, North Korea, Russia and Iran.

The proposals are set to be finalized in January 2024 following a 30-day public comment period. At this time, it is unclear what vehicles will be eligible for the full tax credit.

Sam Abuelsamid, a mobility analyst for Guidehouse Insights, said that he expects many EVs eligible for tax credit will see the total cut in half to just $3,750 in 2024 when the regulations take effect.

The White House said it hopes the new rules will encourage the development of auto industry supply chains in the U.S.

“Automakers have already adjusted the supply chain to ensure buyers who are eligible for these credits are continuing to do so,’' Deputy Treasury Secretary Wally Adeyemo told reporters at a briefing this week. “These changes take time, but companies are making investments in Americans who are buying these cars.’'