The Internal Revenue Service and U.S. Department of the Treasury announced on March 11 interim guidance that establishes restrictions on federal clean energy tax credits for manufacturers receiving material assistance from a prohibited foreign entity under the One Big Beautiful Bill Act.
The new guidance, Notice 2026-15, is intended to implement provisions of the law that limit eligibility for federal clean energy tax credits when manufacturers are tied to entities identified as national security risks. The measure is part of ongoing efforts to address concerns about supply chain reliance on companies linked to foreign military interests.
Notice 2026-15 defines a prohibited foreign entity as a company identified as a Chinese military company under Section 1260H of the National Defense Authorization Act for fiscal 2021, according to the Treasury Department. Contemporary Amperex Technology Co. Limited, or CATL, appears on the Department of Defense list. Written comments on the guidance are due March 30.
Ford Motor Co.’s $3 billion BlueOval Battery Park Michigan facility in Marshall is scheduled to begin producing lithium iron phosphate batteries this summer. The plant is designed to produce about 20 gigawatt-hours of batteries annually and uses technology licensed from Contemporary Amperex Technology Co. Limited, according to Ford Authority.
Congress also barred the Department of Defense from purchasing batteries from Contemporary Amperex Technology Co. Limited starting Oct. 1, 2027, under Section 154 of the National Defense Authorization Act for fiscal 2024. The provision applies to six Chinese battery manufacturers and is part of broader national security efforts to reduce reliance on Chinese military-linked supply chains, Bloomberg reported.
The Department of Defense designated Contemporary Amperex Technology Co. Limited a Chinese military company operating in the United States on Jan. 7, 2025. The designation was made under Section 1260H of the National Defense Authorization Act for fiscal 2021, which requires the Pentagon to publish an annual list of such companies operating in the country, CNN reported.
