The US government has proposed new rules that would bar electric vehicle buyers from claiming tax credits if battery components are produced by companies linked to China and other countries.

The proposals are included in guidance on tax credit requirements for 2024 that was presented by the Treasury Department and other authorities on Friday.

President Joe Biden earlier signed a law that provides for up to 7,500 dollars in tax credits to buyers of EVs assembled in the United States, Canada and Mexico. The move was apparently aimed to counter China, which controls an overwhelming share of the EV supply chain.

The proposed guidance says EVs would not be eligible for tax breaks starting next year if they use batteries manufactured by companies and groups that have 25 percent or more of their capital from countries such as China and Russia.

Beginning in 2025, this exclusion would also apply to lithium and other critical minerals extracted, processed or recycled by such entities.

The Treasury Department says it is tightening the rules for security concerns. It plans to solicit opinions from companies by the end of the year producing a finalized set of guidelines.

Analysts point out that the tightened rules will impact the Biden administration's efforts to promote a shift to EVs.