(Bloomberg) -- South Korean battery stocks rose Monday after the US released guidelines designed to limit electric car makers from sourcing battery materials from China.

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Ecopro BM Co., which produces cathode-active materials, surged as much as 26% in Seoul trading, while SK IE Technology Co., which makes separators used in EV batteries, rose 14%. L&F Co. jumped 8.3% and LG Energy Solution Ltd. — the biggest battery maker outside China — gained 1.8% in Seoul trading. In contrast, China’s Contemporary Amperex Technology Co. Ltd., the world’s largest battery maker, fell 2.6% to trade at its lowest since March 2021.

The Biden administration’s rules, announced Friday, aim to increase supply-chain security by blocking EV manufacturers from sourcing battery materials from China and other foreign adversaries. The guidelines, which were required as part of a deal to extend the $7,500 tax credit through Biden’s signature climate law, establish a 25% ownership threshold for a company or group to be classified as a foreign entity of concern, government speak for businesses or groups owned or controlled by US geopolitical foes.

Read More: US Sets Limits on Chinese Content to Receive EV Tax Credits

Hana Securities said in a note that the restriction of licensing deals between US automakers and Chinese battery companies would be good for South Korean battery firms. For example, Ford Motor Co. had planned to license CATL’s lithium iron phosphate battery technology for use in a planned $3.5 billion EV battery plant. Work on the controversial factory was suspended in September.

Some Korean companies, however, have partnerships in which Chinese firms have stakes of more than the 25% threshold to be classified as a foreign entity of concern. They include LG Chem Ltd., Posco Holdings Inc. and Ecopro Materials Co., which have established, or are planning, joint ventures with Chinese companies to produce battery materials in South Korea. Vehicles containing any battery components manufactured or assembled by so-called foreign entity of concerns won’t qualify for the tax credit.

LG Chem shares dropped as much as 3.2% on Monday and Posco Holdings slid as much as 2.1%.

Representatives from South Korea’s trade ministry met with battery companies on Saturday and said they would help them diversify supply chains for key materials.