- The US Treasury will issue guidance on Section 30D of the Inflation Reduction Act by March 31st, which determines whether US consumers receive tax credits for buying a fully electric or plug-in hybrid vehicle.
- The law states that vehicles can qualify for the full $7,500 credit if half of their battery components are made in North America and 40% of the value of raw materials in the battery are extracted from or processed domestically or in countries the US has free-trade agreements with.
- Determining which foreign entities of concern have control or influence over a company that mines or processes critical minerals is complex.
- The new language of 'constituent materials' means cathode could come from any country with a free-trade agreement with the US instead of just North America and still qualify.
- The Biden administration has been working on mini critical mineral trade deals to grandfather in key commodity producers including Canada, Australia, Chile, South Korea, the European Union, and Japan.
Biden Reaches Moment of Truth for Electric Vehicle Tax Credits
The US Treasury will issue guidance on tax credits for electric and plug-in hybrid vehicles by March 31st, detailing the percentage of components that must be sourced domestically and in countries the US has free-trade agreements with.