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In
August, Congress passed the $430 billion Inflation Reduction Act
(IRA) legislation to restructure EV tax credits and, will, in
the coming years, bar credits if any EV battery components were
manufactured or assembled by a "foreign entity of concern" or if
batteries contain critical minerals extracted, processed, or
recycled by a foreign entity of concern.
The rules were aimed at weaning the United States off the
Chinese battery supply chain.
"While Ford appreciates and supports the overall objective of
the law to bolster the localization of battery production and
critical mineral mining and processing in the U.S. and with our
trading partners and allies, an overly expansive interpretation
of this provision risks undermining that very same objective by
making the clean vehicle credit largely unavailable," the
automaker said in comments filed with Treasury and sent to
media.
Ford said it wants the Biden administration to ensure joint
ventures in critical mineral extraction, processing, or
recycling "will not cause vehicles to be automatically
excluded." The company also said any U.S.-organized company,
regardless of its owners, should not trigger the foreign entity
rules.
Ford also said automakers need a "de minimis standard" as part
of foreign entity reporting requirements "so that unintended
traces of critical minerals do not disqualify consumers from
getting a tax credit."
Ford said in July it planned to import lower-cost lithium ion
batteries for its North American electric pickup trucks and SUVs
from Chinese battery giant CATL.
The IRA requires automakers to have 50% of critical minerals
used in batteries sourced from North America or American allies
by 2024, rising to 80% by the end of 2026. The foreign entity
restrictions apply to vehicle battery components starting in
2024 and battery minerals beginning in 2025.
(Reporting by David Shepardson; Editing by Muralikumar
Anantharaman)
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