Senate is expected to debate the IRA over the weekend. The law would increase investment to reduce GHG emissions.
But the other part of it is a new system of EV tax credits.
However, the new law would have domestic content requirements for EV batteries in order to qualify. Any batteries with any kind of content from China would not qualify.
Republicans like Marco Rubio plan to introduce amendments to require 100% US content from the start, rather than ramping up from 40 to 100% by 2029. Since Republicans won't vote for the IRA, this is just an attempt to rat fuck it.
The problem is no existing EV, including those made by US carmakers, would qualify for tax credits at all. Another problem is that a lot of components can't always be tracked to its source.
So various companies -- all seem to be US-based -- are asking for waivers or delays. There has been waivers granted for the Buy America provisions of the infrastructure act passed last year, because without those waivers, a lot of projects wouldn't even be able to start.
Besides requests for waivers, companies in the EV supply chain are hoping that the IRS and Treasury will interpret the laws more broadly and allow tax credits on existing EVs.
The reconciliation bill does not expressly outline any waivers. But how the requirements are defined and applied by the Treasury Department and IRS could provide some wiggle room.
Britton of ZETA said that while “the law is the law,” Treasury has authority over determining how U.S. businesses are allowed to interact with “entities of concern,” for instance — and the IRS will decide how and when to calculate how much of a battery is foreign-made.
One infrastructure trade executive suggested that there may be even more need for exemptions for the electric vehicle credits than there is for Buy America.
“Maybe it’s not apples to apples but it’s comparing fruit,” said AASHTO executive director Jim Tymon, whose organization represents state Departments of Transportation, including those pushing for Buy America waivers. “With a vehicle or a battery it’s a much more detailed analysis to figure out where those materials are coming from.”
The Democrats have crafted an electric vehicle tax credit not a single car on the market would qualify for. But Washington has always known how to break its own rules.
www.politico.com
It's not just EV companies. Many states are also pushing for waivers so that they can spur EV sales as soon as the IRA is enacted, rather than waiting years for a US battery supply chain to be built up, which could take years.
arstechnica.com
