EV Battery Requirements Take Effect April 18;
U.S., Japan Announce Deal on Battery Minerals
Under guidance released this morning by the U.S. Treasury Department, for vehicles placed in service (customer has taken delivery) on or after April 18, at least half of its battery components must be made in North America and at least 40 percent of the battery’s critical minerals must be extracted or processed in the U.S. or recycled in North America, or in a country with which the U.S. has a free trade agreement. Notably, Treasury’s guidance takes a broad interpretation of a free trade agreement partner, and includes not only the 20 countries with whom the U.S. has a formal Free Trade Agreement (FTA), but also those with smaller, limited deals in place.
Vehicles would still need to meet the North American assembly requirement and MSRP cap, and consumers would still need to qualify for the Adjusted Gross Income limits. The implementation of the battery rules is expected to decrease the number of vehicles which qualify, at least in the short term. Auto manufacturers will spend the intervening weeks examining their supply chains to determine what vehicles are eligible for the EV tax credit. Treasury, in consultation with the OEMs, will release a monthly list of eligible vehicles on FuelEconomy.gov beginning on April 18..
U.S.-Japan Minerals Agreement
Earlier this week, the U.S. and Japan announced a trade agreement on minerals, which allows minerals from Japan to qualify for at least part of the credit. The announcement was met with frustration by congressional leaders who believed that the pact should be considered and voted on by Congress under their constitutional authority over foreign trade, but it’s unclear what action, if any, Congress will take. The U.S. is pursuing a similar agreement on minerals with the European Union.
Quotes of the Week
“The proposed guidance continues to highlight the challenges ahead for U.S. automakers’ electrification efforts and consumers’ adoption of clean vehicles. The number of vehicles eligible for even a partial tax credit has been significantly reduced, slowing adoption of electric vehicles, under the new rules.”
— Jennifer Safavian, President & CEO, Autos Drive America (www.autosdriveamerica.org)
“Trade is the beating heart of economic growth and job creation in this country. Trade results in lowers costs for American consumers — something that is desperately needed at a time when families struggle with high prices caused by inflation.”
— Suzanne Clark, President & CEO, U.S. Chamber of Commerce (Fox News)
ICYMI
In case you missed it, check out the latest Beltway Talk podcast featuring AIADA Chairman Mike DeSilva.
Friday Feel Good
Here is just one recent example of how dealers are doing good:
AutoNation Hyundai Mall of Georgia hosted a cookout this past weekend to raise money for CURE childhood cancer benefiting Lauren's Run and Picnic.
We want to hear more about how you are supporting your local community – tweet us at @AIADA_News and use the hashtag #DealersDoGood.
You Auto Know will be on hiatus until Congress returns to Washington the week of April 17. We’ll be back then with all the news from inside the beltway that You Auto Know about.
