Connect with us

Hi, what are you looking for?

CATL battery pack
Image courtesy of CATL.


Battery Materials Sourcing Causes Rethink Of EV Incentives

EV incentives in the new Inflation Reduction Act are causing a lot of controversy on Capitol Hill with automakers asking for more time to meet materials sourcing requirements.

As predicted, the proposed Inflation Reduction Act and its package of EV incentives is roiling the political waters in Washington as those who like the bill fight to get it passed and those who don’t like the bill fight to get it changed. Either way, it’s a great time to be a lobbyist in the nation’s capitol.

Several automakers are upset by the sourcing requirements for battery components and critical minerals that have to be met in order for the vehicles they manufacture to qualify for the proposed incentives, which include a $7,500 point of sale rebate for light duty cars and trucks and a $40,000 rebate for heavy trucks weighing more than 14,000 pounds.

Make no mistake. This proposed EV incentives legislation is about politics and how the United States has sat idly by while China became the dominant force in battery materials and solar panel manufacturing over the past 20 years. The bill is intended to correct that imbalance, but many in the industry say it goes too far, too fast. (Editor’s Note: others say it doesn’t go too far, too fast enough!)

Those of us who have been covering the auto industry for a while will hear echoes of prior calls by the industry to slow down the implementation of such things as seat belts, air bags, and fuel economy standards. Manufacturers always want more time. It’s what they do. But in this case, there may be some merit to their concerns.

EV Incentives Cause Concerns

Rivian RiS

Image courtesy of Rvian

Rivian, whose high-end trucks will be excluded from the tax credits (capped at an MSRP of $80,000) is particularly upset. It says the EV tax credit proposal “will pull the rug out from consumers considering purchase of an American made electric vehicle” and that the “final package must extend the transition period.” GM said on Friday that “some of the provisions are challenging and cannot be achieved overnight,” but added that it was “encouraged by the framework laid forth in the legislative text.”

Privately, automakers are saying the percentage targets for critical minerals and battery components sourcing are too high and rise too quickly. Debbie Stabenow, a senator from Michigan, told Reuters on Tuesday, “It’s a very cumbersome, unworkable credit once the full restrictions set in. There are conversations going on.” She did note, however, that the bill includes billions of dollars in new loans and grants for auto and battery production and commercial vehicle credits.

The bill includes rising requirements for the percentage of North American battery components by value in order to qualify for EV incentives and would disallow any batteries after 2023 with any Chinese components. Last week, Senator Marco Rubio sought to toughen the standards further to ensure EV credits can apply only if the EV battery’s critical minerals are sourced in the United States or from a country with which the United States has a free trade agreement.

Rubio’s amendment may be a “poison pill” ploy designed to force some Democrats to vote against the bill. So far, not a single Republican senator has had anything good to say about the bill, even though it would be an important first step in helping the United States regain its role as a leader among the world’s nations on climate change.

Manchin Scoffs At EV Incentives Change

For his part, Joe Manchin, the coal-powered senator from West Virginia who brokered the new legislative package with Senate majority leader Chuck Schumer, has shown no interest in making any changes to the proposed legislation. “Tell (automakers) to get aggressive and make sure that we’re extracting in North America, we’re processing in North America, and we put a line on China,” Manchin told reporters. “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains. I’m not going to do it.”

He added that the United States builds its own gasoline-powered vehicles and engines. “Now all of a sudden — now we can’t? Come on.” That statement illustrates how little Manchin understands about the world of manufacturing. The truth is that Tesla makes the cars with the highest US content of any manufacturer, but even it sources materials from all over the world. GM, Ford, Stellantis, Volvo, Mercedes, Kia, Hyundai, and others also build cars in the US, but the components to manufacture them come from all parts of the globe.

Manchin apparently is ignorant about how manufacturing works today, but that doesn’t stop him from shooting off his mouth. As Mother Jones observed many years ago, “I asked a man in prison once how he happened to be there and he said he had stolen a pair of shoes. I told him if he had stolen a railroad he would be a United States Senator.” In Manchin’s case, he didn’t steal a railroad, but he did use his position to create a market for a coal mine he and his family own.

Asked if automakers had submitted specific changes to Manchin, John Bozzella, head of auto trade group the Alliance for Automotive Innovation, told Reuters, “We’re having good conversations,” but declined to elaborate.

CATL Hits The Pause Button On North American Factory

All the political roistering about Nancy Pelosi’s visit to Taiwan is having consequences in the EV battery marketplace. Everyone wants more US content in the EVs manufactured in the US, but should a Chinese company be part of the mix? CATL, the largest battery cell manufacturer on the planet, has been exploring the possibility of building a battery factory in North America. It has been investigating sites in Mexico and the US and was reportedly ready to announce its intentions in the next few weeks.

But Bloomberg reports the company plans to wait until September or October to make the announcement. It is concerned doing it now could stoke tensions at a sensitive time in US-China diplomatic relations. Its headquarters are in Fujian, which is directly across from Taiwan. China has announced military exercises will take place around the island this week in response to Pelosi’s visit to Taipei. It could also be concerned about now the Chinese government would react to such an announcement at this time.

The Takeaway

Politics is like making sausage. Nobody really wants to see how it’s done. Maybe some provisions of the IRA will get tweaked, but every change in one part can lead to calls for changes in other parts. Pretty soon the whole package comes unglued, something the Republicans would love to see happen. The only thing we can be sure of is that lobbyists will make a lot of money before the dust settles and the smoke clears. That and a number of campaign funds will get major cash infusions by the time the final votes are tallied.

Stay tuned. The finish line is in sight, but we are not quite there yet.

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Former Tesla Battery Expert Leading Lyten Into New Lithium-Sulfur Battery Era — Podcast:

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
If you like what we do and want to support us, please chip in a bit monthly via PayPal or Patreon to help our team do what we do! Thank you!
Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."


You May Also Like


Nobody could have predicted that one day, red state right-to-work laws would attract electric vehicle manufacturers and help cement decarbonization into public policy.


May saw France’s plugins take over 24% market share, up from 20.9% year on year, with new Stellantis BEVs arriving. Full electrics grew from...


Tesla stands to qualify for $1.8 billion in the federal production credits that are part of the Inflation Reduction Act this year.


Stratas without charging have units that sell for a bit less than stratas that have it

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.