RE:RE:Senate moves forward with EV tax credit reform Inflation Reduction Act outlook
The IRA's passage is not yet assured, but the bill enjoys strong support from President Biden and Congressional Democrats, and there is a strong chance that Congress will approve the bill in the coming weeks. If enacted in its current form, the IRA would place EVs assembled outside North America at a competitive disadvantage in the US market, and therefore may prompt trade disputes with countries such as Japan, South Korea, and the European Union. The IRA seeks to avoid disruption of the North American automotive industry by allowing vehicles to qualify based on North American content and assembly (unlike previous versions of the legislation, which would have required US content and assembly). However, even vehicle producers within North America would have to make substantial changes to their sourcing practices to benefit from the IRA's revised tax credit. Many of the minerals and inputs needed to produce EV batteries are not widely available in North America, and this has been cited as a major obstacle to producing batteries that satisfy the regional content requirements of the US-Mexico-Canada Agreement ("USMCA").7 The same resource constraints will make it difficult (and potentially costly) to comply with the regional sourcing requirements envisioned in the IRA, absent substantial increases in North American production of critical minerals and battery components.
https://www.jdsupra.com/legalnews/new-us-climate-bill-seeks-to-onshore-6888610/