Hand-wringing that Democrats’ signature electric vehicle tax credit's battery and minerals sourcing requirements are too tough to use ignores a political reality: Washington knows how to get around its own rules.
Hand-wringing that Democrats’ signature electric vehicle tax credit's battery and minerals sourcing requirements are too tough to use ignores a political reality: Washington knows how to get around its own rules.that contains the credits, lawmakers had to agree that electric vehicles should be made with North American parts and minerals, even though it would rely on a U.S. supply chain that is in its infancy. Those rules allow lawmakers — including Sen.
For instance, though Congress enacted stringent new Buy America rules in last year’s massive infrastructure law, they were immediately waived temporarily to give states and cities more time to adapt. Not a single electric vehicle currently on the market would qualify. It’s not surprising, considering that the United States accounts for just 8 percent of global lithium-ion battery production, compared to China’s 76 percent.
“It's a minefield,” he added. “We're terrified that we might state that we comply and that somebody down the road may argue that we don't, because three or four levels of provenance upstream, it turns out that some things come from overseas and we didn't even know it.”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.
“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.”
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