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Ford Motor Co said on Thursday that the US Treasury Department should limit the definition of a “foreign entity of concern” to ensure that more electric vehicles can qualify for up to $7,500 in consumer tax credits.
In August, Congress passed the $430 billion Inflation Reduction Act (IRA) to restructure EV tax credits and, in future years, bar credits if any EV battery components are manufactured or developed by a “foreign entity of concern” or if the batteries contain critical minerals that have been extracted, processed, or recycled by a foreign entity of concern.
The rules are aimed at removing the United States from China’s battery supply.
“While Ford appreciates and supports the overall goal of the law to strengthen the localization of battery production and critical mineral mining and processing in the US and our trading partners and allies, an overly broad interpretation of this provision risks undermining the same goal of making clean auto credit unavailable,” the automaker said in comments filed with the Treasury and sent to the media.
Ford said it wants the Biden administration to make sure that joint ventures in critical mineral extraction, processing, or recycling “will not cause vehicles to be automatically excluded.” The company also said that any US-organized company, regardless of its owners, should not trigger foreign entity rules.
Ford also said automakers need a “de minimis standard” as part of foreign entity reporting requirements “so that unintended traces of critical minerals do not disqualify consumers from in getting a tax credit.”
Ford said in July that it planned to import cheaper lithium ion batteries for its North American electric pickup trucks and SUVs from Chinese battery giant CATL.
The IRA requires automakers to have 50% of critical minerals used in batteries come from North America or America’s allies by 2024, rising to 80% by the end of 2026. Restrictions apply to foreign entities in vehicle battery components starting in 2024 and battery minerals starting in 2024 in 2025.
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