Details on the new EV credit from the AP

CybertruckAgent

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By my reading of this report potentially no new Tesla’s would be eligible for the full $7500. My assumption is that’s by design but that’s a topic for another day. When you combine the American made/mined components requirements with the under 55k sticker price for cars, it seems to exclude most if not all current Teslas. Perhaps versions of the Cybertruck will qualify, but we won’t know till pricing and production specs are public.

“…because of the bill’s requirement that, to qualify for the credit, an electric vehicle must contain a battery built in North America with minerals mined or recycled on the continent.

And those rules become more stringent over time — to the point where, in a few years, it’s possible that no EVs would qualify for the tax credit, says John Bozzella, CEO of the Alliance of Automotive Innovation, a key industry trade group. As of now, the alliance estimates that about 50 of the 72 electric, hydrogen or plug-in hybrid models that are sold in the United States wouldn’t meet the requirements.”


“For an EV buyer to qualify for the full credit, 40% of the metals used in a vehicle’s battery must come from North America. By 2027, that required threshold would reach 80%.

If the metals requirement isn’t met, the automaker and its buyers would be eligible for half the tax credit, $3,750.”

“The tax credit would be available only to couples with incomes of $300,000 or less or single people with income of $150,000 or less. And any trucks or SUVs with sticker prices above $80,000 or cars above $55,000 wouldn’t be eligible.

https://apnews.com/article/electric-vehicles-tax-credit-cfd3d9322230446f65d629b05c2ae551

 

Throwcomputer

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This is what I'm sayin'.. and wish more experts would write articles detailing the percentage of materials each OEM sources fit this requirement.

But I think it is slightly less restrictive than your quoted article mentions.

Fixed it for you:

“For an EV buyer to qualify for the full credit, 40% of the metals used in a vehicle’s battery must come from North America, or from a country with a free trade agreement with the US. By 2027, that required threshold would reach 80%."

This is slightly easier to qualify. This also came from Manchin obviously as a reflexive posturing to save his states mining industry, except that you can't put a restriction on where on earth minerals required for a battery come from because no one has control over where on earth minerals are naturally formed. And who knows if his state even has this mineral. I doubt it. So, while i'm sure it was a well intentioned posturing, its by default going to be extremely difficult to meet those requirements even if these companies try their hardest to find/source this stuff from North America.

I did read in the past year that there was a company, Lithium Americas, planning on trying to mine lithium in the US somewhere near Nevada. This obviously is fraught with problems for social, environmental and political reasons. It's a grand scale case of NIMBY.

https://www.nytimes.com/2021/05/06/business/lithium-mining-race.html
 

firsttruck

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....
This also came from Manchin obviously as a reflexive posturing to save his states mining industry, except that you can't put a restriction on where on earth minerals required for a battery come from because no one has control over where on earth minerals are naturally formed. And who knows if his state even has this mineral. I doubt it. So, while i'm sure it was a well intentioned posturing, its by default going to be extremely difficult to meet those requirements even if these companies try their hardest to find/source this stuff from North America.
.....
It was intentioned alright. Intentioned to slow transition away from fossil fuels.

The fossil fuel industry & its politicians could not completely stop a climate change bill from passing so they tried to neuter it as much as possible.

Possible full $7K credits for plugin hybrid with batteries as small a 7KWH is a huge part of it. Helps legacy auto & fossil fuel industry.
 

Crissa

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Tesla is the most qualified to qualify: All of their EVs are assembled in the US, and the model 3 and Y use packs and cells made in Nevada. Only the LFP and Model S/X use cells from overseas, and the S and X are too expensive anyhow.

The LFP packs are still assembled in the US.

-Crissa
 

Throwcomputer

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Tesla is the most qualified to qualify: All of their EVs are assembled in the US, and the model 3 and Y use packs and cells made in Nevada. Only the LFP and Model S/X use cells from overseas, and the S and X are too expensive anyhow.

The LFP packs are still assembled in the US.

-Crissa
Assembly in the USA is not under question for Tesla. What is unclear is how much of the raw materials Tesla uses to create those cells meets the requirements.
 


firsttruck

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Tesla is the most qualified to qualify: All of their EVs are assembled in the US, and the model 3 and Y use packs and cells made in Nevada. Only the LFP and Model S/X use cells from overseas, and the S and X are too expensive anyhow.

The LFP packs are still assembled in the US.

-Crissa
Tesla is much better positioned to get the new EV credit than the competitors but initially even Tesla might not qualify for full $7K credit until Tesla can change where minerals used in cells are sourced. I think Tesla has good chance for half credit ($3.5K) which is more than the zero credit Tesla gets today.


-----------------------

What If No EVs Qualify for the EV Tax Credit? It Could Happen.
By John Bozzella, president and CEO of the trade association Alliance for Automotive Innovation
August 05, 2022
https://www.autosinnovate.org/posts/blog/what-if-no-evs-qualify-for-the-ev-tax-credit

.....
72 EV models currently available for purchase in the United States including battery, plug-in hybrid and fuel cell electric vehicles. Seventy percent of those EVs would immediately become ineligible when the bill passes and none would qualify for the full credit when additional (mineral) sourcing requirements go into effect. Zero.


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Inflation Reduction Act mandates escalating battery critical mineral requirements to qualify for EV tax credit 09 August 2022
https://www.greencarcongress.com/2022/08/20220809-ira.html

.....
Specifically, the bill requires (Part 4, Sec. 13401. subsection (e)(1)(A)) that the “percentage of the value” of the applicable battery critical minerals (as defined later in the bill) extracted or processed in the US or a US free-trade partner or recycled in North America, be:
* 40% for a vehicle placed in service before 1 January 2024;
* 50% for a vehicle placed in the service during calendar year 2024;
* 60% for a vehicle placed in service during calendar year 2025;
* 70% for a vehicle placed in service during calendar year 2026; and
* 80% for a vehicle placed in service after 31 December 2026.

-----------------------
 
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Throwcomputer

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“percentage of the value” of the applicable battery critical minerals (as defined later in the bill) extracted or processed in the US or a US free-trade partner or recycled in North America, be:
* 40% for a vehicle placed in service before 1 January 2024;
* 50% for a vehicle placed in the service during calendar year 2024;
* 60% for a vehicle placed in service during calendar year 2025;
* 70% for a vehicle placed in service during calendar year 2026; and
* 80% for a vehicle placed in service after 31 December 2026.

-----------------------
Well here is an interesting loophole (bolded) that they could work with to qualify despite having the mineral sources not meet the percentage requirement.

I could see them either purchasing spent cells in massive quantities anywhere in the world, shipping those spent cells to the USA for recycling to be re-processed as new batteries at Giga Texas. I could also see a more dirty underhanded move of mining the new minerals from wherever they want, then packaging them crudely into a cell solely for shipping to and "recycling" in the USA.

Or they could continue to mine 60% of the minerals anywhere and purchase in massive bulk spent cells anywhere in the world and make sure to recylce all those spent cells in the US and just need to make sure that they use 40% of each cells minerals coming from the recycling source, and slowly increasing that to match the requirements as they go up.
 

Ogre

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The Tesla Model Y AWD, Model Y AWD LR and the base Model 3 should all qualify for at least part of the credit. The Cybertruck might qualify for the entire credit.

The bill is confusing enough it’s not very clear though.

Model X, Model S, any Cybertruck over $80k, and the Model 3 LR/ Performance are over their respective price windows. As is any Model Y over $80k.
 

Ogre

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That's unclear for everyone at this point.

-Crissa
Yeah, there is a big part of this bill which is determined by the “Secretary of _____“. They might base the percentages on weight, value of raw material, or possibly even a simple count. Nobody really knows until someone in the administration makes a decision.
 


Crissa

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Yeah, there is a big part of this bill which is determined by the “Secretary of _____“. They might base the percentages on weight, value of raw material, or possibly even a simple count. Nobody really knows until someone in the administration makes a decision.
And they're required to do a bunch of fact-finding first. That's how regulations are made. Slowly.

-Crissa
 
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CybertruckAgent

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Assembly in the USA is not under question for Tesla. What is unclear is how much of the raw materials Tesla uses to create those cells meets the requirements.
And the pricing restrictions.
 

Throwcomputer

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Early reservations, don't get your hopes up about receiving the full credit in the first few years.

"No electric vehicles currently available for purchase will qualify for the full tax credit when sourcing requirements go into effect in 2023, according to the Alliance for Automotive Innovation, which represents automakers like Ford, GM, Hyundai, Toyota and Volkswagen. The new tax credit significantly reduces how many vehicles are eligible. Seventy percent of electric, hybrid and fuel cell vehicles eligible for purchase in the US are now ineligible for any credit, including partial, according to the trade group. "

https://www.cnn.com/2022/08/17/business/electric-vehicle-tax-credit-how-qualify/index.html
 

CyberGus

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Early reservations, don't get your hopes up about receiving the full credit in the first few years.
Well shit, I guess I'll just have to be content knowing that I'm saving the planet while driving an awesome wiper
 

Throwcomputer

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Well shit, I guess I'll just have to be content knowing that I'm saving the planet while driving an awesome wiper
with potentially a midgate and no side view mirrors cause they will change the mirror laws just for Tesla!

 

 
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