cvalue13
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As of 1/1/23, that incremental slope begins at 40% for minerals sourcing from the US or trade-countries (and 50% for battery componentry assemblage).I thought the clause for the " source of battery minerals " was supposed to be implemented -incrementally- in the coming years to 'steer' manufactures to slowly get the minerals locally?
But completely seperate from the above, perhaps you’re also thinking of the prohibitions on either batteries whatsoever manufactured or assembled by a “foreign entity of concern,” effective with respect to vehicles placed in service after December 31, 2023, or any battery utilizing any critical minerals "extracted, processed, or recycled" by any "foreign entity of concern" which prohibition takes effect with respect to vehicles placed in service after December 31, 2024. These are complete prohibitions, with no on-ramp of %’s other than the 2023 and 2024 triggers.
FYI, a “foreign entity of concern” includes among other things, any foreign entity (company, country, or otherwise) that is "owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is a covered nation" (i.e., China, Russia, Iran, or North Korea).
These prohibitions mirror other similar trade prohibitions emanating from the national security wing of the government, rather than the IRS. And similar to how those prohibitions are monitored in other national security contexts, things can become rather cloak-and-dagger regarding details of enforcement, and far less pragmatic than say the IRS’s rule-making.
Given the breadth of Chinese (and Russian) holdings - including even fractional indirect investments in domestic companies - across the sector, I find these near-term prohibitions to be the most likely source of challenge (poison pill?) in the IRA.
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