2024 Tax Credit Law to Do Harm EV & Related Technology Adoption?

Beginning in 2025, eligibility will be restricted if the battery contains either components or critical minerals from a FEOC under the language of the IRA.

*“We’re talking about companies under the control or jurisdiction of the government of a quote unquote, covered nation, which in this instance means North Korea, China, Russia or Iran, as written in the statute,” Deputy Energy Secretary David Turk told reporters on a call. *

To be considered an FEOC, an entity must be incorporated in, headquartered in and operating within one of the covered nations. The government of that nation must also directly or indirectly control at least 25 percent of a company’s voting or equity interests or board seats, regardless of the physical location where the company operates, and any companies that operate outside a covered nation but contract with or license technology from it must “retain certain rights over their operations for their vehicles to qualify,” Turk said.

“By establishing ‘glass barriers’, the U.S. is doing more harm than good to the development of EV technologies and the industry more broadly,” He said, warning that the plans would “seriously disrupt international trade and investment”.

China accounts for almost two-thirds of the world’s lithium processing capacity and 75% of its cobalt capacity, both of which are used in battery manufacturing.

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