WASHINGTON (Reuters) – Ford Motor Co said on Thursday the U.S. Treasury Department should limit the definition of a “foreign entity of concern” to make sure more electric vehicles can qualify for as much as $7,500 in consumer tax credits.
In August, Congress passed the $430 billion Inflation Reduction Act (IRA) laws to restructure EV tax credits and, will, in the approaching years, bar credits if any EV battery components were manufactured or assembled by a “foreign entity of concern” or if batteries contain critical minerals extracted, processed, or recycled by a foreign entity of concern.
The principles were aimed toward weaning the USA off the Chinese battery supply chain.
“While Ford appreciates and supports the general objective of the law to bolster the localization of battery production and important mineral mining and processing within the U.S. and with our trading partners and allies, a very expansive interpretation of this provision risks undermining that exact same objective by making the clean vehicle credit largely unavailable,” the automaker said in comments filed with Treasury and sent to media.
Ford said it wants the Biden administration to make sure joint ventures in critical mineral extraction, processing, or recycling “is not going to cause vehicles to be routinely excluded.” The corporate also said any U.S.-organized company, no matter its owners, mustn’t trigger the foreign entity rules.
Ford also said automakers need a “de minimis standard” as a part of foreign entity reporting requirements “in order that unintended traces of critical minerals don’t disqualify consumers from getting a tax credit.”
Ford said in July it planned to import lower-cost 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 utilized in batteries sourced from North America or American allies by 2024, rising to 80% by the tip of 2026. The foreign entity restrictions apply to vehicle battery components starting in 2024 and battery minerals starting in 2025.
(Reporting by David Shepardson; Editing by Muralikumar Anantharaman)
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