Sen. Warnock Wants Regional Requirements for EVs, Batteries Delayed
Sen. Raphael Warnock, D-Ga., followed up on a letter asking for flexibility on electric vehicle tax credits with a bill that would phase in the sourcing and manufacturing requirements linked to credits.
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New vehicles assembled in Mexico, Canada or the U.S. would qualify for the credits, but only if their batteries and the raw materials in the batteries meet certain content thresholds aimed at reducing dependency on Chinese inputs. Huyndai EVs have good penetration in the U.S. market -- it has the fifth best-selling EVs in America in the first half of 2022 -- but they are not built in the region, and won't be until a plant opens near Savannah, Georgia, in 2025.
On Sept. 29, Warnock introduced a bill that would phase in the content requirements. "I’m focused squarely on helping Georgia car buyers save money and helping car manufacturers who do business in our state thrive. The Affordable Electric Vehicles for America Act will lower costs for Georgians and provide consumers more options when purchasing an electric vehicle, while also supporting good-paying jobs across our state and bolstering Georgia automakers like Hyundai," he said in a press release. He said he would do anything he could to get the bill into law. However, the Senate will not return until after the election in November. Warnock is considered to be the most imperiled Democratic incumbent in the Senate.
His bill would put off the content requirements until 2026 for assembly and would also put off until 2026 the requirement that no critical minerals in the battery can come from China. Many advocates of EV manufacturing and adoption say that China cannot be cut out of the supply chain by 2025, as the text now requires (see 2208040045).
The requirement that China not make any of the battery manufactured components also would be delayed by one year, to 2025. Half of the tax credit is based on the proportion of critical minerals sourced from the U.S. or countries with which the U.S. has a free trade agreement, with the initial percentage set at 40% in 2024. Warnock's bill would start the requirement in 2026, still at 40%, and increase on the same schedule as the current bill.