Ford Motor Company is asking the US government to limit what it calls a “foreign entity of concern” so that more vehicles can qualify for the $7,500 electric vehicle tax credit outlined in the Inflation Reduction Act.
As it stands, the law requires that vehicles be assembled in North America, use increasing amounts of critical minerals from the US or free trade agreement countries, and battery components from North America to qualify for the total $7,500. The regulations disqualify vehicles that include any component or minerals made in “a foreign entity of concern,” which includes countries like China, Venezuela, Russia, Iran, and others.
Industry experts say the strict regulations will mean no vehicles will qualify for the full credit starting in January when the full list of regulations goes into effect.
In comments submitted to the US Department of Treasury last week, Ford said although it supports the goal of strengthening domestic and ally-based battery and critical mineral production, “an overly expansive interpretation of this provision risks undermining the very same objective by making the clean vehicle credit largely unavailable.”
Ford is asking the government to clarify what vehicles are eligible for the credit and explain how companies can prove they qualify. It also wants the law not to exclude joint ventures with non-US partners, any US-organized company regardless of its owners, and certain other non-US companies that are organized in an unlisted country if it’s less than 50% owned by a listed country. The automaker also asks for a broader interpretation of words that determine whether companies meet requirements, such as “processing” and “recycling.”
“Doing so will allow more customers to benefit from the incentive now and into the future and push automakers and suppliers to build up the supply chains that are critical to our economic and national security,” read the comments.
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