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Inflation Reduction Act: Where could automakers shift their supply chains?

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The US Treasury on March 31 released new guidance on the Inflation Reduction Act’s revamped US$7,500 EV tax credit. It provided new information around its interpretation of the mining and refining stages for the “50% of value added” test, its intention to adapt the conditions of the test through 2030 and its plan to cover countries the US doesn’t have a free trade agreement with as eligible ally-shored partners. In this article, we discuss: • Which upstream supply stages are likely to be ally-shored and/or moved out of China by US automakers and by when • Which countries, assets and companies are expected to be targeted for sourcing by US OEMs, categorised by mineral, chemical, material, and component • How upcoming rules around the Treasury’s interpretation of ‘foreign entities of concern’ will impact major upstream players with direct and indirect Chinese interests

Table of contents

Tables and charts

This report includes 9 images and tables including:

  • Sourcing requirements under the IRA
  • Critical mineral value breakdown in a battery
  • Critical mineral values being greater than the minimum value portion by year
  • Battery component value breakdown in a battery
  • Battery component values being greater than the minimum value portion by year
  • Lithium value addition by stage - mineral concentrate
  • Lithium value addition by stage - brine
  • Nickel value addition by stage
  • Graphite value addition by stage

What's included

This report contains:

  • Document

    Inflation Reduction Act: Where could automakers shift their supply chains?

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