Insight
Inflation Reduction Act: Where could automakers shift their supply chains?
Report summary
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
- An easing of strict terms and conditions
-
WoodMac’s take
- Critical Minerals
- Battery Components
- What still needs clarification
-
The impact of the 50%+ value-added condition for critical minerals
- Lithium
- Nickel
- Graphite
- What battery components should automakers target?
-
How many EVs will be eligible for the US$7,500 credit?
- Lithium
- Nickel
- Graphite
- Other metals ex-China
- Do cathode and precursors matter?
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:
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