If US-built cars have to use free-trade-country batteries, I'm sure imports will, too. Of the battery-sourcing requirement, Mary Barra
said: "We think, out of the gate, we're going to be eligible for the $3,750, and we'll ramp to have full qualification in the next two to three years, getting up to the $7,500. It just takes a couple of years to ramp up based on our expectations with the supply moves that we've already made."
I don't know about Mary's (and the GM law department's) statement, but to get some better clarity on this issue for me I went to the statutory language itself (P.L. 117-169) (quoted in part below, but emphasis supplied). While I had to read this several times, it appears to me that the actual statute only requires that a variable % of the value of battery "
critical minerals" be "extracted or processed" in the US OR in any country with which the US has a free trade agreement OR is recycled somewhere in North America (Canada, US, Mexico) BUT that a variable % of the "value" of battery "components" must come from North America only (no reference to free trade agreement countries). But the "components" minimum requirements are based solely on a "value" hurdle that means the battery itself can be assembled in any country so long as enough "value" of its components comes from North America.
So, it seems to me that without detailed information about the relative "value" of subcomponents in the Chinese CATL batteries, it is impossible to say whether or not they might pose a hurdle in the EV using them qualifying for the US tax credits in whole or in part. That said, I would guess it is highly likely that today the CATL batteries have a very high percentage (if not 100%) of Chinese-source value, and you are highly likely to be spot on right for the existing, real-world facts.
"(e) Critical mineral and battery component requirements
"(1) Critical minerals requirement
"(A) In general
"The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the applicable critical minerals (as defined in section 45X(c)(6)) contained in such battery that were-
"(i) extracted or processed-
"(I) in the United States, or
"(II) in any country with which the United States has a free trade agreement in effect, or
"(ii) recycled in North America,
is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).
"(B) Applicable percentage
"For purposes of subparagraph (A), the applicable percentage shall be-
"(i) in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before January 1, 2024, 40 percent,
"(ii) in the case of a vehicle placed in service during calendar year 2024, 50 percent,
"(iii) in the case of a vehicle placed in service during calendar year 2025, 60 percent,
"(iv) in the case of a vehicle placed in service during calendar year 2026, 70 percent, and
"(v) in the case of a vehicle placed in service after December 31, 2026, 80 percent.
"(2) Battery components
"(A) In general
"The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the components contained in such battery that were manufactured or assembled in North America is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).
"(B) Applicable percentage
"For purposes of subparagraph (A), the applicable percentage shall be-
"(i) in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before January 1, 2024, 50 percent,
"(ii) in the case of a vehicle placed in service during calendar year 2024 or 2025, 60 percent,
"(iii) in the case of a vehicle placed in service during calendar year 2026, 70 percent,
"(iv) in the case of a vehicle placed in service during calendar year 2027, 80 percent,
"(v) in the case of a vehicle placed in service during calendar year 2028, 90 percent,
"(vi) in the case of a vehicle placed in service after December 31, 2028, 100 percent.