Is the Inflation Reduction Act a win for EVs and batteries?

Don’t miss our live episode of Climavores in New York City on October 20! Sign up here for a night of live audio and networking with top voices in climate journalism. Depending on which headlines you read, the Inflation Reduction Act (IRA) will either hurt U.S. electric vehicle sales by replacing existing tax credits with complicated new ones or build out a North American battery supply chain and rev up EV sales. So which is it? In this episode, Shayle talks to Sam Jaffe, vice president of battery solutions at E-Source, about the key provisions of the IRA’s EV and battery tax credits. Sam explains how the IRA will spur a North American EV battery supply chain in the long run but will also create winners and losers along the way. There’s a $30 billion pot of money for various tax credits and limited time to make use of them. Who will get to it first? There are already some early movers. Sam explains the key provisions: The EV components tax credit reduces the cost of EVs whose batteries contain materials assembled in the U.S. or its free-trade partner countries. This includes electrodes, electrolyte components and cells. The strategic minerals tax credit reduces the cost of EVs whose batteries contain minerals mined and processed in the U.S. or its free-trade partner countries. These minerals include lithium, cobalt, and rare earth metals, among others. The 45X advanced manufacturing production credit reduces the cost of making batteries in the U.S. Certain credits ratchet up the percentage of materials required to qualify over several years. So once an EV model qualifies, it will have to maintain eligibility by getting a larger and larger share of its components and minerals from approved countries. They also cover which part of the battery industry will benefit more– the EV battery side or the stationary storage side. And Sam explains why he’s paying attention to the Treasury Department’s forthcoming guidance on the tax credits. Resources: The New York Times: For Electric Vehicle Makers, Winners and Losers in Climate Bill Canary Media: Private-sector reactions to the Inflation Reduction Act Canary Media: 6 clean energy companies that are ramping up US manufacturing Catalyst is a co-production of Post Script Media and Canary Media. Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you're a startup, investor, enterprise, or innovation ecosystem that's creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more. Solar Power International and Energy Storage International are returning in-person this year as part of RE+. Come join everyone in Anaheim for the largest, B2B clean energy event in North America. Catalyst listeners can receive 15% off a full conference, non-member pass using promo code CANARY15. Register here.