In a battle between GM and Ford, $7,500 in tax credits are at stake depending on Biden’s definition of “foreign entity of concern.” The exclusion aims to reduce US reliance on Chinese batteries and materials to make them.
Big 3 Intra-Battle Over Batteries
The Wall Street Journal reports a Ford vs. GM Feud Could Shape the Future of EVs in America.
In June, Ford Chief Executive Jim Farley pitched visiting members of Congress on the company’s plans for a $3.5 billion battery factory. Using Chinese battery technology at the Michigan plant, he argued, was a smart way for the U.S. to catch up with China’s expertise.
Later the same day at the General Motors CEO Mary Barra and her team had a different message for the lawmakers: Ford’s plans could be the harbinger of Chinese domination of U.S. car manufacturing.
Ford, with its plans to license Chinese technology to make cheaper, iron-based batteries in Michigan, has lobbied for a more flexible interpretation of the “foreign entity” rule. If its planned batteries aren’t eligible for the car-buyer subsidy, Ford executives have indicated they could scale back the investment; on Monday, the company paused construction of the new battery plant.
“This is not about GM vs. Ford,” a GM spokeswoman said. She said GM wants clarity and for the rules to follow the intent of the Inflation Reduction Act, which created the new tax-credit requirements.
Robbie Orvis, a senior director at Energy Innovation, a think tank on climate issues, said the tax credit—and the “foreign entity of concern” rule—will shape how many electric cars are sold in the U.S. in the next 10 years.
Ford hoped to get ahead by licensing technology from China’s Contemporary Amperex Technology Co. Ltd., known as CATL, to make lithium-iron-phosphate batteries at an industrial scale in the U.S. for the first time. They are much cheaper than other alternatives, reducing the production cost of the car.
Biden’s Self-Made Dilemma
Biden is guaranteed to upset someone. That’s what happens when you interfere in the free markets, taking sides.
Congressional members from Michigan have lined up behind GM. So did Senator Joe Manchin.
The infrastructure isn’t ready in either case, and inflation is sure to rise.
What About Materials?
Compounding the issue, “foreign entity of concern” also applies to the materials that go into the batteries.
Not only will Ford pay royalties to China for the battery technology, a strict definition of “foreign entity of concern” should apply to both GM and Ford over the minerals needed.
‘Land Grab’ for Lithium Just Getting Started
On January 31, CNBC reported ‘Land Grab’ for Lithium Just Getting Started with GM Deal
Key Points
- General Motors’ announcement on Tuesday that it plans to invest $650 million into Lithium Americas to secure access to lithium is the first of what surely will be more to come, according to Simon Moores, the CEO of Benchmark Mineral Intelligence.
- “EV companies, especially the auto majors, have learnt the hard way over the last five years that scaling batteries — giga factories — is much easier and quicker than scaling mining,” Moores said.
- It takes two years or more to build a giga factory and 10 years-plus to finance and build a lithium mine, Moores said.
Does the 10 years to build a mine factor in delays caused by clean energy NIMBY hypocrites who will fight new mines every step of the way?
Regardless, assume a giga factory is up and running in two years. Where precisely are the refined minerals for that giga factory coming from?
Once again, subsidies hinge on the definition of “foreign entity of concern”.
And where is the giga factory located. Will the giga factory use union labor driving up the cost?
What About Consumer Concerns?
Lost in the battle over “foreign entity of concern” ought to be the concern “how many people don’t want EVs crammed down their throats?”
No one is taking legitimate consumer concerns like price, insurance, number of reliable chargers, charging times, inflation, and even hurricane evacuations into proper consideration.
Are You Concerned?
You should be. Concern is the word of the day starting with government mandated EV solutions, regulations that will ban gas stoves, looting, and piss poor public education in big cities.
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