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    US Battery Sourcing Guidance to Cut Some EV Tax Credits: Official 2023-03-29

    Mar 28,2024 | DAXTROMNSOLAR

    The US government has issued new guidance on battery sourcing for electric vehicles (EVs), which may result in a reduction of tax credits for some vehicles. The guidance, set to take effect in 2023, requires that at least 50% of the battery components, including the active materials and cell manufacturing, be sourced from the United States or its allies in order to qualify for the full tax credits. Manufacturers who fail to meet this requirement will see a reduction in the tax credit amount based on the percentage of non-compliant components used.
    This move by the US government aims to promote domestic battery manufacturing and reduce dependence on foreign suppliers. By incentivizing manufacturers to source battery components locally, it will support the growth of the US battery industry and create jobs in the sector. However, this policy change may also lead to higher costs for manufacturers and potentially impact the affordability of EVs for consumers.
    Overall, while the US government's efforts to boost domestic battery production are commendable, it is essential to strike a balance between promoting local industry and ensuring affordable access to EVs for consumers. By implementing progressive policies that encourage local manufacturing while also considering the financial implications, it is possible to achieve both goals successfully.
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