I'm still noticing a lot of hand-wringing about the EV credit on Twitter, so I think some examples are in order (made-up numbers on all, just as examples).
EXAMPLE 1:
Q: Tesla sells 1/3rd of its cars in the US. Of them, 70% meet the price limits. Tesla buys its nickel from...
free trade (such as Canada) and non-free trade (such as Indonesia) countries. How much of its nickel must come from the former for *100%* of what qualifying cars need to be free-trade-deal sourced?
A: 23%.
EXAMPLE 1B:
Q: What about for 40% to be free-trade-deal sourced?
A: 9%
EXAMPLE 2:
Q: Tesla's cells use $3k of critical materials. Tesla buys abundant >99% pure alumina (smelting grade: >=99,5%) from a free-trade nation, making it a critical mineral, and supplies it to a smelter for making aluminum parts for their pack.
If literally *every gram* of *every other* critical mineral was non-free-trade sourced, how much would Tesla need to pay for the bauxite to hit the 40% limit?
A: $2000
Example 2B:
Q: Name some examples of what else could Tesla do this with for things already in packs.
A: Ferrochromium for stainless steel - 60% purity; fluorspar for fluoropolymers, electrode binders, electrolyte additives, etc - 97% calcium fluoride or 99% fluorspar; manganese, for cathodes or steel alloying - manganese sulphate (any purity) or 99,7% purity; magnesium...
.. for alloys and metals - 99% purity; zinc for galvanizing, 99% purity.
Example 2C:
Q: What in the pack can you NOT have as a "critical mineral"?
A: "Not much". Iron and some alloying agents. Organic carbonate electrolytes. Copper (weirdly). Separator membranes.
Example 3:
Q: If Tesla buys $3k of foreign parts for their packs, how much do they need to sell packs for to justify an argument that at least 50% of their components' value is North America-sourced?
A: $6k, possibly plus profit, amortized capital, and/or labour.
Example 4:
Q: If Tesla's pack components are 25% North American and the total component cost is $4k, how expensive of *any* North American part *of any kind* do they have to stick in there for no good reason?
A: $1,3k.
Example 5:
Q: If Tesla 4680s use <99% purity metallic nickel or cobalt rather than battery-grade sulphates, are those critical battery minerals?
A: No.
Example 5B:
Q: If Tesla 4680s need 99,5% purity nickel, what % needs to be a critical mineral?
A: Only half.
Example 6:
Q: How could Tesla move things around lower their critical mineral count?
A: Cast/stamp a separate box. Call it all or part the BMS or thermal system. Put all your non-cell foreign components and critical minerals in it. Connect it to the pack.
Example 7:
Q: If Tesla imports critical minerals from non-free-trade countries, makes cells out of them, 20% of them fail testing, and they recycle the minerals into new cells in the US, where are those minerals considered to have come from?
A: America.
Example 7B:
Q: If Redwood imports waste cells from all over the world made from non-free-trade minerals and recycles them, where are those counted as coming from?
A: America.
Example 7C:
Q) If a smelting process that normally takes a 1% grade ore is instead fed a feedstock...
... of shredded battery packs containing 10% of the mineral, what will this do to the process's production capacity?
A: Hard to generalize, but in most cases, a roughly 10x increase would be expected.
In short... this bill is a sieve. Partly due to oversights, but partly *by design*. It's *by design* that recycled cells turn into domestic sourced materials. It's *by design* that a lot of minerals not normally associated with foreign dominance are on the list. And the even...
... if it didn't cross the authors' minds that what defines a "battery pack" is a flexbile concept, I seriously doubt they didn't consider that manufacturers would juggle their supplies to ensure that only US-market price-qualifying vehicles get the compliant-sourced supplies.
And if there's any company out there best prepared to meet this, it's obsessed-with-local-sourcing, obsessed-with-vertical-integration, critical-mineral-reducing, rapidly-iterating Tesla.
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