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NYTimes
New York Times
4 Apr 2023


NextImg:How the V.P.’s Zambia Trip Could Affect Your E.V. Tax Break

Maybe you’re thinking of buying an electric vehicle. If you’re in the United States, maybe you’re counting on tax credits from the government to lower the price.

Here’s the thing. Global politics is complicating which cars will qualify for the full rebate. It has a lot to do with the stuff that goes into the batteries that power electric cars, and where it comes from.

A lot of those batteries are made in China, and a lot of the minerals that go into the batteries are mined in two countries in Africa where China has a lot of influence: Democratic Republic of Congo and Zambia. (And that explains, in part, why so many senior White House officials have been courting those countries in Africa, including Vice President Kamala Harris last week.)

The upshot: The Biden administration’s climate goal to get more Americans to drive electric is in direct tension with its diplomatic goal to reduce reliance on China.

This directly impacts how much of a tax break you can get on your next E.V. purchase. Let’s break it down.

Not all electric cars will be eligible for the full rebate.

The Internal Revenue Service spelled out last Friday the requirements for the full $7,500 tax rebate. My colleagues Ana Swanson and Jack Ewing wrote about the rules.

First, to be eligible, an electric vehicle must be assembled in the United States, Canada or Mexico.

Then there’s the car’s battery. To qualify, at least 50 percent of the battery’s components, like the cathode and anode through which current flows, must be made in North America.

The hardest part has to do with the critical minerals that go into the battery, like cobalt and copper. To qualify for the rebate, at least 40 percent of those minerals must be mined or processed in the United States or countries that have trade agreements with the United States.

That narrows the field.

In turn, that limits which cars are eligible for the tax break.

“Only a handful of vehicles are expected to qualify for the full credit,” Ana and Jack wrote, when the rules go into effect April 18.

Which cars? That will be known in a few weeks. Some General Motors models will be eligible.

Say goodbye to the base version of Tesla Model 3 if you want the full rebate. Its battery comes from China. At least for now.

Yes. It’s all about China.

The United States is keen to reduce reliance on China, which currently dominates the electric vehicle battery supply chain. China produced 75 percent of all batteries in 2021, while the United States made 7 percent, according to the International Energy Agency.

China is the world’s biggest electric vehicle battery manufacturer. It processes a lot of the minerals that go into batteries, turning the raw materials into usable battery parts. It controls cobalt and copper production in key countries, where critical minerals are abundant: the Democratic Republic of Congo, where 70 percent of the world’s cobalt is extracted, and Zambia, a major copper producer which also has cobalt reserves.

Neither country has a free-trade agreement with the United States that qualifies for the rebates. But their minerals could be processed in a country that does — Australia, for instance — and be eligible for electric vehicle tax credits. (Keep in mind that the quotas for battery minerals and components will rise in the coming years.)

Batteries are a new battleground in U.S.-China tensions.

The White House has showered these two countries with attention. In December, Secretary of State Antony J. Blinken announced a “memorandum of understanding” to help Zambia and the Democratic Republic of Congo create an electric vehicle battery supply chain. “The plan to develop an electric battery supply chain opens the door for U.S. and like-minded investment to keep more value added in Africa,” Blinken said.

Treasury Secretary Janet Yellen went to Zambia in January. Vice President Harris was there last weekend as part of her three nation tour of Africa.

All that diplomatic courting is designed to counter China’s influence over critical minerals in the region. But to work, private U.S. investors have to step up to build that supply chain in Zambia and Congo.

Meanwhile, the Biden administration is wooing lots of companies to build batteries in the United States, especially near auto plants. The Inflation Reduction Act is showering manufacturers with subsidies. It’s all designed to sharply reduce the climate pollution that comes from gas guzzling cars and get more U.S.-made electric vehicles on the road. Transportation accounts for over a fourth of U.S. greenhouse gas emissions.

But until the United States makes enough electric car batteries at home, its climate goals are likely to be slowed by its feud with China.


Essential news from The Times

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Juvenile fall-run Chinook salmon at the Coleman National Fish Hatchery in Anderson, Calif.Credit...Max Whittaker for The New York Times

Dwindling salmon: Climate change and heavily engineered waterways in California have led to an alarming decline in salmon stocks. A fishing ban is expected.

Soaring oil prices: Saudi Arabia, Russia and their oil-producing allies at OPEC Plus announced on Sunday that they would cut production in an apparent effort to increase prices.

Tough choices: New sea walls can shield Venice from increasingly frequent floods. But deploying them too much may seal the city from the sea and render its lagoon a fetid swamp.

Ohio derailment: Workers say Norfolk Southern, the owner of the train that spilled toxic chemicals, put profits over safety. The Justice Department has sued Norfolk for it.

Petro power: Saudi Arabia used to send money to poor countries in the Middle East with few strings attached. Its new strategy is to leverage its economic power for profit and influence.

Bat sprinklers: High temperature are deadly to Melbourne’s bats. The solution? Give them a shower.


From the Opinion section

Farmer rebellion: Dutch farmers are protesting their government’s plans to cut nitrogen emissions. For Europe, the backlash might just be beginning, writes Ben Coates.


From outside The Times

  • A new study showed that melting Antarctic ice could severely slow ocean currents in the next decades. In an interview with CNN, one of the authors explained the consequences.

  • Students and colleagues are questioning a Harvard law professor’s links to the oil industry, The Guardian reported. She just received a grant to investigate corporate climate pledges.

  • Bloomberg profiled Sultan Al Jaber, the oil executive who will lead COP28, this year’s global climate summit.

  • The 19th investigated why women are less likely to buy electric cars than men. Concerns over safety in charging stations and affordability may be among the reasons.


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Times photographer Erin Schaff joined a five-hour data-collection flight with the National Oceanic and Atmospheric Administration.Credit...Erin Schaff/The New York Times

Before you go: California’s record snowpack, up close

Snow has packed California’s Sierra Nevada in quantities that parts of the area have never previously recorded. Knowing just how much snow has blanketed its peaks and mountainsides is critical to predicting what will happen when it melts. Officials are using sensors in low-flying airplanes to figure out the answer. Erin Schaff, a photographer with the Times, joined one of the flights.


Thanks for being a subscriber. We’ll be back on Friday.

Manuela Andreoni, Claire O’Neill and Sarah Graham contributed to Climate Forward. Read past editions of the newsletter here.

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Reach us at climateforward@nytimes.com. We read every message, and reply to many!

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