“To amend the Internal Revenue Code of 1986 to modify the advanced manufacturing credit with respect to the production of battery components.”
No CRS summary available for this bill.
This section modifies the advanced manufacturing production credit under IRC Section 45X for battery-related eligible components, effective for components produced and sold after December 31, 2025, by (1) increasing the credit rate for electrode active materials to 25 percent (from 10 percent); (2) providing that production costs for electrode active materials include raw material costs, such as extraction from geological sources or waste products; (3) requiring that the value of applicable critical minerals in qualifying battery components be at least 70 percent in 2026 and 80 percent thereafter from extraction/processing in the United States or a free trade agreement country or recycling in North America; (4) requiring that the value of constituent elements, materials, and subcomponents in qualifying battery components be at least 70 percent North American-sourced in 2026, 80 percent in 2027, 90 percent in 2028, and 100 percent thereafter; (5) excluding from eligibility any qualifying battery component involving applicable critical minerals or subcomponents extracted, processed, recycled, produced, manufactured, or assembled by a foreign entity of concern (as defined in 42 U.S.C. 18741(a)(5), including indirectly owned entities); (6) expanding the definition of electrode active materials to include electrode active precursor materials (e.g., cobalt sulfate, lithium hydroxide), binders, and solid state electrolytes; and (7) adding silicon used in battery anodes to the list of applicable critical minerals. (As background, the Section 45X credit incentivizes U.S. production of components for electric vehicles and energy storage. Thus, these changes promote domestic and allied sourcing while restricting reliance on adversaries.)