Tax Policy Takes the Driver’s Seat Again With New EV Credits

The Inflation Reduction Act, passed over the summer to much fanfare, carries with it some provisions for electric vehicles. Chief among them is a sourcing requirement that mandates portions of materials that go in to the batteries be extracted or processed domestically—an effort to remain competitive in what may be the next big boom.

How the bill defines the material requirements is … challenging. The tax credit is only for vehicles placed in service between the date that guidance is issued and Jan. 1, 2024, on a battery containing 40% domestically extracted or processed components. An EV battery has ...