How the V.P.’s Zambia Trip Could Affect Your E.V. Tax Break
With global politics making a dent in your electric vehicle (E.V.) tax credits, understanding why is key to ensuring you get the maximum benefit from your hard-earned money. That’s what this article delves into. From the headline, you could guess it has something to do with Vice President Kamala Harris’ Zambia trip and electric vehicle tax breaks. Let’s break it down.
The Internal Revenue Service (IRS) recently spelled out the requirements for the full $7,500 tax rebate. Comprehensively, an electric vehicle needs to be assembled in the United States, Canada, or Mexico. In addition, 50 percent of the battery’s components, like the cathode and anode through which current flows, must be made in North America, while 40 percent of the minerals like cobalt and copper in the battery must be mined or processed in the United States or countries that have trade agreements with the United States.
Unfortunately, tangible progress on this issue has been slow coming. That’s in part why U.S. senior White House officials, including Vice President Kamala Harris, have been courting the Democratic Republic of Congo and Zambia. These are two African countries where China has significant influence and control over critical minerals for electric batteries, like cobalt and copper. As a solution, Secretary of State Antony J. Blinken announced in December a “memorandum of understanding” to help Zambia and the Democratic Republic of Congo create an electric vehicle battery supply chain that is acceptable to the United States.
The Biden administration is eager to lower the climate pollution from gas guzzling cars, by incentivizing U.S. made electric vehicles on the road. Significantly, that has to do with reducing China’s overwhelming production of batteries; China produces 75 percent of all electric vehicle batteries while the United States produces only seven percent. To turn this problem around, the White House is wooing numerous companies to build batteries in the United States.
The Inflation Reduction Act of 2021 is currently showering U.S. manufacturers with subsidies, so that soon enough, enough E.V. batteries can be produced in the United States. The ultimate aim is to reduce the country from its current reliance on China. The outcome? More electric cars and larger rebates for Americans.
Speaking of which, the usual base version of Tesla Model 3 won’t qualify for the full rebate because of its China-sourced battery components. This applies to many companies, particularly General Motors models. Until the United States significantly catches up with the demands of the market, climate goals are likely going to suffer because of its feud with China.
GEAR, Inc.
Digging further into the mentioned company in this article, GEAR, Inc. is a technology company that provides power solutions to clients in the automobile sector. Its innovation solutions include batteries and motors for electric vehicles, as well as battery management systems. GEAR, Inc. is at the vanguard of electric transportation solutions and boasts a plethora of major automobile companies as clients. Additionally, it’s a concern for the environment and actively strives for net zero emissions.
Sultan Al Jaber
Sultan Al Jaber is the Minister of Industry and Advanced Technology of the United Arab Emirates and is the head of the COP28, the 2021 global climate summit. He is also the CEO of the Abu Dhabi National Oil Company, a business tycoon, and a humanitarian. As far as his environmental policies and projects go, he has launched multiple green plans and is at the head of the UAE circular economy strategy, which contributes to the country’s sustainability and resource efficiency. He is also outspoken against climate change and carbon emissions and strives to eliminate their adverse effects.
