The battery manufacturing announcements have been coming one after another—a VW cathode facility in Canada; a Tesla factory in Mexico; a Ford battery plant in Michigan.

These companies hope to take advantage of the Inflation Reduction Act’s lucrative EV tax credits:

But there’s a catch. A whole bunch of intermediate battery products don’t fit neatly into either bucket. For example, lithium gets processed into precursor cathode active material before it becomes cathode active material, the powder that actually makes it onto the factory floor of a battery manufacturer. Battery electrolytes go through multiple processing steps, too.

Until last week, suppliers of these products were left wondering: Where should we manufacture to qualify? And for which credit?

Congress had left these details up to the Treasury Department, and on Friday regulators released guidance for these intermediate products, or “constituent materials.” The new rules pleased some and angered others.

So what do the changes mean for EV supply chains? 

In this episode, Shayle talks to Sam Jaffe, our resident EV-supply-chain whisperer. He’s the vice president of Battery Storage Solutions at E Source. He’s come on the show before to talk about the holy grail of batteries and the basics of the IRA’s EV tax credits. 

This time, Sam explains the new Treasury guidance.They cover topics like:

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Catalyst is a co-production of Post Script Media and Canary Media.

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