The U.S. Senate announced on April 29 that the One Big Beautiful Bill Act will preserve 45X advanced manufacturing tax credits for battery producers, while the Connected Vehicle Security Act aims to ban Chinese vehicle technologies from the American market, according to Congress.gov.
These legislative actions are significant for domestic battery manufacturers and the automotive industry, as they address both economic incentives and national security concerns related to foreign technology in vehicles.
The legislation provides a credit of $35 per kilowatt-hour for battery cells and $10 per kilowatt-hour for modules produced in the United States, the bill said. Battery manufacturers must meet domestic content requirements of 60 percent, increasing to 85 percent by 2030. The credits apply to facilities using technology licensed from foreign entities under an effective control standard according to Congress.gov.
Senators Moreno and Slotkin introduced the Connected Vehicle Security Act to ban Chinese-manufactured vehicles and connected components from the American market, according to a Senate press release. Ford Motor Company endorsed that legislation while licensing battery technology from CATL, a company the Department of Defense designated as a Chinese military entity under Section 1260H according to a Senate press release.
Ford invested between $2.5 billion and $3 billion in BlueOval Battery Park Michigan using lithium iron phosphate technology licensed from CATL. The facility has a capacity of 20 gigawatt-hours per year and could qualify for tens of millions of dollars annually in 45X production credits under the revised legislation Bridge Michigan reported.
The 45X advanced manufacturing production credit was originally enacted as part of the Inflation Reduction Act of 2022 to incentivize domestic production of battery cells, modules, and critical minerals. The One Big Beautiful Bill Act modified the credit to restrict manufacturers receiving material assistance from prohibited foreign entities.
