GETTING TO KNOW YOUR PRODUCTS BETTER: Critical Minerals in Digital EV Passports
EV component passport
Brands need stronger supply chain governance that easily generates ESG data proofs. Digital EV Battery/ EV component passports help automakers to easily qualify their cars to get the full amount of the new US Inflation Reduction Act's tax credits.
Clean Vehicle Tax Credits
The US Inflation Reduction Tax Act of August 2022 offers an array of environmental and sourcing tax credits to US companies and by extension their international suppliers operating in countries under treaty agreements.
Automakers are required to show proof of the provenance, purity, supply and production journey of regulated materials (e.g., cobalt, graphite, lithium, manganese, and nickel) in their EV battery to qualify each manufactured vehicle for part of the clean vehicle tax credits.
Peer Ledger’s MIMOSI Connect ESG Platform can generate the required digital battery and EV components passports for automakers, their suppliers, and buyers of eligible commercial EV vehicles to benefit from the variety of IRA tax credits. Recycling and disposal events are recorded on the products’ digital passports.
The IRA implements tax credits on a sliding scale. For EVs manufactured in 2023, tax credits are based on 40% of materials being sourced and produced in the US and its IRA-treaty countries, and for 50% of the value of EV battery components manufactured or assembled in North America. These two percentages increase year over year as shown below.
