This is part 2 of Where is the Data - EVs elaborates how the VW iD.4 transitioned to a made in the USA designation to capture US tax benefits, despite a few setbacks. (Find part 1 at www.ekalore.com/ars )
VW Group’s iD.4 products were primarily supplied EV batteries from a Korean-owned plant (SK Innovation) in Georgia. The plant was initiated in 2020, with startup in 2021 and production levels in 2022. The SK Innovation plant was built to supply EV batteries for the VW iD.4 platform lines and the Ford F-150 platform line. The batteries were sized for 62KWH for use in the iD.4. Additional batteries from LG Energy Solution were initially for a higher capacity ‘trim’ of 82KWH. A bitter set of USA legal actions between LG Energy and SK Innovation threatened to shut down all supplies from SK Innovation to Ford and VW. This was cleared up in early 2021 with a large settlement (two trillion KRwon$) between SK Innovation and LG Energy Solution. The complex solution meant that VW did not have the data to submit to the USA Federal Government supporting their compliance and conformance claims about iD.4 EV batteries. No data – no tax incentives.
The data flows for consumers and manufacturers alike are complicated. The “Monroney Sticker” (known to vehicle buyers in the USA as the MSRP “window sticker”) is a legally required printout (normally pasted on the rear driver window of a new vehicle) detailing where the final assembly of the vehicle was performed, what the battery rating for the vehicle was, and related consumer tax incentive eligibility data. These, and related manufacturing information, must be filed with the USA Federal Government along with other data prior to a vehicle sale or subsequent, getting a tax incentive.
VW Group did manage to get onto the USA Federal Government list telling vehicle buying consumers that the iD.4 platforms (in multiple models) was eligible for the tax incentives. Due to a complex ‘supply chain’ of data, VW would have been excluded – and sales reduced – without suppliers being able to provide data documentation needed for the Government filings.
How complicated are these government data files? Here’s a brief passage from one of the IRS documents published as a “White Paper”:
“The third step would calculate the percentage of the value of qualifying critical minerals contained in a battery. To determine this percentage, the sum of the values of all qualifying critical minerals (determined separately for each procurement chain) contained in the battery is divided by the sum of the values of all critical minerals contained in the battery. To determine the value of these critical minerals, the manufacturer could select any date that is after the final processing or recycling step for the critical minerals, but that date must be uniformly applied for all critical minerals contained in the battery. A manufacturer could average this percentage calculation over a period of time (e.g., year, quarter, or month) with respect to vehicles from the same model line, plant, class, or some combination thereof, with final assembly within North America. If the percentage that results from this third step is equal to or greater than 40 percent […]” Source: https://home.treasury.gov/system/files/136/30DWhite-Paper.pdf
These data requirements go all the way down the supply chain. If your enterprise’s material, or component element, goes into the final electric vehicle battery, then you’ll likely have to provide a certain set of data along with your products – no data, and there probably isn’t a supply chain relationship. The global energy transformation will require a high percentage of industry sectors and supply chains to have these ‘supply chains of data.’ A likely size looks to be 15% of the global economies – large enough to touch enterprises everywhere and of all sizes.
EkaLore has developed expertise and industry-specific knowledge over a long period of time about data collected by enterprises, on products, on services, and on the process of getting those to enterprise customers – individuals or other enterprises. You can find more posts in the Where is the Data Series at www.ekalore.com/ars
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