Code of Federal Regulations · Section

§ 1.30D-2 — d-2 Definitions For Purposes Of Section 30d

26 C.F.R. § 1.30D-2

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(a) In general. The definitions in this section apply for purposes of section 30D of the Internal Revenue Code (Code) and the section 30D regulations.

(b) Definitions—(1) Advance payment program. Advance payment program means advance payment program as defined in § 1.30D-5(b)(1).

(2) Applicable critical mineral—(i) In general. Applicable critical mineral means an applicable critical mineral as defined in section 45X(c)(6) of the Code. The requirements of §§ 1.30D-3(a) and 1.30D-6 with respect to an applicable critical mineral take into account each step of extraction, processing, or recycling through the step in which such mineral is processed or recycled into a constituent material, even if the mineral is not in a form listed in section 45X(c)(6) at every step of production. However, an applicable critical mineral is disregarded for purposes of the requirements of §§ 1.30D-3(a) and 1.30D-6 if it is fully consumed in the production of the constituent material or battery component and no longer remains in any form in the battery.

(ii) Example: Form of applicable critical mineral. Mineral Y is extracted and is intended to be incorporated into the battery of an electric vehicle. Mineral Y is not in a form listed in section 45X(c)(6) at the time of such extraction, but subsequently it is refined into an applicable critical mineral form listed in section 45X(c)(6). Both the extraction and processing are taken into account for purposes of the requirements of §§ 1.30D-3(a) and 1.30D-6.

(3) Assembly. Assembly, with respect to battery components, means the process of combining battery components into battery cells and battery modules.

(4) Associated constituent material. Associated constituent material, with respect to an applicable critical mineral, means a constituent material that has been processed or recycled from such mineral into the constituent material with which it is associated, even if that processing or recycling transformed such mineral into a form not listed in section 45X(c)(6).

(5) Battery. Battery, for purposes of a new clean vehicle, means a collection of one or more battery modules, each of which has two or more electrically configured battery cells in series or parallel, to create voltage or current. The term battery does not include items such as thermal management systems or other parts of a battery cell or module that do not directly contribute to the electrochemical storage of energy within the battery, such as battery cell cases, cans, or pouches.

(6) Battery cell. Battery cell means a combination of battery components (other than battery cells) capable of electrochemically storing energy from which the electric motor of a new clean vehicle draws electricity.

(7) Battery cell production facility. Battery cell production facility means a facility in which battery cells are manufactured or assembled.

(8) Battery component. Battery component means a component that forms part of a clean vehicle battery and that is manufactured or assembled from one or more components or battery materials that are combined through industrial, chemical, and physical assembly steps. Battery components may include, but are not limited to, a cathode electrode, anode electrode, solid metal electrode, coated separator, liquid electrolyte, solid state electrolyte, battery cell, and battery module.

(9) Battery materials. Battery materials means direct and indirect inputs to battery components that are produced through processing rather than through manufacturing or assembly. Battery materials are not considered a type of battery component, although battery materials may be manufactured or assembled into battery components. The three categories of battery materials are applicable critical minerals, constituent materials, and battery materials without applicable critical minerals. Examples of battery materials that may or may not contain applicable critical minerals include a separator base film (if not manufactured or assembled) and separator coating. Examples of battery materials without applicable critical minerals include conductive additives, copper foils prior to graphite deposition, and electrolyte solvents.

(10) Clean vehicle battery. Clean vehicle battery, with respect to a new clean vehicle, means the battery from which the electric motor of the vehicle draws electricity to propel such vehicle.

(11) Compliant-battery ledger. A compliant-battery ledger, for a qualified manufacturer for a calendar year, is a ledger established under the rules of § 1.30D-6(d) that tracks the number of available FEOC-compliant batteries for such calendar year.

(12) Constituent materials. Constituent materials means battery materials that contain applicable critical minerals. Constituent materials may include, but are not limited to, powders of cathode active materials, powders of anode active materials, foils, metals for solid electrodes, binders, electrolyte salts, and electrolyte additives, as required for a battery cell. Battery materials without applicable critical minerals are not constituent materials.

(13) Country with which the United States has a free trade agreement in effect—(i) In general. The term country with which the United States has a free trade agreement in effect means any of those countries identified in paragraph (b)(13)(ii) of this section or that the Secretary of the Treasury or her delegate (Secretary) may identify in the future. The criteria the Secretary will consider in determining whether to identify a country under this paragraph (b)(13) include whether an agreement between the United States and that country, as to the critical minerals contained in clean vehicle batteries or more generally, and in the context of the overall commercial and economic relationship between that country and the United States:

(A) Reduces or eliminates trade barriers on a preferential basis;

(B) Commits the parties to refrain from imposing new trade barriers;

(C) Establishes high-standard disciplines in key areas affecting trade (such as core labor and environmental protections); and/or

(D) Reduces or eliminates restrictions on exports or commits the parties to refrain from imposing such restrictions.

(ii) Free trade agreements in effect. The countries with which the United States currently has free trade agreements in effect are: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Japan, Jordan, South Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore.

(iii) Updates. The list of countries in paragraph (b)(13)(ii) of this section may be revised and updated through guidance published in the Federal Register or in the Internal Revenue Bulletin (see § 601.601 of this chapter).

(14) Credit transfer election. Credit transfer election means credit transfer election as defined in § 1.30D-5(b)(2).

(15) Dealer. Dealer means dealer as defined in § 1.30D-5(b)(3).

(16) Dealer tax compliance. Dealer tax compliance means dealer tax compliance as defined in § 1.30D-5(b)(4).

(17) Depreciable vehicle. Depreciable vehicle means a vehicle of a character subject to an allowance for depreciation.

(18) Electing taxpayer. Electing taxpayer means electing taxpayer as defined in § 1.30D-5(b)(5).

(19) Eligible entity. Eligible entity means eligible entity as defined in § 1.30D-5(b)(6).

(20) Excessive payment. Excessive payment means excessive payment as defined in § 1.30D-5(g)(2)(iii).

(21) Extraction. Extraction means the activities performed to harvest minerals or natural resources from the ground or from a body of water. Extraction includes, but is not limited to, operating equipment to harvest minerals or natural resources from mines and wells and the physical processes involved in refining. Extraction also includes operating equipment to extract minerals or natural resources from the waste or residue of prior extraction, including crude oil extraction to the extent that processes applied to that crude oil yield an applicable critical mineral as a byproduct. Extraction concludes when activities are performed to convert raw mined or harvested products or raw well effluent to substances that can be readily transported or stored for direct use in critical mineral processing. Extraction does not include activities that begin with a recyclable commodity (as such activities are recycling). Extraction does not include the chemical and thermal processes involved in refining.

(22) FEOC-compliant. FEOC-compliant means in compliance with the applicable excluded entity requirement under section 30D(d)(7). In particular—

(i) A battery component (other than a battery cell), with respect to a new clean vehicle placed in service after December 31, 2023, is FEOC-compliant if it is not manufactured or assembled by a FEOC;

(ii) An applicable critical mineral, with respect to a new clean vehicle placed in service after December 31, 2024, is FEOC-compliant if it is not extracted, processed, or recycled by a FEOC;

(iii) A battery cell, with respect to a new clean vehicle placed in service after December 31, 2023, and before January 1, 2025, is FEOC-compliant if it is not manufactured or assembled by a FEOC and it contains only FEOC-compliant battery components;

(iv) A battery cell, with respect to a new clean vehicle placed in service after December 31, 2024, is FEOC-compliant if it is not manufactured or assembled by a FEOC and it contains only FEOC-compliant battery components and FEOC-compliant applicable critical minerals; and

(v) A clean vehicle battery, with respect to a new clean vehicle placed in service after December 31, 2023, is FEOC-compliant if it contains only FEOC-compliant battery components (other than battery cells) and FEOC-compliant battery cells (as described in paragraph (b)(22)(iii) or (iv) of this section, as applicable).

(23) Final assembly. Final assembly means the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle. To establish where final assembly of a new clean vehicle occurred for purposes of the requirement in section 30D(d)(1)(G) that final assembly of a new clean vehicle occur within North America, the taxpayer may rely on the following information:

(i) The vehicle's plant of manufacture as reported in the vehicle identification number pursuant to 49 CFR 565; or

(ii) The final assembly point reported on the label affixed to the vehicle as described in 49 CFR 583.5(a)(3).

(24) Foreign entity of concern. Foreign entity of concern (FEOC) has the meaning provided in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5)) and guidance promulgated thereunder by the Department of Energy (DOE).

(25) Impracticable-to-trace battery materials—(i) In general. Impracticable-to-trace battery materials means specifically identified, low-value battery materials that originate from multiple sources and are commingled during refining, processing, or other production processes by suppliers to such a degree that the qualified manufacturer cannot, due to current industry practice, feasibly determine and attest to the origin of such battery materials. For this purpose, impracticable-to-trace battery materials are those that have low value compared to the total value of the clean vehicle battery.

(ii) Identified impracticable-to-trace battery materials. Identified impracticable-to-trace battery materials means applicable critical minerals in the following circumstances: graphite contained in anode materials, and applicable critical minerals contained in electrolyte salts, electrolyte binders, or electrolyte additives.

(26) Incentive. Incentive means incentive as defined in § 1.30D-5(b)(7).

(27) Incremental value. Incremental value means incremental value as defined in § 1.30D-3(c)(2)(i).

(28) Manufacturer—(i) In general. A manufacturer means any manufacturer within the meaning of the regulations prescribed by the Administrator of the Environmental Protection Agency (EPA) for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.) and as defined in 42 U.S.C. 7550(1). Except as provided in paragraph (b)(28)(ii) of this section, if multiple manufacturers are involved in the production of a vehicle, the requirements of section 30D(d)(3) must be met by the manufacturer that satisfies the reporting requirements of the greenhouse gas emissions standards set by the EPA under the Clean Air Act (42 U.S.C. 7521 et seq.) for the subject vehicle.

(ii) Modification of a new motor vehicle. (A) If a manufacturer modifies a new motor vehicle (as defined in 42 U.S.C. 7550(3)) that does not satisfy the requirements of section 30D(d)(1)(F) or (d)(6) so that the new motor vehicle, after modification, does satisfy such requirements, then such manufacturer may satisfy the requirements of section 30D(d)(3) if the modification occurred prior to the new motor vehicle being placed in service.

(B) If a manufacturer modifies a new motor vehicle (as defined in 42 U.S.C. 7550(3)) that does not satisfy the requirements of 45W(c)(3) so that the new motor vehicle, after modification, does satisfy such requirements, then such manufacturer may satisfy the requirements of 30D(d)(3) if the modification occurred prior to the new motor vehicle being placed in service.

(29) Manufacturer's suggested retail price—(i) In general. Manufacturer's suggested retail price means the sum of the retail price and the retail delivered price (as defined in paragraphs (b)(29)(ii) and (iii) of this section) as reported on the label that is affixed to the windshield or side window of the vehicle, as described in 15 U.S.C. 1232.

(ii) Retail price. Retail price, for purposes of paragraph (b)(29)(i) of this section, means the retail price of the automobile suggested by the manufacturer as described in 15 U.S.C. 1232(f)(1).

(iii) Retail delivered price. Retail delivered price, for purposes of paragraph (b)(29)(i) of this section, means the retail delivered price suggested by the manufacturer for each accessory or item of optional equipment physically attached to such automobile at the time of its delivery to the dealer that is not included within the price of such automobile as stated pursuant to 15 U.S.C. 1232(f)(1), as described in 15 U.S.C. 1232(f)(2).

(30) Manufacturing. Manufacturing, with respect to a battery component, means the industrial and chemical steps taken to produce a battery component.

(31) Modified adjusted gross income—(i) Individuals. Modified adjusted gross income, in the case of an individual, means adjusted gross income (as defined in section 62 of the Code) increased by any amount excluded from gross income under section 911, 931, or 933 of the Code.

(ii) Estates and trusts. Modified adjusted gross income, in the case of an estate or non-grantor trust, means adjusted gross income (as defined in section 67(e) of the Code).

(32) New clean vehicle. New clean vehicle means a vehicle that meets the requirements described in section 30D(d). Vehicles that may qualify as new clean vehicles include battery electric vehicles, plug-in hybrid electric vehicles, fuel cell motor vehicles, and plug-in hybrid fuel cell motor vehicles. A vehicle does not meet the requirements of section 30D(d) if—

(i) The qualified manufacturer fails to provide a periodic written report for such vehicle prior to the vehicle being placed in service reporting the vehicle identification number of such vehicle and certifying compliance with the requirement of section 30D(d);

(ii) The qualified manufacturer provides incorrect information with respect to the periodic written report for such vehicle;

(iii) The qualified manufacturer fails to update its periodic written report in the event of a material change with respect to such vehicle; or

(iv) For new clean vehicles placed in service after December 31, 2024, the qualified manufacturer fails to meet the requirements of § 1.30D-6(d).

(33) New qualified fuel cell motor vehicle. New qualified fuel cell motor vehicle means any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) that meets the requirements under section 30D(d)(1)(G) (that is, the final assembly in North America requirement) and (H) (that is, the seller report requirement), and that does not have a clean vehicle battery.

(34) North America. North America means the territory of the United States, Canada, and Mexico as defined in 19 CFR part 182, appendix A, § 1(1).

(35) North American battery component. North American battery component means North American battery component as defined in § 1.30D-3(c)(2)(ii).

(36) Placed in service. A new clean vehicle is considered to be placed in service on the date the taxpayer takes possession of the vehicle.

(37) Processing. Processing means the non-physical processes involved in the refining of non-recycled substances or materials, including the treating, baking, and coating processes used to convert such substances and materials into constituent materials. Processing includes the chemical or thermal processes involved in refining. Processing does not include the physical processes involved in refining.

(38) Procurement chain. Procurement chain means procurement chain as defined in § 1.30D-3(c)(1)(i).

(39) Qualifying battery component content. Qualifying battery component content means qualifying battery component content as defined in § 1.30D-3(c)(2)(iii).

(40) Qualifying critical mineral. Qualifying critical mineral means qualifying critical mineral as defined in § 1.30D-3(c)(1)(ii).

(41) Qualifying critical mineral content. Qualifying critical mineral content means qualifying critical mineral content as defined in § 1.30D-3(c)(1)(iii).

(42) Qualified manufacturer. A qualified manufacturer means a manufacturer that meets the requirements described in section 30D(d)(3) at the time the manufacturer submits a periodic written report to the IRS under a written agreement described in section 30D(d)(3). The term qualified manufacturer does not include any manufacturer whose qualified manufacturer status has been terminated by the IRS. The IRS may terminate qualified manufacturer status for fraud, intentional disregard, or gross negligence with respect to any requirements of section 30D, the section 30D regulations, or any guidance under section 30D, including with respect to the periodic written reports described in section 30D(d)(3) and paragraph (b)(32) of this section and any attestations, documentation, or certifications described in §§ 1.30D-3(d) and 1.30D-6(d), at the time and in the manner provided in the Internal Revenue Bulletin (see § 601.601 of this chapter). See § 1.30D-6(f) for additional rules regarding inaccurate determinations and documentation. The IRS may also terminate qualified manufacturer status for fraud, intentional disregard, or gross negligence with respect to any requirement of section 25E or section 45W or any regulations thereunder.

(43) Recycling—(i) In general. Recycling means the series of activities during which recyclable materials containing critical minerals are transformed into specification-grade commodities and consumed in lieu of virgin materials to create new constituent materials; such activities result in new constituent materials contained in the clean vehicle battery. All physical, chemical, and thermal treatments or modifications that convert recycled feedstocks to specification grade constituent materials are included in recycling. However, recycled applicable critical minerals and associated constituent materials are only subject to the requirements under §§ 1.30D-3(a) and 1.30D-6 if the recyclable material contains an applicable critical mineral, contains material that was transformed from an applicable critical mineral, or if the recyclable material is used to produce an applicable critical mineral at any point during the recycling process. The requirements under §§ 1.30D-3(a) and 1.30D-6 only take into account activities that occurred during the recycling process.

(ii) Example: Recycling of applicable critical mineral. Mineral Z, an applicable critical mineral in a form listed in section 45X(c)(6), was processed by A in a prior production process. Mineral Z subsequently was derived from recyclable material in a form not listed in section 45X(c)(6). Mineral Z was recycled by B. The requirements under §§ 1.30D-3 and 1.30D-6 only take into account the activities conducted by B.

(44) Registered dealer. Registered dealer means registered dealer as defined in § 1.30D-5(b)(8).

(45) Section 30D regulations. Section 30D regulations means § 1.30D-1, this section, and §§ 1.30D-3 through 1.30D-6.

(46) Seller report. Seller report means the report described in section 30D(d)(1)(H) that the seller of a new clean vehicle provides to the taxpayer and the IRS in the manner provided in, and containing the information described in, guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter). The seller report must be transmitted to the IRS electronically. The term seller report does not include a report rejected by the IRS due to the information contained therein not matching IRS records.

(47) Time of sale. Time of sale means time of sale as defined in § 1.30D-5(b)(9).

(48) Total incremental value of battery components. Total incremental value of battery components means total incremental value of battery components as defined in § 1.30D-3(c)(2)(iv).

(49) Total incremental value of North American battery components. Total incremental value of North American battery components means total incremental value of North American battery components as defined in § 1.30D-3(c)(2)(v).

(50) Total traced qualifying value. Total traced qualifying value means total traced qualifying value as defined in § 1.30D-3(c)(1)(iv).

(51) Total value of critical minerals. Total value of critical minerals means total value of critical minerals as defined in § 1.30D-3(c)(1)(v).

(52) Total value of qualifying critical minerals. Total value of qualifying critical minerals means total value of qualifying critical minerals as defined in § 1.30D-3(c)(1)(vi).

(53) Traced qualifying value. Traced qualifying value means traced qualifying value as defined in § 1.30D-3(c)(1)(vii).

(54) Value. Value, with respect to property, means the arm's-length price that was paid or would be paid for the property by an unrelated purchaser determined in accordance with the principles of section 482 of the Code and regulations thereunder.

(55) Value added. Value added means value added as defined in § 1.30D-3(c)(1)(viii).

(56) Vehicle classification—(i) In general. Vehicle classification means the vehicle classification of a new clean vehicle determined consistent with the rules and definitions provided in 40 CFR 600.315-08 and this paragraph (b)(56) for vans, sport utility vehicles, pickup trucks, and other vehicles.

(ii) Van. Van means a vehicle classified as a van or minivan under 40 CFR 600.315-08(a)(2)(iii) and (iv), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).

(iii) Sport utility vehicle. Sport utility vehicle means a vehicle classified as a small sport utility vehicle or standard sport utility vehicle under 40 CFR 600.315-08(a)(2)(v) and (vi), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).

(iv) Pickup truck. Pickup truck means a vehicle classified as a small pickup truck or standard pickup truck under 40 CFR 600.315-08(a)(2)(i) and (ii), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).

(v) Other vehicle. Other vehicle means any vehicle classified in one of the classes of passenger automobiles listed in 40 CFR 600.315-08(a)(1), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).

(c) Severability. The provisions of this section are separate and severable from one another. If any provision of this section is stayed or determined to be invalid, it is the agencies' intention that the remaining provisions shall continue in effect.

(d) Applicability date. This section applies to taxable years ending after December 4, 2023.

26 C.F.R. § 1.30D-1 26 C.F.R. § 1.30D-3

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