Bill > HR3200

This bill modifies the advanced manufacturing production credit in the Internal Revenue Code, specifically focusing on battery component production. The legislation increases the tax credit for electrode active materials from 10% to 25% and expands the definition of production costs to include raw material extraction. It introduces new sourcing requirements for battery components and critical minerals, mandating that by 2026, 70% (increasing to 80% in 2027) of critical minerals and component values must be sourced or produced in the United States, free trade agreement countries, or North America. The bill excludes battery components involving critical minerals or components extracted, processed, or manufactured by "foreign entities of concern," which are typically entities connected to countries of strategic competition. It also broadens the definition of electrode active materials to include precursor materials, binders, and additional components like solid-state electrolytes, and specifically includes silicon as a critical material for battery anodes. The changes are set to take effect for components produced and sold after December 31, 2025, with the goal of strengthening domestic battery manufacturing and reducing reliance on foreign supply chains.