The Inflation Reduction Act could not have been passed without West Virginia Senator Joe Manchin, who surprised everyone when he helped push the green job-laden bill across the finish line. It’s less than a year since the bill passed, and no one in the Senate is seemingly madder about the bill than Senator Manchin.
We’ve got that this morning, plus a Ford deal that’s probably not going to make Manchin any happier, more veiled threats from Stellantis, and Škoda news (because we can).
Joe Manchin Is Pissed
In most modern democracies, a legislative branch (a congress or a parliament, usually) passes laws intended to tell the executive branch how to do things. There exist, however, practical limits to how much a bill can specify. For instance, a law banning the use of the term “hot dog” on packaging for any sausages not made with pork might specify the dollar amount of the fine for any violations. A law is unlikely to detail the kind of paper the fine might be written on or the name of the person writing up the fine.
It’s in the interpretation of the enforcement of laws that the executive branch tends to find a lot of its power. Take, for instance, the Inflation Reduction Act. When it passed, it used the carrot of massive tax breaks to encourage, among other things:
- EVs to be built in North America
- Battery packs to be assembled here, too
- Battery materials to come from places we have trade agreements with
Automakers, as automakers do, have been trying to wiggle around those laws by claiming cars leased for Uber drivers are commercial vehicles. In addition, by pushing back the rules interpretation to later this year, the Treasury Department allowed a bunch of people to buy Teslas and claim a tax credit. Senator Manchin proposed a bill to force people to give those tax credits back. It didn’t pass.
The next battle is over what counts as “manufactured” or “assembled” when it comes to making battery packs. How assembled is assembled? Is it like Technic, where you have to put all the little pieces together, or is it like Duplo, where you’re just pushing together the mostly formed modular pieces? The Treasury Department is on the verge of deciding.
There’s a good read on the issues today in Automotive News that has most of the details:
So why is Senator Manchin upset?
“What I’m most concerned about is how they classify the processing with manufacturing,” Manchin told Automotive News. “Manufacturing is meant to bring manufacturing back to the United States. It’s not basically allowing everyone to put all the parts and build everything you can for that battery somewhere else and then send it here for assembly.”
The “they” in this situation is the Treasury Department, which is under the guidance of President Joe Biden.
How much of this is theater intended to influence them to keep requirements stiff and how much he means it is not clear, but boy it’ll be fun to watch what happens when the guidance comes out (probably tomorrow).
Ford Is Part Of A $4.5 Billion Nickel Plant In Indonesia
When it comes to materials that are difficult to source for a battery, lithium is actually not that bad. It’s the cobalt, nickel, and manganese that tend to be a little bit tougher. You know who has an ass ton of nickel? The island nation of Indonesia!
That’s good news for Indonesia, which wants investors to build a bunch of nickel processing facilities in the country. In fact, Indonesia banned the export of unprocessed nickel for that reason a few years ago for this very reason. Guess who is stepping up to snatch some of that nickel? Ford.
U.S. carmaker Ford (F.N) has joined PT Vale Indonesia (INCO.JK) and China’s Zhejiang Huayou Cobalt’s as their new partner in a $4.5 billion nickel processing plant in Indonesia, the companies said on Thursday.
The investment is Ford’s first in the Southeast Asian country and underscores growing appetite among automakers for raw materials used in producing electric vehicle (EV) batteries, which account for about 40% of a vehicle’s sticker price, aiming to cut costs and close the gap on EV market leader Tesla (TSLA.O).
If you were curious, the United States does not have a comprehensive free trade agreement with Indonesia, so it’s not clear where this processed nickel is going. Ford has plenty of operations in Europe, Asia, and elsewhere that will need resources.
Stellantis CEO Seems To Be Gunning For A Fight
There’s already been a decent amount of discussion around these parts about Stellantis CEO Carlos Tavares and the showdown that’s brewing between the company and the UAW. Perhaps the two sides have cooled off a bit.
Stellantis is conducting a “manufacturing assessment” of the Sterling Heights facility that makes the Ram 1500.
CEO Carlos Tavares has emphasized the need to find savings, because electric vehicles are 40% more expensive than their internal combustion engine counterparts. He’s said there is significant room for improvement in North American manufacturing efficiency based on best practice elsewhere and has noted how U.S. absenteeism is higher than Europe’s.
It’s worth noting here that autoworkers who build cars for Stellantis in Italy get an EU guaranteed 20 days off and another 10 from the Italian government.
The United Auto Workers represent both the Belvedere, Illinois plant that’s been mothballed and the Sterling Heights facility. What does UAW think about this? Here’s UAW VP Rich Boyer earlier this week to workers:
“I’m going to make one commitment to everybody in this room: If you’re in trouble, we’re coming,” he said. “Stellantis is coming. We’re coming to your side. We’re going to walk the line with you. We’re going to do whatever we’ve got to do to make sure you survive.”
Carlos Tavares worked under Carlos Ghosn and, somewhat famously, departed Nissan allegedly because he was worried Ghosn would never give up the top role. Tavares is a self-described “performance psychopath” and seems to be bringing that energy to North American manufacturing.
He’s probably not wrong about the inefficiencies inherent in some (or all) of the company’s facilities and the need to reform them, but with a changing and potentially ascendent labor movement in this country I’m curious about his tactics.
I Can’t Wait For This Škoda Camper Concept
Every year the students at the Škoda Vocational School put together a concept car. They’ve had some wild ideas, ranging from little beach cars to big ol’ rally crossovers. This year’s concept combines two of our favorite things: Škodas and campers:
In their design sketches, the students have already defined the personality of their dream car. As a battery electric office camper, the first ever Student Car based on an Enyaq iV is intended to be a companion on journeys to new horizons. A personal space for experiences and discoveries, it also underlines Škoda’s commitment to electric mobility. As is typical for the brand, the upcoming Student Car will benefit from iconic “Simply Clever” features and state-of-the-art technology, while also incorporating a wide array of sustainable materials. The aim of the car is to let its owner become a digital nomad – working without being tied to a desk, free to move wherever and whenever they want to. It’s a perfect match for Škoda’s new “Explore More” concept and precisely the right vehicle for modern explorers and independent adventurers.
This thing is gonna be cool.
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Photos: Stellantis, U.S. Senate, Ford, Kia, Skoda