I was talking to a mate of mine on Sunday night and he asked if I was going to make some decent coin after mentioning I'd had some good news on the market front. I replied hopefully but not overnight and I didn't elaborate.
The US Govt have stuffed up with the FEOC rules in regards to graphite. Due to zero or close to zero non FEOC supply of graphite before 2027, no one can claim the $7500 subsidy because the EV can't contain any FEOC material or manufactured parts. They finally realised their error and have extended the FEOC rules to not apply to graphite from 1 year (this year) for a further 2 years with caveats (new rules). Because the FEOC rules are legislated, they've had to use some slight of hand and declare graphite a non traceable material which is how they got around the FEOC for rare earths. They claimed RE's accounted for less than 2% of the cost of a battery so didn't matter.
So all this means is non FEOC manufacturing of AAM is a mess and has stuffed up the goals of the IRA. It's going to take a few months for the OEM's to figure out and implement what to do under the caveats so they can claim the IRA $7500 subsidy in 2025/26.
In the mean time, the market will sit on their hands and await developments.
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