Management not HC should be providing answers as to why the delays, however noting that reservation I do wonder whether EGR is caught in a loop waiting for the US Treasury department to determine the regulations that will clarify points of implementation around the Inflation Reduction Act.
While the broad intention of the Act is clear, there are many finer points that need clarification. It is only with that clarification the OEM's can be certain the plans that they are developing around on-shoring all the elements for achieving an 80% acceptable supply line will be compliant. This is critical because it impacts the continued ability for customers to receive the $7,500 credit thereby making EV vehicles more cost competitive or perhaps even cheaper in some instances than similar petrol versions. Some regulation interpretations could be so difficult to comply with some, if not many OEM's may decide that they just continue to make non-compliant cars cheaply rather than make more expensive cars that are compliant.
If EGR is working on a deal with part of this supply chain, it is highly unlikely that the deal will be finalised before these regulations come out, however it wouldn't surprise me if EGR management hadn't realised how long this process will take. Feedback only closed 4 November and then there is the entire back-end process of reviewing this feedback and making decisions.
You would also expect that Big Oil has lobbied and provided extensive feedback into the process looking to narrow interpretations. The narrower the interpretation, the less EV cars have a lower price point and the more oil they sell as petrol for cars. The less EV's take off in the US, the less other countries copy. The stakes are high. One simple legal trick is to overload the system to slow responses. The possible range of alternative suggestions being received by treasury could be slowing down any timelines that the US Treasury had expected to meet. This would be creating a limbo land around OEM's pressing go with deals that would shift production to the US and allied countries.
An example of the issue is that many critical minerals have more than one phase of processing between extraction of the ore and the final battery mineral/metal/chemical input. The Act's wording doesn't address particularly well this issue of multiple processing steps that sometimes happen in multiple countries. EGR's example is concentration at site for Epanko, shaping somewhere and purification somewhere. How much of this processes needs to be in the US or in a free trade country for the material to be processed in a free trade country. Is it all the processing, part of the processing or just the final step? Does it require direct ore shipping to a free trade country (with all the difficulties that creates in approvals in the country with the ore)? This obviously has implications on where shaping occurs. Limbo land and no decisions - a space EGR would appear to like operating!!!
