US and Japan make trade deal for battery minerals ahead of IRS decision
The United States and Japan have struck a trade deal for battery minerals, according to Reuters. This deal could potentially allow Japanese electric cars greater access to US EV tax credits in the Inflation Reduction Act.
The Inflation Reduction Act, passed in August, included big changes to how the US federal EV tax credit works. One of those changes involves restricting credit availability to vehicles that are assembled in North America, with additional requirements based on where battery components and critical minerals are sourced.
The bill requires that a minimum percentage of EV battery components be built in North America and that “critical minerals” in an EV’s battery be extracted or processed in the US or in a country with which the US has a free trade agreement. This minimum percentage will increase each year.
These requirements went into place rather suddenly – the final assembly provision went into effect immediately, and the battery sourcing provisions were set to go into effect in December. Their implementation was pushed back until March, and the Treasury should announce those guidelines by the end of this week.
This sudden implementation rankled the international community, with foreign automakers and governments decrying it as a protectionist move. Since then, perhaps to smooth over these complaints, the IRS has suggested that foreign-assembled cars could still qualify if they’re leased, an interpretation that was pushed for by South Korean automakers. Though the famously anti-EV Toyota opposed that interpretation, even though the company would benefit from it.
Today, it looks as if Japan has found a different way around these requirements, or at least one of them, by signing a narrow free trade agreement with the US solely for battery critical minerals. The agreement was signed by US trade representative Katherine Tai and Japanese ambassador to the US Koji Tomita.
So today’s agreement will potentially add Japan to the list of free trade countries that can extract or process the critical minerals in EV batteries.
The US is currently negotiating separately with the European Union for a similar agreement, though that has not yet born fruit. We may learn more about it in the coming days or weeks, since the deadline for the Treasury’s decision is fast approaching.
However, all of these agreements are contingent on the Treasury’s interpretation of the bill. In the bill itself, the language specifies “any country with which the United States has a free trade agreement in effect.”
The full list of US free trade countries is available here, and does not include Japan. Japan and the US do not actually have a full free trade agreement. The countries agreed in 2019 to implement some free trade measures in agricultural and industrial goods, and intend to pursue an expanded free trade agreement, but this has not been agreed to yet.
So it’s up to the Treasury now to decide if this new agreement counts under its interpretation of what a “free trade agreement” is. Which we should learn more about this week.
Electrek’s Take
Well, this is an interesting last-minute development.
It was fair for other countries to be annoyed by the speed with which the Inflation Reduction Act went into effect, as it takes time to plan and build battery and car factories, and the US government should have given more lead time. However, given the difficult situation in Congress, with one party presenting a unified front acting against any sort of climate action or environmental stewardship, we got the bill we could get.
So agreements like this seem like a good way to help lessen the blow of the bill, and perhaps to repair the wounded relationships between the US and its allies due to the way the bill was implemented. In the end, it’s the biggest climate action bill ever passed by any nation, and on the world stage that should be commended, as long as we can make other countries feel like they’re being treated fairly.
But it’s also interesting that this is happening with Japan, and not other countries that have shown… a little more interest in EVs. I would have expected an agreement like this to happen faster with Korea, which is home to three large battery suppliers, LG, Samsung SDI and SK On. But perhaps that’s what we’ll hear about next.
Not to spend too much time on my “Japan is falling way behind on EVs” horse, but currently the country doesn’t have a lot of battery vehicles to offer. Panasonic is a major battery supplier, but many of its battery operations are in Nevada in cooperation with Tesla, and Tesla’s minerals (for Li-ion batteries, at least) are largely sourced from Australia and Canada. And Japan is not known to have significant reserves of battery critical minerals, though they have discovered some deep-sea deposits within Japanese territory that could potentially be exploited. Japan could also still process minerals extracted overseas, which would then qualify due to being processed in a free trade country.
Or, maybe we can hope that this is a signal of change on the part of the Japanese auto industry, and that they are finally turning more toward EVs. We’ve seen some moves in this direction – the new CEOs of both Honda and Toyota are finally recognizing that more action is needed on EVs. So removing this roadblock might help, in some small way.
Photo: US President Biden hosts Japan PM Kishida at the White House, May 2022. License
FTC: We use income earning auto affiliate links. More.
The US solar industry just delivered another huge quarter, installing 11.7 gigawatts (GW) of new capacity in Q3 2025. That makes it the third-largest quarter on record and pushes total solar additions this year past 30 GW – despite the Trump administration’s efforts to kneecap clean energy.
According to the new “US Solar Market Insight Q4 2025” report from Solar Energy Industries Association (SEIA) and Wood Mackenzie, 85% of all new power added to the grid during the first nine months of the Trump administration came from solar and storage. And here’s the twist: Most of that growth – 73% – happened in red states.
Eight of the top 10 states for new installations fall into that category, including Texas, Indiana, Florida, Arizona, Ohio, Utah, Kentucky, and Arkansas. Utah jumped into the top 10 this quarter thanks to two big utility-scale projects totaling more than 1 GW.
But the report also flags major uncertainty ahead. Federal actions, including a July memo from the Department of the Interior (DOI), have slowed or stalled the approvals pipeline for utility-scale solar and storage. Without clarity on permitting timelines, Wood Mackenzie’s long-term utility-scale forecast through 2030 remains basically unchanged from last quarter.
“This record-setting quarter for solar deployment shows that the market is continuing to turn to solar to meet rising demand,” said Abigail Ross Hopper, SEIA’s president and CEO. She added that strong growth in red states underscores how decisively the market is shifting toward clean energy. “But unless this administration reverses course, the future of clean, affordable, and reliable solar and storage will be frozen by uncertainty, and Americans will continue to see their energy bills go up.”
Two new solar module factories opened this year in Louisiana and South Carolina, adding a combined 4.7 GW of capacity. That brings the total new US module manufacturing capacity added in 2025 to 17.7 GW. With a new wafer facility coming online in Michigan in Q3, the US can now produce every major component of the solar module supply chain.
“We expect 250 GW of solar to be installed from 2025 to 2030,” said Michelle Davis, head of solar research at Wood Mackenzie and lead author of the report. “But the US solar industry has more potential. With rising power demand across the country, solar could do even more if current constraints were eased.”
SEIA also noted that, following an analysis of EIA data, it found that more than 73 GW of solar projects across the US are stuck in permitting limbo and at risk of politically motivated delays or cancellations.
Read more: EIA: Solar + storage soar as fossil fuels stall through September 2025
If you’re looking to replace your old HVAC equipment, it’s always a good idea to get quotes from a few installers. To make sure you’re finding a trusted, reliable HVAC installer near you that offers competitive pricing on heat pumps, check out EnergySage. EnergySage is a free service that makes it easy for you to get a heat pump. They have pre-vetted heat pump installers competing for your business, ensuring you get high quality solutions. Plus, it’s free to use!
Your personalized heat pump quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here. – *ad
FTC: We use income earning auto affiliate links. More.
The spiritual successor to the beloved Chevy Geo Tracker, production of the new-for-2026 electric Spark EUV has officially begun in Brazil with more than 200 miles of range.
That’s right, kids. To know the Chevy Tracker is to love the Chevy Tracker. The tiny, top-heavy Suzuki-based SUV combined bold colors, fun styling, (relatively) good fuel economy, and real off-road chops (especially in ZR2 trim) with an affordable price tag to make the Tracker an early favorite among the serious rock-crawling crowds.
Like, really
While it’s still too early to tell whether or not the all-new Chevy Spark EUV will come even close to that little proto-SUV, it seems we won’t have to wait much longer to find out – GM Authority reports that production of the 2026 Chevy Spark EUV has officially begun at Comexport’s Planta Automotiva do Ceará (PACE) plant, in the state of Ceará, Brazil.
GM Brazil invested the equivalent of $73 million to get the PACE factory ready to assemble GM’s modern, zero-emissions Chevy crossover for the South American and Middle Eastern markets – an investment big enough to earn a visit from Brazilian president Luiz Inácio Lula da Silva, who was on-hand for the December 3rd kickoff event.
“It’s not a car factory,” said Comexport Vice President and PACE shareholder, Rodrigo Teixeir. “(The) goal is to develop technology there, not simply assemble a vehicle.”
Production of the new Spark EUV began last week, with production of the equally new Chevy Captiva EV set to begin as early as Q1 of 2026.
2026 Chevy Spark EUV
The Made in Brazil Chevrolet Spark EUV is heavily based on the Chinese Baojun, and is powered by that vehicle’s single 75 kW (101 hp), 180 Nm (130 lb-ft) motor driving the front wheels. Power comes from the Baojun’s 42 kWh LFP battery that, with regenerative braking, is good for up to 360 km (220 miles) on the NEDC driving cycle.
Weirdly, the new Spark is also equipped with a 10.1″ infotainment screen and 8.8″ digital instrument cluster (above) that supports both Apple CarPlay and Android Auto standard – technology that GM claims lead to “unsafe” driver behaviors in North America.
Let us know what you think of the little electric SUV, and whether or not you think it would be a hit in the US (it would) in the comments.
SOURCE: GM Authority; images by GM, Harry Situations.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024