JAMA’s Anita Rajan on Electric Vehicle Tax Credit Limits

Q: What are your top priorities as you settle into your new role?

A: To educate policymakers, stakeholders, and the general public by telling the story of the continued growth of Japanese-brand automakers and over 40 years of significant investment in the U.S. auto industry. JAMA members are building on this momentum by focusing on workforce development, accelerating the transition to electrified vehicles, advancing critical technologies, and strengthening sustainability efforts. I will continue to highlight the spirit of innovation and environmental stewardship that is at the heart of Japanese automakers’ US operations.

You came to JAMA after 19 years at Mitsubishi Motors R&D of America, most recently as Director of Government Affairs. How does this experience guide your work?

My nearly two decades at Mitsubishi Motors R&D of America have allowed me to appreciate the complex journey that automobiles take from concept to consumer, as well as the many points where they intersect with various public policies throughout. along this route. I quickly learned how politics often dictates politics and associated deadlines and how I needed to communicate this to internal stakeholders in Japan and the United States.

My regulatory background in the automotive industry gives me a solid foundation to lead JAMA Washington’s stakeholder engagement and provide our Japan-based members with the context necessary to assess policy and policies that affect their business in the United States. United.

What topics on your radar could affect Japanese automakers?

Some of the major issues we are monitoring are not limited to Japanese brand automakers, but rather issues that affect all US automakers. We closely monitor policies and trade policies that impact our members’ supply chains, which has been a recurring theme since 2020.

We also examine the economic ramifications of sustained high vehicle prices, tight inventories and the possibility of a recession.

Finally, the industry issue of the day – electrification – is certainly something we are following closely. The automotive industry is in the midst of a moment of transformation, with consumers and automakers embracing electrified vehicle technologies. This presents opportunities to increase durability and reduce emissions, but will depend on automakers being able to provide consumers with electrified vehicle choices that meet all needs.

Moreover, the speed of the transition will depend on sound policy that will support this booming market for electrified vehicles. A good example is the unprecedented investment in charging infrastructure in the Infrastructure Investment and Jobs Act.

On August 16, President Joe Biden signed into law the Inflation Reduction Act. Legislation includes an extended – but more complicated – tax credit for electric vehicles. What is your first reaction to the credit overhaul?

While the Cut Inflation Act represents significant progress in incentivizing electric vehicle manufacturing in the United States and transitioning commercial fleets and used vehicles, we believe that broad incentives offering more consumer choice would best maintain the momentum towards widespread adoption of electrified vehicles and meeting carbon reduction targets. Japanese brand automakers are wholeheartedly committed to realizing a zero-carbon future, and electrified vehicles are an integral part of achieving that goal. However, this once-in-a-century transition requires the support of the US government, and broad tax credits for electric vehicles are essential to this transformation.

For new electric vehicles, the tax credit adds increasingly stringent requirements for assembly of battery components and sourcing of critical minerals. How difficult will these rules be for Japanese automakers?

Japanese brand car manufacturers have a habit of producing products as close to the consumer as possible. While vehicle supply chains are complicated and often involve components from around the world, the United States is and will remain a critical market for our members. In fact, some JAMA members recently announced longer-term plans to open battery manufacturing facilities in the United States to better facilitate the production of electrified vehicles. But as we continue to review the new law and monitor developments, JAMA is concerned that the increasingly stringent EV tax credit battery restrictions may limit the applicability of the vehicle tax credit. electrified.

Japanese automakers have invested billions in the United States over the past 40 years. Do you see that number increasing, given the new tax credit for electric vehicles, which is designed to encourage production in the United States and North America?

Yes. In 2021, JAMA members have invested more than $57 billion in manufacturing in the United States since the first plant was commissioned in 1982. It should be noted that this figure represents an increase of 817% compared to to only 30 years ago. Our members’ track record of investing in their facilities and workforce in the United States is indisputable. Japanese-brand automakers have been community partners and economic engines across the United States for decades and are committed to that heritage for decades to come.