Power Play: Corporate Lobbying’s Impact on the Inflation Reduction Act’s 30D Clean Vehicle Tax Credit

Abstract

The 30D Clean Vehicle Tax Credit provided for in Section 13401 of the Inflation Reduction Act is a key incentive to expand the uptake of electric vehicles. Vehicle eligibility is tied to several factors including North American assemblage, increasing friend-sourced critical mineral and battery component sourcing percentages, foreign entity of concern sourcing requirements, vehicle cost restrictions, and consumer income limitations. These restrictions push the automotive and critical mineral industries closer together than any before. The relationship between the 30D tax credit and private industry offers an opportunity to study how private industry lobbying efforts exert themselves in the policy-making process, particularly when there are potentially conflicting industry interests. Through an analysis of lobbying expenditures and interviews with industry experts, I explore the impact of private industry lobbying on the 30D tax credit and how the legislative interests of the automotive and critical mineral industries interacted with each other to result in the final version of the Clean Vehicle Tax Credit. I find that the influence of private industry lobbying efforts was diminished as a result of policymaker’s economic and national security concerns stemming from the COVID-19 pandemic, shifting private industry influence to the implementation process which has taken on particular importance in relation to 30D. Furthermore, my research suggests that there may have been more tension within industries depending on their pre-existing eligible product portfolio.