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Congress·In Committee·20 days ago

House Bill Would More Than Double Battery Manufacturing Tax Credit to 25%, Bar Chinese Materials

Also known as: CMMSA 2.0

Legislative Progress

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Review
House
Senate
President

Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Key Points

  • Congress is proposing a bill to help companies that make batteries in the United States. It would more than double a tax credit—from 10% to 25%—for companies that produce the specific materials used inside batteries, such as those for electric cars and home energy storage.
  • To keep the supply chain secure, the bill says companies cannot get this tax break if they use minerals or parts from prohibited foreign entities after 2026. This is meant to encourage companies to find or mine their materials in the U.S. or from friendly countries instead of relying on rivals.
  • The bill adds more items to the list of things that qualify for the tax credit. This includes raw ingredients like lithium hydroxide, cobalt sulfate, and silicon. By including these materials, the government hopes to support every step of the manufacturing process from the mine to the finished battery.
  • The bill would keep these tax breaks around much longer than originally planned. Instead of starting to disappear in 2030, the full tax credits would stay in place until 2041. This gives companies more certainty to build expensive new factories knowing the financial help will last for many years.
  • If passed, these new rules and higher tax credits would start applying to battery parts made and sold after December 31, 2026.
TaxesEnergy EnvironmentEconomy Finance

Milestones

2 milestones2 actions
Feb 10, 2026House

Referred to the House Committee on Ways and Means.

Feb 10, 2026

Introduced in House

What Happens Next

Projected impacts based on AI analysis

2027-01-01

New tax credit rules take effect for battery components produced and sold after this date

Manufacturers producing electrode active materials, precursor materials, and solid state electrolytes in the U.S. can start claiming the higher 25% credit and the expanded list of qualifying materials.

2027-01-01

Foreign entity mineral ban kicks in

Any battery components containing critical minerals extracted, processed, or recycled by prohibited foreign entities after December 31, 2026 would be disqualified from the tax credit, pushing manufacturers to source from the U.S. or allied countries.

2041-01-01

Tax credit phase-out begins (extended from 2030 to 2041)

Instead of the original 2030 start for credit reductions, the full credit stays in place until 2041, giving manufacturers over a decade of additional certainty for long-term factory investments.

Related News

2 articles
Axios·20 days ago

Bipartisan House Bill Seeks to Double Tax Credits for U.S. Battery Materials

Reps. Raul Ruiz (D-CA) and Gabe Evans (R-CO) have introduced the Critical Minerals and Manufacturing Support Act 2.0 (CMMSA 2.0). The bill aims to more than double the 45X tax credit from 10% to 25% for domestic battery materials like lithium and silicon while tightening anti-China sourcing rules.

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Benchmark Source·over 1 year ago

US battery production could beat China on cost due to IRA tax credits

Analysis shows that the 45X manufacturing production tax credit is making U.S. battery producers the cheapest in the world, with potential to underprice Chinese competitors by the end of the decade as domestic capacity ramps up.

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Source Information

Document Type

Congressional Bill

Official Title

CMMSA 2.0

Bill NumberHR 7473
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Cosponsors

(1)
R: 1

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.