The core industrial policy of the Biden administration, the infrastructure related part of the "American employment plan", was stripped out and merged with the "bipartisan infrastructure bill" into the "infrastructure investment and Employment Bill", with a total investment of US $1.2 trillion, which was signed into law on November 15, 2021. The rest of the "American employment plan", including energy, climate change and other projects, was split and merged with the "American family plan" to form the build – back better (BBB) Bill with an investment of about US $1.75 trillion.
1. The tax credit of the reconstruction of beauty act has been significantly improved, which is expected to promote the demand in the United States to exceed expectations and benefit the Shanxi Guoxin Energy Corporation Limited(600617) automobile, energy storage and photovoltaic industry chain in the United States and China.
In terms of new energy vehicles, the single vehicle subsidy increased by up to 67%, and the scope and duration of the subsidy were expanded. The maximum tax credit for electric vehicles is increased from the current 7500 US dollars / vehicle to 12500 US dollars / vehicle (the total subsidy shall not exceed 50% of the purchase price of the vehicle). The subsidy sales limit of the past 200000 vehicle enterprises is cancelled, Tesla, Ford and other vehicle enterprises will continue to receive subsidies, and the tax credit for two wheeled / three wheeled vehicles is increased. In terms of the decline period of subsidies, according to the version passed by the house of Representatives, all electric vehicles can enjoy the credit before 2027, only vehicles made in the United States can enjoy it from 2027 to 2031, and gradually decline from 2032.
In terms of photovoltaic, ITC was postponed and its strength was improved. The proportion of tax relief will be increased from 26% to 30%, household PV will be consistent with ITC of large-scale and industrial and commercial projects, and the time of tax relief will be extended from 2022 to 2026.
In terms of energy storage, a separate ITC tax rebate is formulated for energy storage for the first time. Before 2026, the maximum 30% tax rebate for energy storage systems higher than 5kwh will be paid. Previously, energy storage only enjoyed ITC tax rebate when supporting photovoltaic wind power projects.
2. U.S. policy efforts continue to improve, but we need to pay attention to the implementation of policy promotion.
On November 19, the U.S. House of Representatives passed Biden's $1.75 trillion bill to rebuild beauty. The Democratic Party won 220 votes to 213 (all Republican members voted against and one Democratic member voted against). After the House vote, the bill is expected to be submitted to the Senate for voting in the coming weeks. In the updated version of the Senate Finance Committee, the subsidy rules for electric vehicles have basically not changed, and the decline period of photovoltaic subsidies has been delayed by two years compared with the version of the house of Representatives.
In theory, the Democratic Party can use the Byrd rule + break the draw rule and use the voting strategy of "50 votes + vice presidential votes". Even if all Republicans oppose, the "reconstruction of beauty" bill can be passed in the Senate. Due to Democratic Senator Manchin's public opposition, there are variables in the implementation of the bill.
Manchin's objection is not about the amount of single vehicle subsidies and other rules, but about the total amount of the bill and the attitude towards traditional energy. Manchin believes that the total amount of subsidies should not exceed US $1.5 trillion, and should mainly focus on innovation rather than eliminating traditional energy. Therefore, we believe that Manchin's opposition or the time point affecting the passage of the bill is still expected to become a formal bill at the beginning of next year, and the strength of new energy subsidies is not the main contradiction.
Investment suggestion: lithium battery: the U.S. Shanxi Guoxin Energy Corporation Limited(600617) policy exceeded expectations, focusing on Chinese material enterprises benefiting from the U.S. electric vehicle industry chain, such as Guangdong Fangyuan Environment Co.Ltd(688148) , Beijing Easpring Material Technology Co.Ltd(300073) , beiteri ( China Baoan Group Co.Ltd(000009) shareholding), Cngr Advanced Material Co.Ltd(300919) , Nuode Investment Co.Ltd(600110) , etc.
Photovoltaic and energy storage: we are optimistic about the export promotion and profit restoration of module enterprises to the United States, the growth of demand for auxiliary materials and inverters, and the related targets benefiting from the U.S. energy storage market. We pay attention to Longi Green Energy Technology Co.Ltd(601012) , Trina Solar Co.Ltd(688599) , Ja Solar Technology Co.Ltd(002459) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , Flat Glass Group Co.Ltd(601865) , Xinyi solar energy, Hangzhou First Applied Material Co.Ltd(603806) , Arctech Solar Holding Co.Ltd(688408) , Contemporary Amperex Technology Co.Limited(300750) , Sungrow Power Supply Co.Ltd(300274) , Ningbo Deye Technology Co.Ltd(605117) , Shenzhen Sinexcel Electric Co.Ltd(300693) .
Risk analysis: there are variables in the promotion of the bill, the subsidy intensity and amount are less than expected, Sino US trade friction, and technological route change.
