Three developments this week touch Section 45X Advanced Manufacturing Production Credits at three different points in the chain. LG Energy Solution declared production at Lansing on August 19, starting credit eligibility at a plant whose output will enter a company-level disclosure that has never been broken down by facility. The related-party election under §45X(a)(3)(B)(i) governs when a producer selling to a corporate affiliate can claim the credit on that internal transaction. A BIS temporary final rule on black mass, effective August 27, requires domestic retention of recycled battery feedstock while making no reference to the tax-credit or foreign-entity screening regimes.
The five points where these developments land — production, sale, claim, transfer pricing, material qualification — each get something settled by one of the three, while the adjacent points stay where they were.
Lansing production and the facility-level disclosure gap
Section 45X credits attach when an eligible component is produced and sold by the taxpayer. The rates are $35/kWh for cells and $10/kWh for modules, or $45/kWh for modules not incorporating cells the taxpayer produced. Lansing began production August 18 on LFP cells for energy storage and NMC cells for EV applications, per LG's announcement and independent reporting. A qualifying sale, or a valid related-person election, has to follow before any credit attaches.
What the public record will show when it does is a narrower matter. Based on every disclosure available through August 21, it will show a single company-level figure.
LG's Q2 2026 earnings release, dated July 30, reports KRW 241 billion in "North American Production Incentive Effect," up from KRW 190 billion in Q1. LG attributed the quarter-over-quarter increase to ESS shipments. Its 2025 audited financial statements, auditor's report dated March 5, 2026, identify the eligible product categories as cells and modules produced and sold in the U.S. and stop there: no split between the two, no facility allocation.
Nothing in the reviewed LG disclosures attributes a 45X amount to Lansing, Holland, Spring Hill, or any other individual site. The disclosures contain no cell-versus-module breakdown, no effective realized rate per eligible kWh, and no facility-level calculation under the prevailing foreign entity (PFE) or modified adjusted cost ratio (MACR) screens that determine whether a given plant's output qualifies at all.
This is not an LG-specific gap. Samsung SDI's Korean fair disclosure dated July 30, 2026 reported KRW 107.7 billion in Q2 §45X income, undivided by plant or product. SK On's most recent public figure is older: KRW 273.4 billion in battery AMPC at the segment level, reported in Q2 2025 results on July 31, 2025, with nothing more recent identified through August 21, 2026. Tesla's Form 10-K, filed January 29, 2026, reported $565 million in automotive and $1.12 billion in energy-segment "manufacturing credits" without identifying the amounts as exclusively §45X or tying them to a facility. EnerSys disclosed $158.6 million in §45X credits for the fiscal year ended March 31, 2026, again at the company level. AESC has published no 45X figure at all.
There is one partial exception, though it proved temporary. Panasonic named its Nevada factory in its fiscal 2025 Q1 supplemental data of July 31, 2024, applied $35/kWh, and reported the corresponding credit series. Once Kansas entered the reporting perimeter, Panasonic shifted to aggregate "factories in US" reporting in its fiscal 2026 Q2 supplemental data of October 30, 2025, giving up the facility-level visibility it had briefly provided.
IRS Form 7207 requires a separate computation for each manufacturing facility, but §6103 makes return information confidential. Facility-level 45X data exists inside the IRS; it does not exist in any public record. Voluntary disclosure is the only path, and prevailing practice is to disclose at the company or segment level.
This publication's Issue #10 analysis tried to back LG's KRW 241 billion into facility output and could not. The component mix and plant allocation are undisclosed, and the $35/kWh cell and $10/kWh module rates produce very different implied volumes depending on the assumed split. Lansing adds another eligible facility to the denominator without changing the reporting granularity.
What the related-party election does and does not settle
The election determines whether a cell manufacturer selling to a corporate affiliate can claim the 45X credit on that internal transaction in the year it occurs. Absent the election, a producer selling to a related person generally cannot claim until the related person sells on to an unrelated person. With a valid election, the sale to the related person is treated as an unrelated-person sale in the year it happens.
Treasury Decision 10010, published October 28, 2024, implements the election at §1.45X-2(d). "Related person" is defined by the common-control test under IRC §52(b), which generally requires more than 50 percent common ownership or control. The election is annual, irrevocable for the elected tax year, and applies to all related-person sales for the elected trade or business.
That ownership threshold matters for the joint-venture structures that dominate U.S. battery manufacturing. In a 50/50 JV where neither partner clears the §52(b) threshold, there may be no "related person" relationship to elect against. The JV sells to each partner as an unrelated person under the ordinary rule, and the question collapses back to whether the JV entity is the producing taxpayer. TD 10010 adopts the §52(b) test without separately addressing sub-50% JV structures or the ownership configurations common in announced U.S. plants. Resolving any particular case requires the specific ownership, governance, and control terms, which are rarely disclosed in enough detail to work out from public filings.
The December 2025 Form 7207 instructions add a detail worth flagging. The listed permissible uses for the component after sale to the related person expressly include integration into the related person's finished-goods inventory, meaning the producing seller can claim while the component sits in the buyer's warehouse. The transaction still has to be a substantive sale under federal tax principles, and the anti-abuse rules prohibit wasteful, defective, or sham production.
The election does not require the producing seller to reduce the transfer price by the credit amount, and it does not give a JV partner or OEM parent any claim to the credit by virtue of ownership. It establishes when the credit attaches and to whom. The question of whether any credit value reaches a cell price is answered in the supply agreement, not the election.
Some credit sharing does happen, and there is at least one public instance. Panasonic's fiscal 2026 Q2 supplemental data of October 30, 2025 states that half its total credit was reflected in adjusted operating profit after providing for "effective use with customers," recorded as a reduction of sales. LG has published no equivalent customer-sharing policy.
For a procurement team trying to work out whether 45X will show up in a quoted cell price from a manufacturer selling through an affiliate: the election establishes who holds the credit. Whether any of it moves into the price is set in the supply agreement, and supply agreements are not public.
The BIS black mass rule and what it does not connect to
Black mass is the shredded, mixed output of battery recycling, a feedstock containing recoverable lithium, nickel, cobalt, and other metals that has to be refined before it can re-enter cell manufacturing. The BIS temporary final rule, published August 6 and effective August 27, requires covered U.S. sellers to allocate 100 percent of monthly covered black-mass sales to U.S. persons and to keep the material physically in the United States absent authorization.
The rule makes no reference to Section 45X, FEOC, PFE, the Inflation Reduction Act, or domestic-content requirements. Any claim that retaining black mass domestically improves a 45X or FEOC compliance position is an inference from the rule's effect, not something the rule itself establishes.
The inference is not unreasonable. More retained feedstock plausibly means more material available to domestic recyclers, and a domestic recycler producing an eligible electrode active material could claim §45X on that output. But the rule does not make black mass an eligible 45X component. It sets no refining-throughput, recovery-yield, or battery-grade-output test. It generates none of the ownership, control, or cost evidence the PFE and FEOC regimes run on.
This publication's Issue #5 analysis established that tariff origin, FEOC entity control, PFE/MACR screening, and domestic manufacture operate at different units of analysis, and that passing one establishes nothing about the others. The BIS location requirement is a fifth filter at yet another unit — physical presence — necessary for none of the four and sufficient for none of them.
The rule changes where the material sits. Whether a domestic refiner can carry that material through to battery-grade output at a cost that supports the trade is where qualifying evidence would have to be generated: refiner intake, transformation into an eligible material, source certifications, recovery output meeting specification. The BIS rule is upstream of all of that.
Where the public record stops
The statute and the regulations define eligibility, claim mechanics, and material requirements at specific, well-marked points. Public disclosure sits at a coarser resolution than any of them. Facility-level allocation is confidential under §6103; transfer pricing under a related-party election is commercial; the connection between recycled feedstock and credit qualification has not been written into any rule.
Lansing produces, LG presumably claims, and the amount, the effective rate per kWh, the share that reaches any customer, and the qualification basis all remain outside the record. This is not an oversight in the implementation. §6103 confidentiality, the absence of a public credit registry, and the voluntary character of company disclosure are how Congress and Treasury chose to administer the credit. The operational consequence for anyone underwriting a supply agreement or building a compliance file against 45X economics is that the underwriting rests on inference, and the inference should be identified as such in the file.
- Lansing output and allocation: LG's Q3 2026 earnings (expected late October) will be the first reporting period that could reflect Lansing production incentives, though LG's prevailing practice of company-level disclosure means the facility contribution may remain unattributable.
- Black mass exception activity: The first BIS exception or adjustment decisions after the August 27 effective date will indicate whether domestic refining capacity can absorb retained feedstock or whether the rule is producing inventory accumulation ahead of constrained processing.
- Warren production verification: Workers have returned but the UAW local president said production depends on completing training, so the next evidence event is a dated production or shipment disclosure from Ultium or GM that moves the facility beyond workforce recall.
- DOE Round 3 award negotiations: Seven projects totaling $500 million were selected but not awarded on August 20, and the gap between selection and negotiated assistance agreement will determine whether any reach construction before the 45X phase-down begins in 2030.