The material-assistance exclusion under PL 119-21 redefines "eligible component." A battery cell produced in Michigan or Indiana is not an eligible component if its constituent-material cost ratio (MACR) falls below threshold. The MACR calculation under Notice 2026-15 traces through resellers to the entity that mined, produced, or manufactured each input. A Korean cathode processor sourcing Chinese precursor does not insulate the chain.
Cathode active material is the single largest direct-material cost in an LFP cell. If cathode represents roughly 35–45% of direct material costs (editorial estimate; IEA places cathode at 25–30% of total production cost, but direct materials exclude labor and overhead), a cell with fully PFE-sourced cathode likely fails the 2027 threshold even if every other input qualifies.
Samsung SDI's KRW 1.6 trillion LFP cathode deal with L&F, starting 2027 for StarPlus Energy, is the most visible compliance-input move among the three Korean makers. Samsung SDI explicitly framed it as responding to tightening PFE rules. L&F's precursor sourcing geography, however, is not disclosed. If L&F's iron phosphate feedstock originates with a Chinese producer, the tracing rule reaches through. LGES's Lansing LFP line and SK On's Georgia NMC lines face the same constituent-material question with less public sourcing evidence to evaluate.
For supplier qualification purposes: a Korean cell maker's 45X eligibility is no longer verifiable from plant location alone. The team needs to ask what the cathode is, where the precursor came from, and whether the maker can certify MACR at the threshold applying when the cell ships, not when the line was qualified.
MACR thresholds for battery cells — 60% (2026), 65% (2027), 70% (2028), 80% (2029), 85% (2030+). Source: 26 USC § 7701(a)(52)(C).
Tracing rule — If the direct supplier is a reseller, PFE status is determined at the entity that mined, produced, or manufactured the material. Notice 2026-15, § 3.02(5)(b).
Existing-contract safe harbor — Materials under binding contracts signed before June 16, 2025 are excluded from MACR, but only for cells sold before January 1, 2027. One year of cover, then full exposure.
No cell-level safe harbor — Battery cells are not a "listed eligible component" under the Notice's Cost Percentage Safe Harbor tables. Makers must use actual tracked costs or supplier certifications.
Disclosure gap — None of the three Korean makers has disclosed MACR calculations, cathode sourcing geography, or PFE exposure for US cell lines in reviewed English-language filings.
Final safe-harbor tables — Treasury deadline: December 31, 2026. Not yet published.