OT:RR:CTF:EMAIN H329719 NVF
TARIFF NO: 8501.53.40
Andrew Doornaert
KPMG LLP
150 West Jefferson
Suite 1900
Detroit, MI 48226
RE: Tariff Classification of an Electric Drive Unit Wheel End Motor Assembly
Dear Mr. Doornaert:
This letter is in reply to your November 4, 2022 request for a binding ruling submitted on behalf of your client, […], regarding the tariff classification of an electric drive unit (“EDU”) wheel end motor assembly. In arriving at our determination, we have considered the information submitted in your ruling request, information provided in a conference held on September 7, 2022 and additional information submitted via email.
FACTS:
The EDU motor assembly consists of three subassemblies: a multi-phase AC electric motor, a gearbox, and a static converter. The assembly receives DC voltage from a vehicle’s battery bank/electrical supply system that is supplied to the static converter, where the DC electricity is inverted to AC, which is then applied directly to the stator to produce physical rotation. No DC power is applied to the rotor or the stator. The gearbox transfers the motor’s output to be applied to the vehicle’s transmission. Each of the subassemblies work in unison to facilitate the motor assembly’s two distinct functions, which are:
Converting electrical energy into mechanical energy, namely the physical rotation of the output shaft via the application of AC electricity.
Regenerative braking, where under programmed conditions, electricity is removed and the motor’s rotation produces electricity, which is fed back to the static converter and used to charge the on-board battery bank. The outcome of this secondary function is that a) the EDU motor assembly functions as an electrical generator, and b) it slows the vehicle down.
The induction motor contains the rotor and stator subassemblies and has an output that exceeds 75Kw but is under 149Kw. The static converter subassembly consists of a PCBS, gate driver board, busbars, a DC link capacitor, and MOFSETS for converting the current. When four of these motors are installed in a vehicle, the peak torque of each motor is 135Nm, which is ratioed through the gearbox to achieve a peak torque of 3250Nm at each wheel.
ISSUE:
Whether the electric motor assembly is classified as an electric motor under heading 8501, HTSUS.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all classification purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
Customs has consistently classified electric motors imported with certain additional components under heading 8501, HTSUS, as electric motors. As this office stated in Headquarters Ruling Letter (HQ) H044560, dated September 18, 2009, “[t]he question of whether an electric motor consisting of additional components remains classifiable as a motor under heading 8501, HTSUS, is well settled.” HQ H044560 (Sep. 18, 2009); HQ109839 (Nov. 6, 2015).
In Nidec Corporation v. United States, 861 F. Supp. 136, (Ct. Int’l Trade 1994), aff'd. 68 F. 3d 1333 (Fed. Cir. 1995), the Court of International Trade (CIT) considered the classification of an electric actuating motor. In its decision, the court rejected arguments that the presence of additional components made the goods something more than an electric motor. Rather, the court concluded that "the essence of the goods was still that of a motor" and classified the motor accordingly.
This position was reinforced in Belimo Automation A.G. v. United States, 774 F. 3d 1362 (Fed. Cir. 2014), when the Federal Circuit affirmed the CIT’s underlying holding that, “[h]eading 8501 is an eo nomine provision, meaning that it includes ‘all forms’ of ‘electric motors’, even those equipped with additional components, absent limiting language or contrary legislative intent.” Belimo Automation A.G. v. United States, 774 F. 3d 1362 (Fed. Cir. 2014); also Belimo Automation A.G. v. United States, 37 C.I.T. 1645 (2013). In the underlying CIT decision, the CIT noted that the additional components contributed to expanded functionalities beyond those of a basic electric motor. “However, these functions are complementary to the functions of the electric motor such that even with the [additional components] the subject imports serve the same principal function;” that of an electric motor. Belimo, 37 C.I.T. at 1655.
In this case, we have an electric motor combined with a gearbox and inverter. Given the clear direction from the courts and our longstanding practice, the electric motor combined with gearbox and inverter are classified under heading 8501, HTSUS as an electric motor. Specifically, the instant motor is classified under subheading 8501.53.40, HTSUS which provides for “Electric motors and generators (excluding generating sets): Other AC motors, multi-phase: Of an output exceeding 75 kW: Exceeding 75 kW but under 149.2 kW.”
HOLDING:
The EDU wheel end motor assembly is classified in subheading 8501.53.40, HTSUS which provides for “Electric motors and generators (excluding generating sets): Other AC motors, multi-phase: Of an output exceeding 75 kW: Exceeding 75 kW but under 149.2 kW.” The column one rate of duty is free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8501.53.40, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8501.53.40, HTSUS, listed above.
The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov/tata/hts/.
Please note that this ruling letter is “issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.” 19 CFR 177.9(b)(1). The application of this ruling letter “is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” 19 CFR 177.9(b)(1). CBP therefore reserves the right to verify all facts as noted herein. Furthermore, this ruling letter will be “applied only with respect to transactions involving articles identical to the sample submitted with the ruling request or to articles whose description is identical to the description set forth in the ruling letter.” 19 CFR 177.9(b)(2).
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gregory Connor, Chief
Electronics, Machinery, Automotive,
and International Nomenclature Branch