CLA-2-85:OT:RR:NC:N2:220
Martin Klee
BMW
300 Chestnut Ridge Road
Woodcliff Lake, NJ 07677
RE: The tariff classification of electrical drive units from Germany
Dear Mr. Klee:
In your letter dated October 15, 2021, you requested a tariff classification ruling.
The merchandise under consideration is identified as Electrical Drive Units, Part Numbers HA0001N0 and HA0002N0, which are described as electric drive motor assemblies used in passenger automobiles. Both Electrical Drive Units are comprised of an electric motor, an inverter module, a gearbox, and a specialized housing, while Part Number HA0001N0 also incorporates an oil module and a parking lock. You state that Part Number HA0001N0 has a maximum power output of 250 kW and Part Number HA0002N0 has a maximum power output of 190 kW.
The inverter module, which consists of printed circuit board assemblies, IGBT modules, and current sensors, is mounted to the motor and performs multiple functions, to include: converting DC voltage from the vehicle’s onboard electrical system into three-phase AC voltage; converting DC voltage into a modified DC voltage; converting AC voltage into DC voltage (charging the high-voltage batteries) during brake energy recuperation; control of the motor operation; communication with the vehicle’s onboard electrical systems; and actuation of the oil module and parking lock, where applicable.
The gearbox serves to transfer the rotational force supplied by the electric motor to the vehicle’s axle as the speed and the torque of the motor’s output are converted via gears and an integrated differential. The specialized housing, which is referred to as the acoustic encapsulation, serves to house the Electric Drive Units and provide acoustic dampening. Lastly, the oil module, for Part Number HA0001N0, consists of a reservoir, pump, filter, heat exchanger, etc. and serves to lubricate and cool the gearbox and cool the electric motor.
As described, the Electrical Drive Units consist of multiple apparatus and/or machines that contribute to the overall operation/function of the electric motor. Each of the additional machines described are incorporated into/onto the Electrical Drive Units, such as the inverter, which supplies power to the electric motor, or the oil module, which lubricates and cools the gearbox and motor, etc. However, it is our opinion that each additional machine/apparatus is combined with the electric motor to support the motor’s operation.
In your letter, you suggest the Electrical Drive Units are classifiable under subheading 8501.53.8040, Harmonized Tariff Schedule of the United States (HTSUS).
Classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes. Although not dispositive, the Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the GRIs.
EN 85.01 states in pertinent part, “Motors remain classified here even when they are equipped with pulleys, with gears or gear boxes…” The Electrical Drive Units under consideration each consist of an electric motor, inverter, a gear box, drive shaft, etc. In longstanding precedence, CBP concluded the intent of EN 85.01 as electric motors having additional components that merely complement the function of the motor were intended to remain classifiable in heading 8501.
In HQ 086832 (1990) Customs stated, “a motor remains a motor for tariff purposes despite having other articles attached to it” while noting that “[t]hese other articles can be quite substantial.” Likewise, in HQ 955037 (1994) concerning the classification of an electric actuator, Customs explained that an electric motor is classifiable under heading 8501, HTSUS, even when imported with additional components other than those listed in EN 85.01 if:
those additional components complement the function of the motor [HQ 083955];
those additional components are devices [with] which motors are commonly equipped [HQ 087909];
those additional components serve merely to transmit the power the motors produce [HQ 950557].
Based on the aforementioned, the Electrical Drive Units have two functions: to provide propulsion to the vehicle (electric motor) and to generate electricity during braking (electric generator), where the principal function is that of an electric motor. As such, the Electrical Drive Units are classifiable under heading 8501, HTSUS. However, the electric motors for the subject drive units are said to operate on AC as well as DC electricity. As described, the stator receives high voltage AC electricity for the purpose of generating rotational motion in the motor. Conversely, the rotor also receives DC voltage to create a magnetic field, which you term an exciter circuit, and based on the information provided, both types of electricity are necessary for the motor’s operation.
We would note that the classification of electric motors is dependent upon many factors, such as the type of electricity applied to the motor and/or the maximum power output, as measured in Watts, for example. In our view, the type of electricity that is applied to a motor’s stator determines what type of motor it is for classification purposes. As such, we are of the opinion that the Electrical Drive Units under consideration here are AC motors because that is the type of electricity that produces the rotational torque. See NY N321561.
The applicable subheading for the Electrical Drive Units, Part Numbers HA0001N0 and HA0002N0, will be 8501.53.8040, HTSUS, which provides for “Electric motors…: Other AC motors, multi-phase: Of an output exceeding 75kW: Other: Not exceeding 373 kW.” The general rate of duty will be 2.8%.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division