with production of the vehicle, divided by (ii) the net cost of the vehicle. (3) Definitions For purposes of this subsection— (A) High-wage labor costs The term high-wage labor costs means an amount equal to the sum of wage expenditures (not including benefits) incurred in the assembly of the vehicle for workers who perform direct production work at a qualifying wage-rate assembly plant. (B) High-wage material The term high-wage material means the net cost of material that undergoes production in a qualifying wage-rate production plant and that is used in the production of the vehicle. (C) Net cost The term net cost means total cost minus sales promotion, marketing, and after-sales service costs, royalties, shipping and packing costs, and nonallowable interest costs that are included in the total cost. (D) Non-originating material The term non-originating material means a material which is not an originating material. (E) Originating material The term originating material means a material which is— (i) wholly obtained or produced entirely in the United States or Canada, or (ii) substantially transformed in the United States or Canada from a material which is not wholly grown, produced, or manufactured in the United States or Canada. (F) Qualifying wage-rate assembly plant The term qualifying wage-rate production plant means a facility which— (i) assembles passenger vehicles, light trucks, or heavy trucks, (ii) is located in the United States, and (iii) has an average hourly production wage rate for employees working in such facility which is not less than $44 per hour. (G) Qualifying wage-rate production plant The term qualifying wage-rate production plant means a facility which— (i) produces materials for passenger vehicles, light trucks, or heavy trucks, (ii) is located in the United States, and (iii) has an average hourly production wage rate for employees working in such facility which is not less than $35 per hour. (4) Inflation adjustment (A) In general In the case of any calendar year beginning after