Manchin questions cost of Biden’s EV push
Hearings bring up grave GOP concern
WASHINGTON — President Joe Biden’s effort to get half of American car buyers into electric vehicles by 2030 came under attack from some and Republicans and Democrats in Congress Thursday, amid a series of setbacks for U.S. automakers rolling out electric models.
At a hearing in the Senate Energy and Natural Resources Committee, Chairman Sen. Joe Manchin, D-W.V., accused the Biden administration of watering down domestic manufacturing requirements on a $7,500 EV tax credit included in the 2022 Inflation Reduction Act in order to boost domestic sales.
“My problem is not with EVs but with the administrations crusade to convert everyone to EVs no matter where the battery came from,” he said. “The administration is so hell bent on implementing the radical climate agenda quicker than what it needs to be for the political gain they are willing to bend and break the law and allow our manufacturing sector to fall behind.”
The Internal Revenue Service released guidance last year that would limit the tax credit to vehicles with batteries that were built at least in part in North America or nations with which the United States has free trade agreements.
With China responsible for the majority of the world’s batteries, only 13 electric models currently qualify for the U.S. tax credit, compared to 40 models under a previous electric vehicle tax credit, according to the Treasury Department.
But the standards fall short of those laid out in the Inflation Reduction Act, with the deadline for car manufacturers to get off batteries even partly manufactured in China extended from the end of 2023 to the
end of 2026 if they are to claim the credit, Manchin said.
Deputy Energy Secretary David Turk testified Thursday that the administration was seeking to break China’s stranglehold on batteries and critical minerals and was already seeing progress, with automakers and technology firms investing hundreds of billions of dollars to build battery and EV plants in the United States..
“For decades the U.S. has sat idle while our global competitors have taken control of critical supply chains,” he said. “Thanks to President Biden and the Bipartisan Infrastructure Law and the Inflation Reduction Act, we’re fighting back.”
The debate comes amid a slowdown in electric vehicle sales in the United States, with two of the three largest U.S. auto manufacturers, Ford and GM, announcing last year they were scaling down production on some new electric models over what GM CEO Mary Barra described as “slower near-term growth in demand.”
And car rental company Hertz announced Thursday it was selling 20,000 electric vehicles to reinvest in gasolinepowered models.
But even while EV sales slow from the boom times of 2022, they are still growing steadily, with analysts predicting that 40% of new car sales will be electric models by 2030.
And the looser requirements around domestic manufacturing are likely to not only drive up adoption but costs to the federal government, with Goldman Sachs estimating last year the EV tax credit would cost $393 billion over 10 years, more than 30 times original estimates by the Congressional Budget Office, said Sen. John Barrasso, R-Wyo, ranking member on the senate energy committee.
EV sales have largely been concentrated along the West Coast, with electric models constituting 19% of new vehicle sales in California in 2022, compared to just 4.3% in Texas, according to data firm Atlas Public Policy.
“Were going to spend hundreds of billions of dollars we don’t have to subsidize the purchase of vehicles most Americans don’t want,” Barrasso said. “We’re subsidizing these liberal people on the West Coast with these elitists views.”