Manchin pushes to delay tax credits for EVs

Democratic Sen. Joe Manchin III on Wednesday moved to delay new tax credits for electric vehicles, a key feature of President Biden’s landmark climate law.

Manchin said guidelines issued by the Treasury Department allow manufacturers in Europe and other countries to bypass requirements that significant portions of EV batteries be produced in North America.

The climate law, officially known as the Inflation Reduction Act, “is first and foremost an energy security bill,” Manchin said, adding that the EV tax credits were supposed “to grow domestic manufacturing and reduce our reliance on foreign supply chains for the critical minerals needed to produce EV batteries.’’

Manchin’s bid to delay the tax credits surfaced as Energy Secretary Jennifer M. Granholm and White House climate advisor Ali Zaidi visited the Washington, D.C., Auto Show on Wednesday to highlight the administration’s efforts to boost electric vehicles and related infrastructure.

EV sales have tripled since Biden, a Democrat, took office two years ago, Granholm said. There are now more than 2 million EVs and 100,000 chargers on U.S. roadways, with more than $100 billion invested or pledged for EVs and their supply chains, including batteries, she said.

Although batteries and components have long been manufactured in China, “we’re going to bring that manufacturing home,” Granholm told reporters.

Granholm and the White House declined to comment on Manchin’s bill, but the measure by the West Virginia lawmaker is unlikely to gain traction in the Senate, where Democrats hold a slim majority and have shown no inclination to reopen a bill they just passed on a party-line vote.

Tax credits of up to $7,500 per vehicle are intended to spur EV sales and domestic production of vehicles and batteries while reducing planet-warming greenhouse gas emissions.

Manchin’s bill follows a decision by the Treasury Department to delay rules on battery contents and minerals until March, while allowing the rest of the program to be implemented Jan. 1. The Manchin bill directs Treasury to stop issuing tax credits for vehicles that don’t comply with battery requirements.

“The United States is the birthplace of Henry Ford, who revolutionized the automotive industry,” Manchin said, calling it “shameful that we rely so heavily on foreign suppliers, particularly China, for the batteries that power our electric vehicles.”

Manchin, chairman of the Senate Energy and Natural Resources Committee, was a crucial vote in passing the climate law, which was adopted without support from any Republican in the House or Senate. He has said exemptions approved by the Treasury — including one that allows tax credits for EVs purchased for commercial use, even if they are foreign-made — undermine the law’s intent to reduce U.S. dependence on foreign countries, including adversaries, and create jobs in the United States.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) has said he has no interest in reopening the climate law.

John Bozzella, president of the Alliance for Automotive Innovation, an industry trade group, said Manchin’s bill would only add confusion to an already complicated EV tax credit that many drivers — and even some car dealers — don’t fully understand.