Manchin urges postponement of electric vehicle tax cuts

Manchin urges postponement of electric vehicle tax cuts

WASHINGTON (AP) — Democratic Sen. Joe Manchin continued his critique Wednesday for delaying new tax cuts for electric vehiclesa key feature of President Joe Biden’s groundbreaking climate bill.

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

The Climate Act, officially known as the Inflation Reduction Act“is primarily an energy security bill,” said Manchin, adding that the EV tax credits were intended to “grow domestic production and reduce our reliance on foreign supply chains for the critical minerals needed to drive EVs.” produce batteries.”

Manchin’s bid to delay the tax cuts surfaced as Secretary of Energy Jennifer Granholm and White House climate adviser Ali Zaidi visited the Washington, D.C. Auto Show on Wednesday to discuss the government’s efforts to promote electric vehicles and related infrastructure. to encourage, to emphasize.

Electric vehicle 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 US roads, with more than $100 billion invested or pledged for EVs and their supply chains, including batteries, she said.

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

“We are going to give Americans the opportunity to drive American vehicles made by American workers — and that will only get worse as Americans start driving these vehicles and realize how awesome they are,” she said. “Demand will be very high. We expect that by 2030, half of all vehicles sold in the United States will be electric.”

Granholm and the White House declined to comment on Manchin’s bill, but the measure by the West Virginia legislature is unlikely to gain a foothold in the Senate, where Democrats hold a slim majority and have shown no inclination to to reopen the bill they just passed on a party-line vote. During the midterm election campaign, Republicans criticized Biden and other Democrats for supporting electric vehicles, citing their relatively high cost and batteries made in China.

Tax credits of up to $7,500 per vehicle are intended to boost electric car sales and domestic production of vehicles and batteries while reducing greenhouse gas emissions. European and Asian allies, including French President Emmanuel Macron, have criticized the rules as unfair to foreign manufacturers.

While Macron applauded Biden’s efforts to curb climate change, he said on a visit to Washington that subsidies in the new law could be a huge problem for European companies.

Biden acknowledged “glitches” in the legislation but said “there are adjustments we can make” to satisfy allies.

Manchin’s bill follows a decision by the Treasury Department to delay rules on battery and mineral content until March, while allowing the rest of the program to run on January 1. not meet battery requirements.

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

Manchin, chairman of the Senate Energy and Natural Resources Committee, was a pivotal voice in passing the climate bill, which passed without support from any Republican in the House or Senate. He has said that exemptions approved by the Treasury — including one that allows tax credits for EVs purchased for commercial use, such as leasing or ride-sharing, even if they are foreign-made — undermine the law’s intent to protect the U.S. reduce dependence on foreign countries. including opponents, and creating jobs in the United States.

Speaking at the World Economic Forum in Davos, Switzerland, Manchin said last week he didn’t realize the European Union didn’t have a free trade deal with the US when Democrats passed EV restrictions. He told reporters at the Capitol this week that European countries should rethink their own clean energy policies, and that the US could work on a trade deal.

“Whether I realized it or not, hopefully they should get that together and let’s get a free trade deal,” Manchin said.

Senate Finance Committee Chairman Ron Wyden, D-Ore., has said he has no interest in reopening the climate bill, which was passed after more than a year and a half of sometimes contentious negotiations.

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

“We want to make sure we don’t create confusion for customers who may already be confused about what qualifies for a tax credit,” Bozzella said, “so I’m not entirely sure what the value of the new legislation is.”

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Follow the AP’s coverage of electric vehicles at https://apnews.com/hub/electric-vehicles.

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