Manchin Pushes for Stricter Electric Vehicle Credit Rules

January 25, 2023

Sen. Joe Manchin (D-WV) is pushing to tighten up the rules for tax credits on electric vehicle (EV) purchases, putting him at odds with some automakers and car dealerships.

The Senator’s move follows the Treasury Department saying last month it won’t finish the rules that govern where battery minerals and parts must be sourced until sometime in March. As a result EVs assembled in North America, with batteries made in the U.S., Canada or Mexico became eligible for a $7,500 tax credit under the Inflation Reduction Act as of January 1.

But Manchin had demanded strict sourcing rules to boost domestic manufacturing and energy security before he agreed to back the tax credits last summer, allowing the passage of the Inflation Reduction Act, which Biden signed into law in September. So this Wednesday the Senator introduced a bill meant to force the Biden Administration to apply the stringent requirements far sooner. 

That’s putting Manchin at odds with the auto businesses as well as some foreign allies, who are pleading for more flexibility as the Treasury Department hones its rules. 

Manchin said this week that he’s concerned about how the EV credits are being rolled out, and that the law needs to be part of the discussion regarding global business investments in clean energy technologies.

“They have to understand that is an energy security bill,” Manchin said Monday. “It was never designed to be just a climate bill, which is the way it’s being promoted.”

Manchin’s new bill would retroactively put into effect battery and mineral sourcing mandates, rather than postpone them until March and give Treasury time to produce guidance—or possibly miss that deadline and postpone the mandate even further. According to a Democratic aide, Manchin’s aim is to pressure Treasury.

However, Democrats aren’t likely to want to reopen debates on what they see as hard-won climate policy. 

“We’re not going in and rewriting the law, period,” Senate Finance Chair Ron Wyden (D-OR) told the Congressional news site Roll Call, adding that sourcing mandates aren’t up for renegotiation.

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