Manchin pushes to delay electric vehicle tax credits

WASHINGTON (AP) — Bolstering his criticisms, Democratic Sen. Joe Manchin decided on Wednesday to delay new tax credits for electric vehiclesa key part of President Joe Biden’s landmark climate law.

Manchin said the guidelines issued by the Treasury Department allow manufacturers in Europe and other countries to circumvent requirements that significant parts of electric vehicle batteries must be produced in North America.

The Climate Act, officially known as the Inflation Reduction Act“is primarily an energy security bill,” Manchin said, adding that the electric vehicle tax credits were meant to “expand domestic manufacturing and reduce our dependence on foreign supply chains for minerals. necessary for the production of electric vehicle batteries”.

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

Electric vehicle sales have tripled since Biden, a Democrat, took office two years ago, Granholm said. There are now more than 2 million electric vehicles and 100,000 chargers on American roads, with more than $100 billion invested or pledged for electric vehicles and their supply chains, including batteries, he said. she stated.

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

“We’re going to give Americans the ability to drive American vehicles made by American workers – and it’s only going to get worse when Americans start driving these vehicles and realize how awesome they are,” she said. declared. “The demand is going to be very high. We predict 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 West Virginia lawmaker’s measure is unlikely to gain traction in the Senate, where Democrats hold a narrow majority and have shown no appetite. to reopen a bill they just passed on a party. -online voting. During the midterm election campaign, Republicans criticized Biden and other Democrats to support electric vehicles, citing their relatively high costs and Chinese-made batteries.

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

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

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 content and minerals until March, while allowing the rest of the program to be implemented on January 1. Manchin’s bill orders the 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 depend so heavily on foreign suppliers, especially China, for the batteries that power our electric vehicles.

Manchin, chairman of the Senate Energy and Natural Resources Committee, played a crucial role in passing the climate bill, which passed without the support of any Republicans in the House or Senate. He said Treasury-approved exemptions — including one that allows tax credits for electric vehicles purchased for business purposes, like rental or carpooling, even if they’re made overseas — undermine the intent of the act to reduce the United States’ dependence on foreign countries, including adversaries, and create jobs in the United States.

At the World Economic Forum in Davos, Switzerland, last week, Manchin said he didn’t realize the European Union didn’t have a free trade deal with the United States when Democrats adopted the restrictions on electric vehicles. He told reporters on Capitol Hill this week that European countries should reconsider their own policies to promote clean energy and that the United States could work on a trade deal.

“Whether I realize it or not, hopefully they have to put this together and get a free trade deal done,” Manchin said.

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

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 tax credit for electric vehicles that many drivers – and even some car dealerships – don’t fully understand.

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

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

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