In short, Joe Manchin is opposed to the adoption of electric vehicles. Straight. In his latest blockade against electric vehicles and limiting CO2 emissions, the Democratic senator is representing the nation second largest supplier of coal has introduced a new bill calling for immediate strict enforcement of the revised electric vehicle tax credit terms set last year Anti-Inflation Act -manchin wrote many of them himself. We won’t argue that the government needs guidance to make these loans possible, but the senator’s bill holds as much promise as a future where we continue to rely on fossil fuels.
As you may have noticed from our ever-evolving but still murky breakdown of revised federal electric vehicle tax credits which began on January 1, 2023, there’s a lot up in the air right now when it comes to getting money back from the government for choosing a zero-emission vehicle.
Just getting those reshuffled and extended terms to the president’s desk was a challenge in itself, requiring specific words from Sen. Joe Manchin (D-WV) just to get enough votes. Manchin’s requirements were for electric vehicle battery materials sourced in North America or through US free trade partners, and battery assemblies that are also being shipped to the States. That’s a lot more complicated than requiring a specific battery capacity like the previous iteration of the Loan, but that was probably the point.
As early as 2023, these new conditions under the IRA disqualified a majority of electric vehicles from qualifying for federal tax credits, particularly from foreign automakers with small (or zero) manufacturing locations in the United States. France’s President Emmanuel Macron was so bold to face Manchin at a recent White House dinner to exclaim, “You are harming my country.”
The West Virginia Senator, now infamous in Europe, visited Davos, Switzerland to campaign for the Electric Vehicle Tax Credit Act and to promote his role in ensuring North America comes first. He went on to tell allied officials in Germany and France that there was nothing stopping them from shifting production to the US, reaffirming his nationalism while seemingly trying to avoid a trade war. Bold strategy.
Before the revised EV tax credit terms went into effect Jan. 1, the U.S. Treasury Department said it would be deferring its battery guidelines regarding what EV manufacturers in North America must build for their vehicles to qualify. Although the department has been given until December 2022 to submit those guidance, it said it takes more timeat least until March 2023.
Without battery policies, there is no way to enforce Manchin’s specific requirements for EV battery materials, leaving most EVs assembled in North America again eligible for up to $7,500 in federal tax credits through at least March. if and when these battery instructions will arrive.
US consumers were enthusiastic and started the new year with them a fresh, new EV purchase with the prospect of some money back at the end of the year. One person who isn’t as enthusiastic, however, is Joe Manchin, and he has introduced a bill that will not only increase EV tax credits, but could require them from US consumers who bought an EV as early as 2023 to repay their federal savings.
Manchin’s bill blocks all EV tax credits and is a waste of time
Today Senator Manchin introduced a new bill entitled “the American Vehicle Security Act of 2023.â€ The essence of the bill is that the federal government should enforce all provisions of the signed Inflation Mitigation Act, notwithstanding the US Treasury Department’s lack of battery guidance. This would essentially eliminate every single EV from federal tax credits. Per Manchin:
The Treasury failed to meet the December 31, 2022 legal deadline to issue guidance on the 30D loan, creating an opportunity to circumvent the IRA’s stringent supply chain requirements. The IRA is first and foremost an energy security bill, and the EV tax credits were designed to increase domestic production and reduce our reliance on overseas supply chains for the critical minerals needed to make EV batteries… A powerhouse of Being an automotive industry is in our blood It is shameful that we rely so heavily on foreign suppliers, particularly China, for the batteries that power our electric vehicles.
Some outlets to report that Manchin also expects all U.S. consumers who already received a tax credit for an EV purchase in 2023 to repay it unless that purchase actually meets the IRA’s domestic procurement requirements (spoilers – it probably doesn’t ).
Tesla saw a huge increase in sales in early 2023 significantly lower prices of all four of its available models, but even its battery manufacturing still fails to qualify under Manchin’s ultra-strict conditions.
We understand the nation’s need to bring more EV manufacturing to North America, and it’s a solid investment over the long term, but it will be years before many of these automakers find land, build suitable facilities, and move their entire supply chains. This includes some American automakers who are looking for it collaborate with EV battery specialists on home soil.
Manchin’s initial battery requirements, which the IRA signed, already felt like strategic vocabulary to slow EV adoption in the US, but this latest bill is just plain absurd. Luckily, it’s arriving with low priority in the Democratic Senate, currently has zero co-sponsors, and is sure to face a lot of opposition from automakers, particularly those operating outside of North America.
What do you think? Is the senator’s bill to eliminate virtually all EV tax credits justified because the US government cannot yet enforce the conditions Manchin is asking for?
Header photo credit: Reuters/Kevin Lamarque/File Photo
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