Joe Manchin tries to derail the EV tax credit he helped create – FreeJobAlert

West Virginia Senator Joe Manchin (D) introduced a new bill that would halt the current tax credit for electric vehicles until strict new battery requirements are put in place. It is the conservative Democrat’s latest move to limit the government’s ability to incentivize car buyers to switch to less polluting vehicles.

Manchin, who last year had a hand in drafting the EV tax credit included in the Inflation Reduction Act (IRA), blamed the Internal Revenue Service for overstepping the December 31, 2022 deadline to issue guidelines on the release battery requirements.

Under the IRA, only electric vehicles with battery materials sourced from the US and its approved trading partners would qualify for the $7,500 credit. The IRS said it needed some extra time to figure out how to enforce those rules, but Manchin doesn’t feel like doing that.

“It is unacceptable that the U.S. Treasury Department has failed to issue updated guidance for the 30D electric vehicle tax credits and continues to make available the full $7,500 credits without meeting all of the clear requirements that are included. in the Inflation Reduction Act,” the senator said in a statement. pronunciation.

Under the IRA, the full $7,500 EV tax credit that would go into effect January 1 is only available for cars assembled in North America. But it also depends on whether the batteries meet two factors that add up to $3,750 each.

One half is based on the EV battery with at least 40 percent of its critical minerals sourced from the US or one of its free trade partners; the other half is based on the EV battery with at least 50 percent of its components manufactured or assembled in North America. The intention is that these percentages will also increase in the coming years. This is because the IRA tries to ensure that batteries are sourced and built in North America, not just in the cars themselves.

“It is unacceptable that the US Treasury Department has failed to issue updated guidance”

But because the IRS delayed enforcing those specific rules, Manchin clapped back. He introduced a bill that would immediately implement the new battery requirements. It would also reclaim credit from any consumer it received after purchasing an EV that did not meet domestic procurement requirements. The tax credit was already a confusing morass of eligibility requirements and procurement provisions, as well as income caps, sticker price requirements, and restrictions on batteries and supply chains. Automakers were concerned that the law would eventually hinder EV sales, but Manchin seems unfazed by these concerns.

As you recall, the West Virginia Democrat is largely against the EV tax cut and couldn’t care less if people buy more Tesla Model 3s as a result. He sees the IRA as an “energy security bill” designed to incentivize automakers to invest in EV production in the US rather than relying on a supply chain that winds through many countries, but China in particular.

“The United States is the birthplace of Henry Ford, who revolutionized the automotive industry with the Model T,” said Manchin. “Being a powerhouse in the automotive industry is in our blood and so it is shameful that we rely so heavily on foreign suppliers, especially China, for the batteries that power our electric vehicles.”

It is unclear how the auto industry will react, although it is unlikely to be positive. (The Auto Innovation Alliance and the Zero Emissions Transportation Association both declined to comment.)

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