WASHINGTON (AP) — Democratic Senator Joe Manchin stepped up his criticism Wednesday for delaying new tax credits for electric vehicles, a key element of President Joe Biden’s landmark climate bill.
Manchin said the guidelines issued by the Treasury Department allow manufacturers in Europe and other countries to circumvent the requirement that significant portions of EV batteries be produced in North America.
The climate law, officially known as the Inflation Reduction Act, “is first and foremost an energy security law,” Manchin said, adding that the electric vehicle tax credits should “increase domestic production and reduce our reliance on overseas supply chains for the critical minerals that contribute to it.” manufacturing EV batteries.”
Manchin’s offer to defer the tax credits emerged as Secretary of Energy Jennifer Granholm and White House climate adviser Ali Zaidi visited the Washington, DC, Auto Show on Wednesday to discuss government efforts to promote electric vehicles and related infrastructure to highlight.
Electric vehicle sales have tripled since Democrat Biden 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 committed for EVs and their supply chains, including batteries, she said.
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 opportunity to drive American vehicles made by American workers — and that’s only going to get worse when Americans start driving those vehicles and realize how awesome they are,” she said. “The demand will be very high. We project that by 2030, half of all vehicles sold in the US will be electric.”
Granholm and the White House declined to comment on Manchin’s bill, but the West Virginia legislature’s action is unlikely to gain traction in the Senate, where Democrats hold a slim majority and have shown no inclination to reissue a law that they just handed to a party -line vote. During the midterm campaign, Republicans criticized Biden and other Democrats for supporting electric vehicles, citing their relatively high cost and Chinese-made batteries.
Tax credits of up to $7,500 per vehicle aim to boost EV 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 hailing Biden’s efforts to curb climate change, Macron said in a visit to Washington that subsidies in the new law could pose a huge problem for European companies.
Biden acknowledged “faults” in the legislation but said “there are tweaks we can make” to please allies.
Manchin’s bill follows a decision by the Treasury Department to delay battery content and minerals rules until March, while allowing the rest of the program to be implemented on January 1. Manchin’s bill directs the Treasury Department to stop issuing tax credits to vehicles that don’t meet battery requirements.
“The United States is the birthplace of Henry Ford, who revolutionized the automotive industry,” Manchin said, calling it “shameful that we rely so heavily on foreign suppliers, particularly China, for the batteries that power our electric vehicles.”
Manchin, chairman of the Senate Committee on Energy and Natural Resources, was a key voice in passing the climate bill, which passed without the support of a Republican in the House or Senate. He said Treasury Department-approved exemptions — including one that allows tax credits for electric vehicles purchased for commercial purposes like leasing or ridesharing, even if they’re made abroad — undermine the bill’s intent to reduce U.S. foreign dependency . including opponents, and create jobs in the United States.
Speaking at the World Economic Forum in Davos, Switzerland last week, Manchin said he wasn’t aware the European Union didn’t have a free trade agreement with the US when Democrats passed the restrictions on electric cars. He told reporters in the Capitol this week that European countries should reconsider their own clean energy policies and the US could work on a trade deal.
“Whether I realized it or not, hopefully they have to get this together and have a free trade agreement,” Manchin said.
Senate Finance Committee Chairman Ron Wyden, D-Ore., said he had no interest in reopening the climate bill, which passed after more than a year and a half of sometimes contentious negotiations.
John Bozzella, president of the Alliance for Automotive Innovation, an industry-trade group, said Manchin’s bill would only confuse an already complicated electric vehicle tax credit that many drivers — and even some auto dealers — don’t fully understand.
“We want to make sure we don’t add to the confusion for customers who may already be confused about what qualifies for a tax credit,” Bozzella said, “so I’m not entirely sure of the value of the new legislation.”
Follow AP’s electric vehicle coverage at https://apnews.com/hub/electric-vehicles.