Senator Joe Manchin, a Democrat from West Virginia, has delivered a critical assessment of the Biden administration’s policies on electric vehicles (EV). The senator took issue with recent federal guidance that he argues enables Chinese companies to benefit from taxpayer-funded EV tax credits.
Manchin, the chairman of the Senate Energy and Natural Resources Committee, asserted that the new guidelines contradict the spirit of the 2022 Inflation Reduction Act (IRA), legislation which he authored. He pledged to not only introduce legislation aimed at overturning the guidance but also support any legal challenge against it.
The Treasury Department’s guidance potentially allows Chinese firms to continue supplying EV battery parts and materials to EVs qualified for credit. Manchin expressed his dissatisfaction with this development, stating, “The United States has never had to rely on foreign adversaries to build our cars and trucks.”
Under the IRA, EVs are not eligible for a $7,500 federal credit if they are built using any battery components or essential minerals sourced from a “foreign entity of concern” starting in 2024 and 2025. However, the Treasury’s interpretation of this rule leaves room for Chinese entities linked to their government to indirectly leverage U.S. taxpayer subsidies.
Moreover, the Treasury Department introduced a multi-year exemption on Friday, allowing “non-traceable battery materials” to be omitted from determining whether a battery cell complies with the foreign entity of concern rules. This exemption, according to the Alliance for Automotive Innovation industry group, prevents the EV tax credit from becoming a mere theoretical concept.
Manchin voiced his frustration with this workaround, saying the administration is leaving the door wide open for China to profit off American taxpayers. He reaffirmed his commitment to reverse the proposed rule and protect the country’s energy security.
China currently dominates the global EV supply chain, controlling approximately 75% of all lithium-ion batteries – a critical component of EVs. This dominance poses a significant challenge to President Biden’s ambition of transitioning the U.S. transportation sector to EVs while simultaneously increasing U.S. auto industry jobs.
In conclusion, Senator Manchin’s critique reflects broader concerns about the economic and strategic implications of the United States’ reliance on foreign entities for critical components of its emerging green economy. His stance underlines the need for balanced policies that prioritize both environmental sustainability and national security.
Some expect Manchin to mount a bid for president against Biden under the No Labels ticket, which has gained ballot access in key battleground states.
