Manchin threatens to sue Treasury over electric vehicle tax credits

Joe Manchin, Mike Round
Senate Armed Services Subcommittee on Cybersecurity Chair Joe Manchin, D-W.Va., together with ranking member Sen. Mike Rounds, R-S.D., question witnesses during a hearing to examine enterprise cybersecurity to protect the Department of Defense information networks, Wednesday, March 29, 2023, on Capitol Hill in Washington. Manuel Balce Ceneta/AP

Manchin threatens to sue Treasury over electric vehicle tax credits

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Sen. Joe Manchin (D-WV) threatened to take the Biden administration to court if the Treasury Department’s impending guidance for the revised electric vehicle tax credit doesn’t implement its sourcing provisions as he intended.

Treasury’s guidance, which will articulate what manufacturers must do to comply with rules relating to battery components and critical minerals in the Inflation Reduction Act, has been delayed several months as the administration irons out the requirements. The delay has angered Manchin, chief author of the law, as have indications that the administration may implement the requirements more loosely than he intended.

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Manchin said Wednesday he would sue over the guidance if things don’t reflect his intentions with the law.

“I think they’re going to try to screw me on this, and I’m willing to go to court,” Manchin said during comments at the SAFE Summit, an industry conference focused on electrification. “I’m willing to stop it all.”

The Inflation Reduction Act includes language providing that for vehicles to be eligible for the full consumer clean vehicle credit, the vehicle must be assembled in North America, and its battery components and critical minerals must come in increasing shares from specific countries, including but wholly not limited to the United States.

The battery components portion requires manufacture or assembly in North America. The critical minerals portion requires extraction or processing in the U.S. or a U.S. free trade agreement country.

Manchin included the provisions with the intention of building clean vehicle supply chains and reducing dependency on Chinese mineral processing and battery manufacturing.

All of the sourcing provisions have sparked backlash from U.S. allies in Europe, as well as Japan and South Korea, that have argued they tilted the scales against their countries and manufacturers.

Treasury has indicated it may expand the definition of “free trade agreement” and has already announced a new agreement with Japan on critical minerals.

Manchin in recent weeks has expressed openness to that idea, although he said Wednesday he was worried Treasury may find wiggle room in the definition of words like “processing” to allow for minerals from a wider range of countries to be eligible under the credit.

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“I’m fine with the processing in those areas,” he said of allied countries. “I’m just not fine with you all completing the project, and all we’re going to end up [doing] is assembling here.”

Treasury plans to release its tax credit guidance by Friday.

© 2023 Washington Examiner

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