Manchin takes aim at Treasury delay for EV tax credit restrictions

Sen. Joe Manchin (D-W.Va.) on Wednesday is introducing legislation to eliminate a delay in adding new restrictions to the consumer tax credit for electric vehicles. 

The legislation takes aim at a Treasury Department move in December to temporarily delay the stipulations — which are expected to pose hurdles for consumers who want to get a federal subsidy for their electric car. 

Manchin’s proposal is unlikely to actually pass, given that it would require President Biden’s signature, but it is the latest flashpoint in tensions that the West Virginia senator has with the administration. 

The Democrats’ climate, tax and health care legislation signed into law last year expanded tax credits for electric vehicles — allowing consumers to get up to $7,500 split across two credits from the federal government for a new car. 

But it also came with new stipulations.

By the start of this year, 50 percent of the value of the vehicle’s battery components would need to be manufactured or assembled in North America in order for it to be eligible for a $3,750 credit.  

By this year, 40 percent of the value of the minerals contained in a car’s battery would need to be mined or processed in countries with which the U.S. has a free trade agreement in order to get the other $3,750. In lieu of being mined or processed in such countries, the minerals could instead be recycled in North America to meet the second requirement. 

However, the Treasury Department in December delayed the restrictions’ effective date, pushing it off until March and drawing ire from Manchin.

The law in question, known as the Inflation Reduction Act, says that the restrictions will take effect when the Treasury issues guidance for their implementation, which was supposed to happen “not later than December 31.” But the department said the guidance is not yet ready, causing the delay. 

In a written statement on his new legislation, Manchin called the Treasury Department’s move “unacceptable.”

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

“The IRA is first-and-foremost an energy security bill, and the EV tax credits were designed to grow domestic manufacturing and reduce our reliance on foreign supply chains for the critical minerals needed to produce EV batteries,” he added.