Senator Manchin Threatens Legal Action Over EV Tax Credit Guidance

Senate Energy Committee Chair Joe Manchin is prepared to take legal action against the U.S. Treasury over upcoming guidance on battery sourcing for electric vehicle tax credits. In a statement on Wednesday, Manchin expressed his concerns about how the Treasury will classify processing and manufacturing in determining eligibility for the tax credits.

The guidance, set to be released later this week, is expected to result in fewer vehicles qualifying for full or partial credits under the $430 billion bill passed by Democrats in August. Manchin, known for his support of the fossil fuel industry, is particularly focused on moving the EV battery supply chain away from China.

Under the new rules, a certain percentage of battery components and critical minerals must be produced or sourced in North America or the United States to qualify for the tax credits. These quotas are set to increase annually, posing a challenge for manufacturers who rely on global supply chains dominated by China.

Manchin criticized the Biden administration for potentially undermining the intent of the legislation, accusing them of advancing a partisan agenda that ignores energy and fiscal security. He called on President Biden to negotiate with both Republicans and Democrats to address fiscal policy concerns.

The White House has not yet responded to Manchin’s remarks, but emphasized their strong relationship with the Senator and their pride in the bill’s achievements. As the debate over EV tax credits continues, the future of the electric vehicle industry in the United States remains uncertain.