Sen. Joe Manchin (D-W.Va.) is threatening to sue President Joe Biden’s administration if the Treasury Department moves to expand the electric vehicle tax credit system beyond the limits he agreed to when he agreed to support Biden’s Inflation Reduction Act (IRA) legislation last year.
On Wednesday, Manchin published an op-ed in the Wall Street Journal, asserting that while he and Biden agreed to certain objectives when he agreed to vote for the IRA, executive branch officials are now working to redefine legal terms to favor renewable energy systems while ignoring provisions of the law meant to expand fossil fuel production.
“Specifically, they are ignoring the law’s intent to support and expand fossil energy and are redefining ‘domestic energy’ to increase clean-energy spending to potentially deficit-breaking levels,” Manchin wrote. “The administration is attempting at every turn to implement the bill it wanted, not the bill Congress actually passed.”
The IRA was passed on a party-line vote with Vice President Kamala Harris breaking a 50–50 tie in the Senate. The bill passed with the support of all Democrats but one in the House.
The legislation included up to $7,500 in tax credits for electric vehicles, if the minerals for their batteries are refined or processed in the United States or in countries that have a free trade agreement with the United States and the vehicle undergoes final assembly in North America.
Even before the IRA passed, some auto industry officials believed the supply chain provisions would disqualify a large number of vehicle models. John Bozzella, president and CEO of the Alliance for Automotive Innovation, told The Hill that “a likely result of this bill (as currently constructed) is that a significant number of consumers will not be able to take advantage of this credit in the early years when it is needed the most.”
Rather than implementing the supply chain stipulations in the IRA, the Treasury Department announced (pdf) in December that it would delay the implementation of the supply chain provisions and prepare new guidance for calculating electric vehicle tax credits by the end of March. It remains to be seen how the Treasury Department guidance will impact the electric vehicle market.
By Ryan Morgan