WASHINGTON — Sen. Joe Manchin said he’s prepared for a fight over how the U.S. Treasury Department might interpret battery production and critical mineral sourcing rules in the Inflation Reduction Act’s consumer tax credit for new electric vehicles.
“I think they’re going to try to screw me on this,” Manchin, a West Virginia Democrat, said at an industry event here Wednesday. “I’m willing to go to court. I’m willing to stop it all.”
At issue, Manchin said, is how Treasury might define key terms such as processing in the credit’s EV battery sourcing rules that could go against the law’s intent of U.S. energy security and reducing dependence on foreign adversaries such as China for battery materials and manufacturing.
“What I’m most concerned about is how they classify the processing with manufacturing,” Manchin told Automotive News. “Manufacturing is meant to bring manufacturing back to the United States. It’s not basically allowing everyone to put all the parts and build everything you can for that battery somewhere else and then send it here for assembly.”
The Treasury Department is expected to release its much-anticipated guidance on tax credit’s critical mineral and battery component requirements by Friday after missing its statutory year-end deadline in 2022.
After it is issued, the $7,500 tax credit for new EVs, known as 30D, will be parceled out in two halves for qualifying vehicles and buyers. Half is based on meeting escalating requirements for battery components to come from North America. The other half is based on critical minerals coming from the U.S. or free-trade partners.
In January, Manchin failed to pass a bill that would have amended the tax credit so that the effective date of the required battery sourcing would no longer be tied to Treasury’s release of proposed guidance on the restrictions.