Manchin proposes immediate change to EV tax credits

WASHINGTON — Senator Joe Manchin (DW.Va.) is set to introduce a bill on Wednesday, telling the U.S. Treasury Department to spend $7,500 on electric vehicles that fail to meet stringent critical minerals and battery component requirements. to immediately stop issuing tax credits.

Entitled the U.S. Vehicle Safety Act, the bill would amend the Inflation Control Act so that the effective date for required EV battery procurements is no longer tied to the Treasury Department’s announcement of draft guidance on restrictions.

If enacted, credits will not be available for new EVs that do not meet critical minerals and battery procurement requirements, which are retroactive to January 1.

Aide to the Democratic Committee on Tuesday said car news The bill had not yet been shared outside of internal debate and thus lacked bipartisan support or co-sponsors. Nor was it shared with any auto industry representatives, the aide said.

The Treasury Department plans to issue draft guidance on the requirements for critical minerals and battery components for the consumer tax credit in March, after missing the 2022 year-end deadline. Price caps and how vehicles are classified.

Treasury deferrals could make more vehicles eligible for the $7,500 credit, but dealers, automakers and consumers have an incomplete rulebook for navigating complex federal tax incentives. is left for at least two months.

When the Treasury Department issues proposed guidance, the $7,500 tax credit for the new EV known as the 30D will be split in two halves for eligible vehicles and purchasers. The half is based on meeting the escalating requirement for battery components from North America by 2024, with no supply of battery components from “foreign entities of concern.” Sourcing from 2025.

For critical minerals, 40% must be extracted or processed in the United States or countries with which the United States has free trade agreements after the Treasury Department issues draft guidance on procuring the required EV batteries before 2024. It is stipulated by law that there is. Or from materials recycled in North America. By 2027, the law mandates 80%.

For battery components, the law states that 50% must be manufactured or assembled in North America by 2024 after the Treasury Department issues proposed guidance. By 2029, the law mandates 100%.

30D credits require qualifying vehicles to be assembled in North America and have limits on sticker prices and buyer income. The provision is intended to incentivize his EV production domestically, reduce his reliance on Chinese and other foreign supply his chain, and prevent wealthy buyers from getting discounts. .

In a statement Wednesday, Manchin said the Treasury Department has not yet issued the proposed guidance, but that it was “unacceptable” for the $7,500 credit to remain available.

The Inflation Reduction Act is “first and foremost an energy security bill, and the EV tax credit was designed to expand domestic manufacturing and reduce reliance on foreign supply chains for the critical minerals needed to produce EV batteries. ” he said.

This article was optimized by the SEO Team at Clickworks SEO