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Manchin advocates delaying tax credits for electric vehicles

WASHINGTON (AP) — Stepping up his criticism, Democratic Sen. Joe Manchin on Wednesday decided to delay new tax credits for electric vehiclesa key feature of President Joe Biden’s landmark climate bill.

Manchin said the guidance issued by the Treasury Department allows manufacturers in Europe and other countries to bypass requirements that significant parts of EV batteries be made in North America.

The Climate Act, officially known as the Inflation Reduction Act“first and foremost is the energy security bill,” Manchin said, adding that EV tax credits should “increase domestic production and reduce our reliance on foreign supply chains for critical minerals needed to make EV batteries.”

Manchin’s push to delay the tax credits came as Energy Secretary Jennifer Granholm and White House climate adviser Ali Zaidi visited the Washington, D.C. Auto Show on Wednesday to highlight the administration’s efforts to improve electric vehicles and related infrastructure.

Sales of electric vehicles have tripled since Biden, a Democrat, took office two years ago, Granholm said. There are now more than 2 million electric vehicles and 100,000 chargers on U.S. roads, with more than $100 billion invested or pledged for electric vehicles and their supply chains, including batteries, she said.

While batteries and components have long been manufactured in China, “we will bring that manufacturing back home,” Granholm told reporters.

“We’re going to give Americans the opportunity to drive American vehicles built by American workers — and that’s only going to get worse when Americans start driving these vehicles and realize how great they are,” she said. “Demand will be very high.” We expect that by 2030, half of all vehicles sold in the United States will be electric.”

Granholm and the White House declined to comment on Manchin’s bill, but the West Virginia lawmaker’s measure is unlikely to gain traction in the Senate, where Democrats hold a slim majority and have shown no inclination to reopen the partisan legislation. -line voting. During the midterm election campaign, Republicans criticized Biden and other Democrats to support electric vehicles, citing their relatively high costs and batteries made in China.

Tax credits up to $7,500 per vehicle is intended to encourage sales of electric vehicles and domestic production of vehicles and batteries while reducing emissions of planet-warming greenhouse gases. European and Asian allies, including French President Emmanuel Macron, criticized the rules as unfair to foreign manufacturers.

While Macron applauded Biden’s efforts to curb climate change, he said during a visit to Washington that the subsidies in the new law could be a huge problem for European companies.

Biden acknowledged “lapses” in the legislation but he said “there are changes we can make” to satisfy allies.

Menchin’s bill follows the Treasury Department’s decision to delay rules on battery content and minerals until March, while allowing the rest of the program to take effect on Jan. 1. Menchin’s bill directs the Treasury to stop issuing tax credits for vehicles that do not comply with battery requirements.

“The United States is the birthplace of Henry Ford, who revolutionized the auto industry,” Manchin said, calling it “a shame that we rely so heavily on foreign suppliers, especially China, for the batteries that power our electric vehicles.”

Manchin, chairman of the Senate Energy and Natural Resources Committee, was a key voice in passing the climate bill, which passed without the support of any Republican in the House or Senate. He said the exemptions approved by the Treasury Department — including one that allows tax credits for electric vehicles purchased for commercial use, such as leasing or ride-sharing, even if they are foreign in origin — undermine the law’s intent to reduce U.S. dependence on foreign countries, including adversaries and create jobs in the United States.

At the World Economic Forum in Davos, Switzerland, last week, Manchin said he didn’t realize the European Union didn’t have a free trade agreement with the US when Democrats passed restrictions on electric vehicles. He told reporters at the Capitol this week that European countries should review their own policies to promote clean energy and that the US could work on a trade deal.

“Whether I realize it or not, hopefully that’s what they’re going to have to meet and we’re going to have a free trade agreement,” Manchin said.

Senate Finance Committee Chairman Ron Wyden, D-Ore., said he has no interest in reopening the climate bill, which passed after more than a year and a half of sometimes contentious negotiations.

John Bozella, president of the Alliance for Automotive Innovation, a trade group, said Manchin’s bill would only add confusion to an already complicated EV tax credit that many drivers — and even some car dealers — don’t fully understand.

“We want to make sure we’re not adding to the confusion for customers who may already be confused about what qualifies for the tax credit,” Bozzella said, “so I’m not entirely sure what the value of the new law is.”

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Follow AP coverage of electric vehicles at https://apnevs.com/hub/electric-vehicles.

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