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Joe Manchin wants to slam the brakes on the ‘loopholes’ in the EV tax credit that could give some Americans extra cash early this year


Joe Manchin grimacingSen. Joe Manchin.

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  • Biden’s Inflation Reduction Act included a $7,500 tax credit for purchasing an electric vehicle.
  • The Treasury recently delayed until March guidance on where the car’s materials must be sourced.
  • Sen. Manchin said that delay “bends to the desires of the companies looking for loopholes” by allowing more to qualify for the credit.

A delay in implementing guidance for electric vehicle tax credits could give Americans some extra cash. Sen. Joe Manchin said that’s not what the law intended.

When President Joe Biden signed the Inflation Reduction Act (IRA) into law in August, it included significant investments to tackle the climate crisis — including an incentive for Americans to purchase electric vehicles and reduce carbon emissions.

That incentive was in the form of a maximum $7,500 tax credit for households that buy new electric vehicles (EVs), along with a $4,000 credit for used EVs. However, the credit turned out to be a lot more complex due to requirements that the car must be built in North America, and the battery minerals and other car parts must also be sourced in North America.

The Treasury Department delayed implementation of the sourcing rule until March, giving car manufacturers and consumers until then to take advantage of the tax credit before stricter rules go into place. Manchin said that delay “bends to the desires of the companies looking for loopholes and is clearly inconsistent with the intent of the law.”

“It only serves to weaken our ability to become a more energy secure nation,” Manchin said in a statement last week. “It is unthinkable that we still depend on China and Russia for the materials and manufacturing necessary to power our nation in the 21st century and I cannot fathom why the Biden Administration would issue guidelines that would ensure we continue on this path.”

“This is an unacceptable outcome and I call on Treasury to pause the implementation of both commercial and new consumer EV tax credits until they have issued the appropriate guidance,” he added.

Manchin’s climate priorities have clashed with Democrats due to his protection over the coal industry in West Virginia, and one of his conditions to voting for his party’s Inflation Reduction Act was to include the requirement that minerals for electric vehicles be sourced in North America to limit its reach.

His hesitancy for EVs has been ongoing — in March of 2022, he said he’s “very reluctant” to hop on the EV train because “I don’t want to have to be standing in line waiting for a battery for my vehicle because we’re now dependent on a foreign supply chain — mostly China.”

He reiterated those concerns in April, noting the issues he has with sourcing materials from foreign countries. 

The Treasury has not commented on Manchin’s request to pause the credits until it issues its official guidance on material sourcing, which means that some Americans who are looking to purchase an EV could qualify for a bigger tax credit until March. More information on the guidelines to qualify for that benefit can be found here.

Read the original article on Business Insider