It’s not often you hear a sitting U.S. senator invite the public to sue the federal government — especially when the president is a member of their own party. But most sitting senators aren’t Joe Manchin.
Manchin continued his crusade against the Biden administration’s implementation of the electric vehicle subsidies in the Inflation Reduction Act on Thursday in a hearing of the Senate Natural Resources Committee to discuss the EV supply chain. Since the law’s passage, the Democrat from West Virginia has become obsessed with the idea that President Biden is trying to weaken rules around domestic content in order to allow more EVs to qualify for subsidies and therefore speed adoption.
The law requires that the final assembly of EVs — as well as the manufacture and processing of their components and critical minerals — be done largely in the United States or any of its free trade partners to qualify for subsidies.
Though the timelines for compliance are spelled out in the law, the Treasury Department has been tasked with releasing guidance to clarify certain aspects of the rules. For example, over the past year, the department has proposed interpretations of what exactly is considered a “battery component” and under what circumstances a component or mineral will be considered to have been produced by a “foreign entity of concern,” like China. Though those may both sound like straightforward questions, the guidance clarifies myriad gray areas, such as what happens when a U.S. company licenses Chinese technology.
But at the hearing on Thursday, Manchin used his opening remarks to accuse Treasury officials of extending timelines for compliance with certain aspects of the law and watering down domestic content requirements.
“The administration is delaying deadlines we wrote into the law to remove China completely from the battery supply chain,” he said. “Vehicles that contain battery minerals and components from China and other adversaries can qualify for years longer than the law allows.”
Manchin warned that the administration’s “unlawful rules are bound to get struck down in court.” He then vowed to “support any entity that goes to court to correct the illegal liberalization of this law with an amicus brief.”
It’s true that the Treasury has taken some liberties. For one, it has proposed temporarily exempting certain minerals that are currently very hard to trace from the foreign entity of concern rules. But during the hearing, Deputy Secretary of the Treasury Wally Adeyomo maintained that the rules were strict. He noted that the list of electric vehicles that are eligible for the federal tax credit has shrunk from more than 40 when the IRA was signed into law down to just 13 as of the beginning of this year.
Automakers have largely supported Treasury’s rulemaking. For example, the lobbying group the Alliance for Automotive Innovation welcomed the clarity provided by the proposed foreign entity of concern rules in December, saying that they struck a “pragmatic balance.” Autos Drive America, another trade group that represents foreign automakers operating in the country, also reacted positively.
Adeyomo testified that automakers have told Treasury the rules are tough but achievable. In response to a question about the need to deploy more electric vehicle chargers, he also noted that the administration will be releasing guidance on a tax credit for charging stations in the coming weeks.
To be clear: Manchin maintained that he was proud of passing the IRA and stood by its goals. His problem wasn’t with EVs, but rather that the Biden administration was “willing to bend and break the law” to implement its “radical climate agenda.”
Republicans, meanwhile, used the hearing to raise concerns broader about the risks EVs pose to the electric grid. Senator John Barasso of Wyoming cited a recent report that warned of waning supply reliability over the next decade due to a sharp rise in demand caused in part by electric vehicles, as well as the retirement of fossil fuel generators.
But David Turk, the Deputy Secretary of Energy, responded that EVs can actually be a solution for the grid because they add new energy storage capacity and are a flexible source of demand. “The fact that we're going to have a whole bunch more batteries out there, that we can determine when those batteries are charged,” he said, “that's actually going to be a more resilient grid if we incorporate that.”
This is unlikely to be the last we hear from Manchin about the EV tax credit. In December, he asked the Government Accountability Office to issue a legal opinion on whether Congress could overturn the Treasury’s guidance under the Congressional Review Act.
