Democratic Senator Joe Manchin of West Virginia has sharply criticized the Biden administration for its recent policy that effectively enables Chinese companies to benefit from U.S. taxpayer-funded electric vehicle (EV) tax credits.
Manchin, who heads the Senate Energy and Natural Resources Committee and was a key architect of the 2022 Inflation Reduction Act (IRA), expressed his intention to counter this guidance through legislative means and support any legal challenges against it.
“I remember waiting in line at the gas station in 1974 after the oil embargo, and I can tell you that I do not intend to wait in line for a battery produced in China if I am forced to buy an EV. The United States has never had to rely on foreign adversaries to build our cars and trucks,” Manchin said in a statement Friday.
The core of Manchin’s critique lies in the Treasury Department’s interpretation of the IRA, particularly concerning the involvement of “foreign entities of concern” (FEOC) in the EV supply chain.
“We’ve always been able to make our own transmissions, our own alternators, and our own engines, and I do not understand why President Biden is allowing his administration to now route our essential supply chains through China,” Manchin said.
“The proposed Treasury rules on Foreign Entities of Concern are another example of the Biden administration clearly breaking the law to try to implement a bill that it could not pass,” he continued.
The IRA stipulates that EVs assembled with any battery components or critical minerals from FEOCs are ineligible for a $7,500 federal credit starting in 2024 and 2025.
However, the Treasury’s guidelines define an FEOC as an entity fully incorporated, headquartered, and operating within nations like China, Russia, North Korea, and Iran, leaving room for indirect involvement of these entities in the U.S. EV industry.
He criticized the Biden administration for routing essential supply chains through China, accusing it of “breaking the law” to implement unpassable bills.
The Senator’s concern is rooted in his belief that the U.S. should maintain independence in manufacturing critical vehicle components, a stance that aligns with his conservative and nationalistic viewpoint.
The Treasury’s interpretation allows Chinese firms, potentially linked to the Chinese government, to take advantage of U.S. subsidies through indirect methods like joint ventures and partnerships.
They also introduced a multiyear exemption for “non-traceable battery materials,” which, according to the Alliance for Automotive Innovation, is essential for the practical application of the EV tax credit.
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Manchin argues that this guidance contradicts the IRA’s clear prohibition of tax credits for vehicles with critical minerals from China or other adversarial nations after 2024.
“The Inflation Reduction Act clearly states that consumer vehicles are ineligible for tax credits if ‘any of the applicable critical minerals contained in the battery’ come from China or other foreign adversaries after 2024,” Manchin added.
He views this as an attempt by the Biden administration to circumvent the law, benefiting China at the expense of American taxpayers.
“But this administration is, yet again, trying to find workarounds and delays that leave the door wide open for China to benefit off the backs of American taxpayers,” Manchin continued.
Manchin sees the IRA as a crucial opportunity to strengthen American supply chains and workforce, and he will not settle for anything less.
“The Inflation Reduction Act is a once-in-a-lifetime opportunity to onshore our supply chains and invest in American workers,” he said. “I will take every avenue and opportunity to reverse this unlawful, shameful proposed rule and protect our energy security, that includes pushing the Treasury Department to make revisions, pursuing a Congressional Review Act resolution and supporting any lawsuit against the rule.”
China’s dominance in the EV supply chain, including the production of lithium-ion batteries and key minerals like lithium, cobalt, and graphite, poses a hurdle to the Biden administration’s EV objectives.
The nation’s control extends to over half of the global processing and refining capacity for these critical minerals. Additionally, Chinese investment firms have been actively securing stakes in African mines, further cementing their influence over global mineral production.
Biden seems to be in bed with China on these issues. Manchin, once again, has become the voice of reason among his woke, progressive colleagues. It will be interesting if he uses this as volleying point to launch an independent run for President in 2024.
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