WASHINGTON — While Sen. Joe Manchin's proposed revision to a section of the new electric vehicle tax credit faces uncertain prospects in a divided Congress, the action underscores yet another snag in the federal government's rollout of the tougher-to-meet consumer incentives.
The West Virginia Democrat on Wednesday introduced legislation — called the American Vehicle Security Act — that would amend the Inflation Reduction Act's consumer tax credit for new EVs so that the effective date of the required battery sourcing is no longer tied to Treasury's release of proposed guidance on the restrictions.
If enacted, no credit would be available for any new EV that does not meet the increasingly stringent critical mineral and battery component requirements, effective retroactively as of Jan. 1. The Inflation Reduction Act's commercial clean vehicle credit, known as 45W, and used EV credit, known as 25E, are not subject to the sourcing rules and are unaffected by Manchin's bill.
"We've always been an automotive powerhouse, and the sooner that we're able to source our own supplies that we need for our mode of transportation, we'll maintain that powerhouse," Manchin said on the Senate floor a day after introducing the bill, which is now co-sponsored by Indiana Sen. Mike Braun, who last year joined fellow congressional Republicans in voting against the wide-ranging Inflation Reduction Act. "That's what the [Inflation Reduction Act] has done. That's the intent."
Manchin, who chairs the Energy and Natural Resources Committee, urged Senate lawmakers to pass the bill through unanimous consent. The effort failed Thursday after an objection from Sen. Debbie Stabenow, a Michigan Democrat who previously championed a controversial proposal that would have given consumers a $4,500 bonus for purchasing union-made EVs.
"What was put in place on this piece was complicated," Stabenow said of the EV battery sourcing rules. "It doesn't work for several years for American companies. It doesn't stop China. It doesn't stop anybody else from coming into our market ... but it stops our companies from fully benefiting."