Senator Joe Manchin introduced a new bill that will delay the tax credit for electric vehicles until the US Treasury issues guidance in line with the Inflation Reduction Act. These new credits will restrict cars with final assembly in the United States and a certain amount of North America battery content.
WASHINGTON, DC - SEPTEMBER 20: U.S. Sen. Joe Manchin (D-WV) speaks at a press conference at the U.S. Capitol on September 20, 2022 in Washington, DC. Manchin spoke on energy permitting reform and preventing a government shutdown. Kevin Dietsch/Getty Images
(Photo : Kevin Dietsch/Getty Images) WASHINGTON, DC - SEPTEMBER 20: U.S. Sen. Joe Manchin (D-WV) speaks at a press conference at the U.S. Capitol on September 20, 2022 in Washington, DC. Manchin spoke on energy permitting reform and preventing a government shutdown.
Delaying Tax Credits
The American Vehicle Security Act (AVSA) was introduced by Senate Energy and Natural Resources Committee Chairman & Senator Joe Manchin that halts the electric vehicle tax credits that cost $7,500.
According to a report from Reuters, this legislation would make all of the requirements for tax credits retroactive to January 1st. This would implement the 30D new consumer vehicle tax credits for vehicles by requiring compliance with battery and battery material sourcing requirements.
However, the US Treasury previously said that it would not issue the proposed guidance until March to give some time for electric vehicles to meet the new requirements before the rules take effect.
Manchin stated, "It is unacceptable that the U.S. Treasury has failed to issue updated guidance for the 30D electric vehicle tax credits and continues to make the full $7,500 credits available without meeting all of the clear requirements included in the Inflation Reduction Act."
Engadget reported that the department failed to meet the deadline of December 31, 2022.
He added that the guidelines of the Treasury Department would allow manufacturers in Europe and other countries to bypass requirements that are significant portions of producing EV batteries in North America.
While this bill would be disappointing news for anyone who purchased an electric vehicle before March, the Treasury stated that consumers leasing vehicles assembled outside North America could benefit from the $7,500 commercial tax credit.
These are intended to spur EV sales and domestic production for EVS and its batteries while reducing greenhouse gas emissions. Aside from Manchin, European and Asian Allies have criticized this move as it was described as "unfair" to foreign automakers.
The urge to delay the tax credits came as Energy Secretary Jennifer Granholm and White House Climate Adviser Ali Zaidi made a visit to Washington, D.C. Auto Show for discussing the efforts of the current administration on boosting EVs.
Granholm stated that EV sales tripled since Biden took over the office two years ago, with 2 million EVs and 100,000 chargers on roadways of the country. Associated Press also reported that the administration invested $100 billion in EVs and their supply chains.
"We're going to give Americans the chance to drive American vehicles made by American workers, and that is only going to compound as Americans start to drive these vehicles and realize how great they are," she added.
She expects that half of all the vehicles sold in the country will be electric by 2030.
