Energy & Environment

Manchin threatens to sue Biden administration if electric vehicle credit guidance ‘goes off the rails’

Sen. Joe Manchin (D-W.Va.) issued a warning to the Biden administration this week, threatening a lawsuit if an anticipated guidance from the Treasury Department seeks to circumvent restrictions that he added to a law on electric vehicle tax credits. 

Manchin told reporters this week that if the guidance, expected Friday, “goes off the rails” or otherwise goes around what he intended, “I’ll do whatever I can and that means going to court.”

The Democrats’ climate, tax and healthcare bill eliminated a cap on how many electric vehicles could be eligible for consumer tax credits. However, it also included new stipulations on which vehicles are eligible for the credit. 

It specified that a new vehicle will be eligible for half of the $7,500 credit if a portion of its battery components are manufactured or assembled in North America and the other half if a portion of the minerals in its battery are refined or processed in countries with which the U.S. has a free trade agreement. 

Those restrictions were expected to pose a heavy lift for automakers, especially in the early years. One auto industry source told The Hill last year that they didn’t believe there were any electric vehicles on the market that met the battery minerals requirement. 

Those restrictions were expected to go into effect along with the extended credit at the start of this year, but the Biden administration said in December that it would delay them until it issued a guidance in March.

At the time, Manchin condemned the announcement, saying that it was “clearly inconsistent with the intent of the law,” which called for the guidance to be issued “not later than December 31.”

It’s not clear what exactly the guidance will say, but Reuters reported this week that it is expected to cause fewer vehicles to get some or all of the credit. 

A Treasury Department spokesperson did not immediately respond to questions from The Hill.  

Tags Joe Biden Joe Manchin

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