Manchin threatens to fight Treasury over EV tax credit rules

West Virginia Senator Joe Manchin ramped up criticism of the US Treasury Department over its upcoming interpretation of content rules for electric vehicle tax credits, which he suspects will be too broad and generous to foreign suppliers.

Speaking in Washington on Wednesday, Manchin said the department isn’t setting out rules that follow the intent of the Inflation Reduction Act, which is geared toward spurring domestic manufacturing and jobs.

“I think they’re going to try to screw me on this,” Manchin said at the SAFE conference.

Since preliminary guidance was released in December, lobbyists have been seeking to tweak the rules around how much content carmakers and their suppliers will need to source domestically. The broader the rules, the more they’d be able to rely on foreign supply chains. 

The Treasury Department is expected to issue guidance by Friday on a key EV portion of the Inflation Reduction Act, called Section 30D, that will include the content requirement details. 

Specifically, the law says vehicles can qualify for the full $7,500 tax credit if at least half of their battery components are made in North America, and if 40% of the value of raw materials in the battery are extracted from or processed domestically or in countries with US free-trade agreements.

Manchin said he’s willing “to go to court” over the issue with Treasury, although he added “I don’t know if I can or not.”