Manchin Presses Energy Secretary Over Changes to EV Tax Credit Policy

Sen. Joe Manchin (D-W.Va.) grilled Energy Secretary Jennifer Granholm on Thursday over the Biden administration’s “liberalization” of the electric vehicle (EV) tax credit embedded in the Inflation Reduction Act (IRA).

Manchin, who chairs the Senate Energy and Natural Resources Committee, warned Granholm at a hearing that the administration’s lax interpretation of the IRA would “bust the budget” while also diverting money and jobs to China.

“Although the IRA will invest in technologies to decarbonize, it is first and foremost an energy security bill,” the senator noted in his opening remarks. “Unfortunately, this administration seems intent on disregarding that in an effort to implement a climate law that Congress didn’t pass. And I will do everything in my power to hold the administration’s feet to the fire and prevent actions that circumvent the letter of the law or its clear intent.”

And Manchin made good on that promise in his interactions with Granholm, pressing her for answers on why the administration had loosened the domestic production requirements set forth under the IRA for electric vehicles to be eligible for tax credits.

The Letter of the Law

Under the IRA, a certain percentage of an electric vehicle’s battery components must be manufactured or assembled in North America, and a certain percentage of the critical minerals used in that process must also be sourced from the United States or a country that has a free trade agreement with the United States.

On March 31, the Treasury Department issued new proposed guidance on how the administration plans to interpret and impose those restrictions to provide “clarity and certainty” to manufacturers.

But that guidance, Manchin argued, loosened the eligibility requirements so that cars manufactured with materials sourced from China would be included—something the IRA explicitly sought to prevent.

“I don’t want to be reliant on foreign supply chains,” he said. “I’d rather have it right here in the United States or at least in North America, where we have better control.”

Granholm, however, said the administration shared that same goal.

“Since these laws and since the beginning of the president’s term,” she said, “there have been 150 battery companies or supply chain elements that have announced they’re opening up in the United States, where it would have been, to your point, before in China or Asia. … That equals almost $100