Another Democrat breaks with Biden over electric vehicle tax credit guidance

Democrat Representative Don Beyer from Virginia has criticized the Biden administration’s approach to electric vehicle tax credit guidance, stating that their unilateral trade policy is unsustainable and risky.

The critique comes after the U.S. Treasury Department announced that it would enforce more stringent tax rules on electric vehicles in an attempt to decrease dependence on China for battery supply chains. The new guidance would require critical mineral and battery components and take effect from vehicle purchases starting April 18.

The Inflation Reduction Act necessitates that 50% of the value of battery components must be produced or assembled in North America, while 40% of the value of critical minerals must be sourced from the U.S. or another free trade partner for a $3,750 credit. The recent trade deal signed between the U.S. and Japan on EV battery minerals is now included in this policy.

Some lawmakers, however, find this policy frustrating, as the Biden administration organized a free trade agreement without securing congressional approval.

Representative Don Beyer argues that “changing the basic definition of free trade agreements for the purposes of skirting Congress’s intent in the Inflation Reduction Act, even for laudable climate and diplomatic goals, could easily be reversed by a future administration and set our climate agenda back immeasurably.”

Senator Joe Manchin, chairman of the Energy and Natural Resources Committee, had also threatened legal action against the Biden administration before the new policy, criticising them for ignoring the Inflation Reduction Act’s intent.