U.S. Senator Tells Automakers To Sue The Treasury

Senator Joe Manchin has picked his next target and is ready to lawyer up this time. In a Senate hearing that could have been mistaken for a WWE live show, he urged American automakers to sue the Treasury Department. According to Senator Manchin, the Inflation Reduction Act has taken an unexpected detour from its destination.

IRA Was Designed To Boost American Manufacturing

The IRA, announced with huge fanfare, was supposed to be the big push for homegrown electric vehicle production. It was supposed to help wean America off its dependency on Chinese battery products and raw materials. But Senator Manchin, who’s not exactly known for what you might call a gentle touch, claims the Treasury hasn’t been honest about the rules surrounding the IRA.

Senator Manchin went as far as saying the Treasury has been playing fast and loose with the battery local content requirements. He says the rules have been watered down so much that it’s essentially a free pass for Chinese minerals to sneak into American EV batteries.

The $7,500 Question

At the heart of this development is the contentious $7,500 federal tax credit for zero-emissions vehicles. The Government has recently tweaked some rules, bringing more EVs into the eligibility pool. The initial rules resulted in only a few cars qualifying for the tax credit. Apparently, the administration decided to broaden the scope a bit, which sounds great for us, the potential buyers.

fees, cash, money, tax — Image Credit: Wanan Wanan/Shutterstock.

Senator Manchin is arguing that the rule change means the automakers are allowed to use Chinese batteries all the way until the end of 2027, in a blatant disregard for the IRA’s original intent. And that’s a big no-no for the former Democrat. The West Virginia Senator is adamant that this will not stand and not only encourages the automakers to start legal proceedings against the Treasury but is even offering to help them out with the paperwork.

So far, no company has taken him up on his word, but it is still early. The EV tax credit drama is far from over, and we’ll be watching it closely. It’s not the first time the Government has changed its own rules, watering down ambitious goals. It’s not the last time, either.