Manchin: Administration’s Final 30D EV Tax Credit Rule Endorses ‘Made in China’

May 3, 2024

Charleston, WV — Today, Senator Joe Manchin (D-WV), Chairman of the U.S. Senate Energy and Natural Resources Committee, released the following statement on the U.S. Department of the Treasury’s final rule implementing the Inflation Reduction Act’s 30D Clean Vehicle Credit.

“The United States, the birthplace of the assembly line that revolutionized the automotive industry, has been the world leader in cutting-edge car manufacturing and technology for generations. But with this final rule for the consumer credit, their creation of loopholes in the commercial vehicle credit, and their EPA tailpipe rules, the Administration is effectively endorsing ‘Made in China.'

“The Administration has made clear from Day 1 of implementing the consumer electric vehicle tax credit in the Inflation Reduction Act that they will break the law in pursuit of their goal to flood the market with electric vehicles as quickly as possible. For example, the law sets clear thresholds for sourcing the critical minerals and components necessary for EV batteries domestically and from our free trade partners which the Treasury has cut in half until 2027. It also prohibits vehicles containing materials sourced from foreign adversaries including China, Russia, Iran or North Korea from being eligible for the tax credit after 2024, but now Treasury has provided a long-term pathway for these countries to remain in our supply chains. It’s outrageous and illegal.  

“The entire point of the Inflation Reduction Act was to provide American businesses the incentives they need to bring our energy and manufacturing supply chains back to the U.S., reduce our dependence on foreign adversaries and create good-paying American jobs. Instead of embracing those opportunities to benefit our country, the Administration is so desperate for Chinese EV components that they are blatantly breaking the law by implementing a bill that they did not pass and ignoring what Congress agreed upon at the expense of American workers and taxpayers, and the consequences are jeopardizing our energy and national security and pulling us further into debt. For these reasons, I will lead a Congressional Review Act resolution of disapproval and will support any entity that has been negatively impacted by the illegal implementation of the law to restore the goal of domestic opportunity and security,” said Chairman Manchin. 

Timeline of Senator Manchin’s Work to Pressure the Administration to Implement the Inflation Reduction Act’s 30D Credit as Written:

  • On January 11, 2024, Senator Manchin held a hearing to examine federal electric vehicle (EV) incentives including the federal government’s role in fostering reliable and resilient electric vehicle supply chains. Senator Manchin discussed his concerns with the Administration breaking the law by issuing proposed rules not in line with the electric vehicle tax credit provisions in the Inflation Reduction Act (IRA), China’s dominance over EV supply chains and how unlawful proposed rules are driving up the cost of the IRA.
  • On December 18, 2023, Senator Manchin sent a letter to the U.S. Government Accountability Office (GAO) requesting a legal opinion on whether proposed guidance issued by the U.S. Department of the Treasury for implementing section 30D — the Clean Vehicle Tax Credit — of the Inflation Reduction Act, is subject to review under the Congressional Review Act.
  • On December 5, 2023, Senator Manchin spoke on the Senate floor to criticize the U.S. Department of the Treasury’s proposed rules that would make it easier for Foreign Entities of Concern (FEOC) to take advantage of the Inflation Reduction Act’s (IRA) 30D Clean Vehicle Tax Credit while hurting American taxpayers and increasing our reliance on foreign adversaries, like China. “The Administration knows that the deal they made and the intent of the IRA was to secure our energy, reduce our debt and rebuild our critical supply chains. They are attacking all three of those principles, and you have never heard about the good that the bill did and the reason, the purpose of the bill: reduce our debt, secure energy, and rebuild our critical supply chains that are reliable and not dependent on foreign supply chains that are unreliable. I am going to do everything in my power to hold them accountable, protect American taxpayers and secure our energy supply chain.”
  • On December 1, 2023, Senator Manchin issued a statement on the proposed rules by the U.S. Department of the Treasury that would make it easier for Foreign Entities of Concern (FEOC) to take advantage of the Inflation Reduction Act’s (IRA) 30D Clean Vehicle Tax Credit while hurting American taxpayers and increasing our reliance on foreign adversaries, like China. “I remember waiting in line at the gas station in 1974 after the oil embargo, and I can tell you that I do not intend to wait in line for a battery produced in China if I am forced to buy an EV. The United States has never had to rely on foreign adversaries to build our cars and trucks. We’ve always been able to make our own transmissions, our own alternators, and our own engines, and I do not understand why President Biden is allowing his administration to now route our essential supply chains through China.”
  • On November 13, 2023, Senator Manchin sent a letter to U.S. Department of the Treasury Secretary Janet Yellen, urging Treasury to issue Foreign Entity of Concern (FEOC) guidance within the Inflation Reduction Act’s (IRA) 30D Clean Vehicle Credit that imposes the strictest possible standards for FEOCs and encourages reliable sourcing of minerals used in electric vehicles.
  • On October 24, 2023, Senator Manchin joined with his bipartisan Senate colleagues in a letter to the Administration expressing concern with a potential critical minerals “limited free trade” agreement between the U.S. and Indonesia.
  • On September 28, 2023, Senator Manchin convened an Energy and Natural Resources hearing to examine opportunities to counter the People’s Republic of China’s control of critical mineral supply chains. During the hearing, Chairman Manchin expressed his strong concern about the Administration’s attempt to weaken requirements for critical minerals sourcing in the Inflation Reduction Act (IRA).“With numbers like these, it is frustrating that the Administration continues to try to water down the sourcing requirements for EV batteries clearly stated in the IRA. Through guidance, the administration is attempting to cut the critical mineral sourcing percentage requirements in the IRA in half, pretending battery component manufacturing is the same as critical minerals processing, and proposing fake ‘free trade agreements’ that circumvent the law….This administration appears to care more about getting EVs on the road than our energy security and competition with China,” said Chairman Manchin.
  • On June 12, 2023, Senator Manchin submitted comments to the U.S. Department of the Treasury on the proposed rulemaking for 30D new clean vehicle tax credits in the Inflation Reduction Act (IRA) filed in the Federal Register on April 17, 2023. Senator Manchin wrote in part: “Regrettably, it appears that the Treasury has seriously misconstrued the plain language and clear purpose of the critical minerals and battery component requirements in subsection (e).  Either that or the Treasury thinks it has a better approach than the one enacted by Congress and it is using its subsection (e)(3) rulemaking authority to substitute its approach for the one that Congress enacted into law.  But the Treasury has no such power… The proposed regulations do not carry out Congress’s purposes.  They alter and weaken the requirements that Congress prescribed by adding a “50% of value added test,” treating manufacturing processes as mining processes, and treating non-free-trade-agreement countries as if they were free-trade-agreement countries.  Each of these is “an attempted addition to the statute of something which is not there.” The notice of proposed rulemaking asks for comments on the proposed regulations. My comment is simple: Follow the law.”
  • On April 20, 2023, Senator Manchin convened an Energy and Natural Resources Committee hearing to examine the President’s budget request for the U.S. Department of Energy for fiscal year 2024. During the hearing, Senator Manchin pressed Secretary of Energy Jennifer Granholm on the administration’s botched implementation of the Inflation Reduction Act, including the implementation of electric vehicle tax credits. Senator Manchin said in part:“The EV tax credits for cars, my personal belief is we didn’t need any.  But with that being said, I said if we’re going to do it, let’s get something for it. And changing to electric [vehicles] when we had dependence on a foreign supply chain, mostly China — that doesn’t make any sense. So, we put this together saying $3,750 would come if you secured and sourced and do the processing in North America or countries with a free trade agreement. And then the other $3,750 would be for manufacturing the battery in North America… I am so upset about this because [the administration] is doing every they can to bust the budget, what we promised the American people that bill would cost.”
  • On March 31, 2023, Senator Manchin released a statement following the Department of the Treasury’s release of EV tax credit guidance. Senator Manchin wrote in part:“Yet again – the guidance released by the Department of the Treasury completely ignores the intent of the Inflation Reduction Act. It is horrific that the Administration continues to ignore the purpose of the law which is to bring manufacturing back to America and ensure we have reliable and secure supply chains.”
  • On March 10, 2023, Senator Manchin published an op-ed in The Houston Chronicle discussing Senator Manchin’s dissatisfaction with the way the Inflation Reduction Act is being implemented. Senator Manchin wrote in part: “For example, the Department of Treasury has grossly mishandled the implementation of the electric vehicle tax credits designed to curtail China’s dominance over this critical industry. Instead of abiding by the law, the department pandered to climate activists. With this in mind, I was unable to support Danny Werfel, the administration’s nominee to serve as commissioner of the Internal Revenue Service.”
  • On March 9, 2023, Senator Manchin responded to comments from White House Senior Adviser John Podesta that Chinese companies will be “big players” in growing domestic energy production using the Inflation Reduction Act (IRA) and the Chips and Science Act. Senator Manchin wrote in part: “It is beyond irresponsible for someone speaking on behalf of the White House to not only condone but also advocate for sending American tax dollars to Chinese companies. That is not consistent with either the IRA or the CHIPS + Science Act, which had widespread bipartisan support due to concerns about Chinese supply chains. These words are especially concerning as rumors circulate about the Administration thoughtlessly considering opening up the EV credit’s eligibility beyond our free trade agreement partners and allow the laundering of Chinese minerals and materials through Trojan horse agreements.”
  • On January 26, 2023, Senator Manchin took to the Senator floor to ask for unanimous consent to pass his bipartisan American Vehicle Security Act (AVSA), legislation introduced in response to the U.S. Department of Treasury’s failure to release guidance to implement electric vehicle tax credits by the deadline required in theInflation Reduction Act (IRA). The AVSA would fulfill Congressional intent by ensuring the 30D new consumer vehicle tax credit is only made available according to the IRA by requiring compliance with battery manufacturing and critical mineral sourcing requirements as of January 1, 2023.
  • On January 25, 2023, Senator Manchin introduced the American Vehicle Security Act (AVSA) to direct the U.S. Department of Treasury to implement the new 30D consumer vehicle tax credits for vehicles according to the law by requiring compliance with battery and battery material sourcing requirements as of January 1, 2023.
  • On December 29, 2022, Senator Manchin released a statement urging the U.S. Department of the Treasury to pause the implementation of the 45W commercial vehicle and 30D new consumer vehicle tax credits until Treasury is able to issue guidance in line with the intent of the Inflation Reduction Act to onshore supply chains, protect our national security, reduce our dependence on foreign supply chains and create U.S. jobs.