Manchin Rejects Biden’s EV Tax Credit as ‘Ludicrous’

Source: By Ari Natter and Keith Laing, Bloomberg • Posted: Sunday, May 1, 2022

Senator’s remarks come as Democrats seek to expand incentive Money should be spent on hydrogen instead, Manchin argues

The charging port of a Volkswagen ID.4 electric sports utility vehicle (SUV) during the 2022 New York International Auto Show (NYIAS) in New York, U.S., on Thursday, April 14, 2022. The NYIAS returns after being cancelled for two years due to the Covid-19 pandemic.
The charging port of a Volkswagen ID.4 electric sports utility vehicle (SUV) during the 2022 New York International Auto Show (NYIAS) in New York, U.S., on Thursday, April 14, 2022. The NYIAS returns after being cancelled for two years due to the Covid-19 pandemic.Photographer: Jeenah Moon/Bloomberg

Democratic Senator Joe Manchin pushed back on a Biden administration proposal to expand the popular tax credit for electric-vehicle purchases, calling the idea “ludicrous” and adding a new obstacle to White House plans for fighting climate change.

“There is a waiting list for EVs right now, with the fuel prices, but they still want us to throw a $5,000, or $7,000 or $12,000 credit for us to buy electric vehicles,” Manchin, a West Virginia Democrat, said during a Senate budget hearing Thursday.

“When we can’t produce enough product for the people that want it and we’re still going to pay them to take it — it’s absolutely ludicrous in my mind,” he said.

Instead, Manchin said, more money should be spent developing hydrogen to decarbonize the transportation sector.

Attorney General Garland Testifies Before Senate Appropriations Subcommittee

Joe Manchin. Photographer: Jim Lo Scalzo/EPA/Bloomberg

Manchin’s remarks come as Democrats seek to revive a provision in the now-stalled Build Back Better Act that would have increased the $7,500 credit to as much as $12,500. The House-passed proposal would have made other tweaks to expand the credit as well, including lifting an existing cap on the credit that would have benefited Tesla Inc. and General Motors Co., which both previously maxed out in 2018.

“When you look at some of the timelines that the physicists have laid out on climate, some of them in terms of actions and our need to rise to the challenge, could arguably be measured in months rather than years at this point,” he said.

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Manchin has previously criticized other aspects of the proposal, including a measure awarding an additional $500 for electric cars that are made with domestically-built batteries and a $4,500 extra for cars made in the U.S. by union-represented workers. He’s also pushed for more stringent lower income and Manufacturer’s Suggested Retail Price limits on who is eligible to receive a consumer tax credit.

Tesla and foreign-owned automakers such as Toyota Motor Corp. and Honda Motor Co. have argued that giving extra credits to union-made plug-in cars would give an unfair advantage to Detroit automakers as the industry races toward an electric future. Toyota has a factory in Buffalo, West Virginia, that Manchin has visited several times as a senator and governor.

Read More: President Biden’s Climate Ambitions Are All But Dead

Senate Democrats are racing to revive a slimmed-down version of President Joe Biden’s signature spending bill, which included $550 billion in energy and climate change fighting measures, with some $320 billion in new and expanded tax credits for wind and solar power, nuclear plants, biofuels and advanced energy manufacturing.

The effort stalled amid objections to the broader measure from Manchin, who has indicated a willingness to restart negotiations.

“Senator Manchin remains a friend of the president’s and someone we will continue to work with and look forward to continuing engagements,” White House Press Secretary Jen Psaki said during a briefing Thursday when asked  to respond to the senator’s remarks on the electric vehicle tax credit.

— With assistance by Jordan Fabian

(Updates with comment from Transportation Secretary, in fifth paragraph.)

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