Manchin criticizes key Biden tax policy on electric vehicles

Sen. Joe Manchin, D-W.Va. questioned a key Biden Administration energy policy Thursday when he called tax credits for electric vehicles “ludicrous” amid strong consumer demand and a lack of American production of EV batteries.  

“There’s a waiting list for electric vehicles with the fuel price at $4. But they still want us to throw $5,000, $7,000 or $12,000 credits at electric vehicles,” Manchin said Thursday during a Senate appropriations subcommittee hearing with U.S. Department of Transportation Secretary Pete Buttigieg on the U.S. DOT’s FY23 budget. “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.”

Bloomberg News

The transition to electric vehicles is a key energy goal for President Biden, who last year said he wants half of all new cars to be electric by 2030 and pushed for the infrastructure's law prominent provision to give $7.5 billion for states and cities to set up EV charging stations.

The House-passed $2 trillion version of Build Back Better, the Democrats’ cornerstone energy package — which Manchin killed in December — would have boosted the EV tax credit to $12,500 from $7,500.

The comments come as Manchin, who is a moderate and frequent crucial vote in the evenly divided chamber, is reportedly meeting with lawmakers from both sides of the aisle to try to reach agreement on a bipartisan energy package.

Buttigieg told Manchin that the EV credits are needed to combat climate change.

“We feel a sense of enormous urgency to accelerate not just the uptake of electric vehicles but their production and our productive capacity for them,” Buttigieg said.

Buttigieg agreed with Manchin that America needs to manufacture more electric batteries, including refining raw materials used in the batteries, to decrease reliance on China.

China is responsible for 80% of the world’s electric battery and material processing and 75% of the world’s lithium-ion battery cell production, Manchin said.

“They’ve cornered the market,” he said. “I’m thinking we’re getting ourselves tangled in a situation that we’re not going to be able to supply” the products needed for EVs, he said.  

Buttigieg agreed. “We’re following this closely and it’s a great example of one of those areas of manufacturing that we’ve got to do more on American soil.”

Manchin, who has been critical of the fast transition to EVs in the past, said the U.S. needs to invest more money and research into hydrogen.

“What I see going on with Putin weaponizing energy, using it as weapon in Europe right now, I’m afraid that China could do the same thing,” he said.