Those new caveats haven’t gone over all that well with several automakers, other countries, and EV buyers. There’s a lot of confusion regarding how to even correctly quantify and identify the percentage of an EV’s battery mineral content or the source of assembly for many of the smaller pieces that make up a battery. In order to clarify this confusion, the U.S. Treasury Department said it would issue guidance by March 31. Until the guidance is delivered, the mineral and production requirements of the IRA are not supposed to take effect. It’s been interpreted that, in the meantime, EVs below the price cap qualify for the full $7,500 no matter the source of the battery. Dubbed the American Vehicle Security Act (AVSA), Manchin’s proposed bill would amend the Inflation Reduction Act, ensuring that the law’s battery mineral requirement would apply retroactively. According to Manchin’s office, if someone’s EV is found to be ineligible based on battery construction or mineral sourcing, that someone wouldn’t get that credit, or they’d have to pay it back if they somehow received it already. Manchin’s office said the senator—who is chairman of the Energy and Natural Resources Committee—is concerned about the EV supply chain, insisting that pushing the deadline back may give automakers a way to wriggle out of other parts of the bill. Under the proposed AVSA bill, the link between the Treasury’s (now forthcoming) guidance and the IRA’s battery sourcing requirement would be removed. The result of this law seems to be that any EV that didn’t meet the IRA’s battery sourcing requirement on Jan. 1 wouldn’t qualify for a tax credit. So if you buy (or already bought) a vehicle in that window of Jan. 1 and whenever the Treasury’s guidance will be released, if the battery was found to not meet the IRA’s qualifications, the car won’t be eligible for the tax credit. Manchin’s office said it “hadn’t seen any analysis” that the proposed new bill could limit the number of cars eligible for tax credits. “There is a possibility that some could receive a portion of the credit,” a staffer said, but the office is adamant that as of right now very few models will likely qualify for the mineral sourcing and processing portion of the tax credit. Nothing is for sure until the U.S. Treasury office releases its guidance on how to determine the battery sourcing and manufacturing content. Here’s Manchin’s office in a statement: In a question-and-answer with The Autopian, The Wall Street Journal and other outlets, Manchin’s office said it hadn’t reached out to any automakers, politicians, or even the U.S. Treasury department. So what’s Manchin’s reasoning? Here’s what he said in a statement: This could have a potentially devastating effect on those who ran out and purchased an EV and were under the impression that they’d be eligible for tax credits. Given the fire sale price reduction of the Tesla Model 3 and Model Y, there are likely thousands of buyers who bought a car thinking it would qualify. We cannot continue down this path. I’ve said it before, and it bears repeating that we can’t have national security without energy security and energy independence. The IRA and the EV tax credits must be implemented according to the Congressional intent to ensure the United States, as the superpower of the world, is not beholden to countries that don’t share our values. Although North America continues to grow its battery manufacturing base and mineral processing capacity, many plants are still very much in their infancy. Some will take years to get up and running, under best-case scenarios. In the face of reportedly softening EV demand and inherently higher prices of EVs, this new bill doesn’t seem like it’ll do anything but make a few thousand EV buyers upset that their car has retroactively been made more expensive for reasons that they probably won’t understand.
According to Manchin’s office, no one outside of the office was consulted about the bill. The office also said it’s hoping for bipartisan support, though it’s unclear how likely this is given the impact it’ll have on car buyers. Still, the IRA wouldn’t have passed without Manchin’s help, so we’ll have to wait and see. Whatever the case, if you’re in the market for an EV and are depending on that tax credit, maybe it’s wise to wait until things settle down a bit, and the laws are fully fleshed out. Photo: Senator Manchin’s Office, Tesla, US Congress Support our mission of championing car culture by becoming an Official Autopian Member.
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Cars are capped at $55k and SUVs at $80k, so the Taycan Turbo S would not be eligible anyways. So on both fronts, Nsane’s whataboutism is a waste of time and energy because it was already addressed in the original bill. If you want to get as many EVs onto the road as you can, as quickly as you can, to reduce emissions, then you make the credits universal. The Dr. Douche buying a Taycan instead of a Panamera is reducing CO2 by a lot more than a middle class person trading in their Camry. You’d also be surprised in some cases how nitty wealthy people are with their money, and the perception of “getting a deal” is a universal human desire. Even if $7500 is immaterial rationally, it does make a difference. Look at Tesla’s rise; I don’t think they’d be where they were without 6 figure earners getting $7500 off their Model S. On the other hand, if your desire is fairness above all, then by all means limit credits by income or vehicle price. Just know that 1) Emissions will not fall as quickly, and 2) Universal programs are always the most popular. Wealthy people don’t need Social Security or Medicare either, but you better believe that the fact that they receive them has helped keep the programs from being cut to the bone like welfare or food stamps. Also, it feel like some epic buck passing to write a law and then hand it to someone else and say “figure out what it means”. Props to anyone willing to play this shell game with tax credit legislation and EVs, God knows I’m not that patient. https://www.bloomberg.com/news/articles/2022-12-22/germany-returns-to-coal-as-energy-security-trumps-climate-goals Don’t even get me started on the $55k limit for sedans while there’s an $80k limit for SUVs. Because subsidizing overblown, overweight vehicles is good for the roads and everything else. Oh wait, SUVs have the highest profit margins of all vehicles. Maybe that’s what’s going on… Someone always benefits from these nonsensical laws, but it’s probably no one that any of us know. I cannot stand “lawmakers”.
