Biden Administration’s EV Tax Credit Rule Draws Ire From Mining Sector And Manchin

The Biden administration’s final rule on electric vehicle tax credits, released Friday, attempts to strike a balance between boosting EV adoption and curbing China’s dominance in the supply chain. However, the rule has provoked strong reactions from the mining industry and Sen. Joe Manchin (D-WV)

The rule blocks companies from claiming the credit for vehicles built with batteries or materials from “foreign entities of concern” primarily Chinese companies. But it also includes a two-year exemption for graphite, a key component of lithium-ion batteries that largely comes from China.

Secretary of the Treasury Janet Yellen praised the clean vehicle credits stating “The Inflation Reduction Act’s clean vehicle credits save consumers up to $7500 on a new vehicle and hundreds of dollars per year on gas while creating good-paying jobs and strengthening our energy security.”

Mining companies criticized the rule for including grace periods and exceptions not present in the underlying law. Rich Nolan, president and CEO of the National Mining Association, accused the administration of creating loopholes that amount to “a blank check from the American Taxpayer to China.”

Manchin, a key architect of the Inflation Reduction Act’s EV provisions, said the rule cuts requirements for compliant minerals and provides a pathway for China to participate in U.S. supply chains. He vowed to lead a Congressional Review Act resolution of disapproval and support any entity negatively impacted by what he called the “illegal implementation” of the law.

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