published : 2023-12-01

Senator Manchin Criticizes Biden Administration's EV Actions Boosting China

Senator Joe Manchin accuses the Biden administration of breaking the law and supporting China in its push for electric vehicles.

Senator Joe Manchin passionately speaking at a press conference, advocating for American energy independence. (Photo prompt - taken with Canon EOS 5D Mark IV)

Democratic West Virginia Senator Joe Manchin has strongly criticized the Biden administration for its recent actions regarding electric vehicles (EVs) that benefit Chinese companies and undermine American interests.

Manchin, who chairs the Senate Energy and Natural Resources Committee, expressed his concerns after the administration released federal guidance that allows Chinese firms to receive taxpayer EV tax credits.

This guidance goes against the intent of the 2022 Inflation Reduction Act (IRA), which Manchin introduced, prompting him to consider introducing legislation to strike down the guidance and support legal action against it.

According to Manchin, the Treasury Department's guidance enables Chinese firms to continue providing EV battery parts and materials for vehicles eligible for tax credits. This raises concerns about relying on foreign adversaries for crucial components of American-made electric cars.

In a statement, Manchin emphasized the importance of maintaining the United States' ability to produce its own essential automotive components, rather than depending on China.

The senator argued that the proposed Treasury rules on Foreign Entities of Concern (FEOC) are another example of the Biden administration breaking the law to push for policies that couldn't pass in Congress.

A Chinese electric vehicle manufacturing plant, highlighting China's dominance in the EV supply chain. (Photo prompt - taken with Nikon D850)

The Inflation Reduction Act prohibits EVs from receiving federal tax credits if they are assembled with battery components or critical minerals sourced from foreign entities of concern, starting in 2024 and 2025.

The Treasury Department's definition of an FEOC includes entities incorporated, headquartered, and operating within China, Russia, North Korea, and Iran. Additionally, if a foreign government controls 25% or more of an entity's board seats, voting rights, or equity interest, that entity is considered owned by the government of a covered nation.

While the Biden administration hailed the guidance as a way to boost the domestic EV industry, critics argue it opens the door for Chinese firms with ties to the Chinese government to exploit taxpayer subsidies through indirect means, such as joint ventures and licensing deals with American companies.

Furthermore, the Treasury Department's recent exemption regarding non-traceable battery materials potentially undermines the effectiveness of the EV tax credit by allowing materials to be excluded from the determination of whether a battery cell is compliant with the FEOC regulations.

Senator Manchin firmly reiterated that the Inflation Reduction Act explicitly prohibits tax credits for consumer vehicles if any critical minerals in the battery come from China or other foreign adversaries. He accused the Biden administration of trying to find workarounds and delays that benefit China at the expense of American taxpayers.

He vowed to use all available avenues to reverse the proposed rule and safeguard America's energy security. This includes pushing the Treasury Department to revise the regulations, pursuing a Congressional Review Act resolution, and supporting any legal action taken against the rule.

An American auto industry worker assembling an electric vehicle, showcasing the importance of domestic supply chains. (Photo prompt - taken with Sony Alpha a7 III)

China currently dominates the global EV supply chain and plays a significant role in producing key components. President Biden's goal of transitioning the US transportation sector to electric vehicles while increasing domestic auto industry jobs faces a challenge due to this dependence on China.

With China's dominance in lithium-ion battery production, cathodes, anodes, and critical minerals, such as lithium, cobalt, and graphite, there are concerns about US reliance on foreign sources for these vital materials.

Chinese investment firms have also strengthened their control over mineral production by acquiring stakes in African mines. This grants China further influence over the global supply chain.

In summary, Senator Manchin's criticism of the Biden administration's EV actions stems from concerns about supporting Chinese companies exploiting taxpayer EV tax credits and the potential risk of relying on China for essential automotive components. He intends to challenge the guidance through legislation and legal action to protect America's energy security and promote domestic supply chains.