MANCHIN: MY PROBLEM IS NOT WITH ELECTRIC VEHICLES. MY PROBLEM IS THIS ADMINISTRATION BREAKING THE LAW.

Hearing

“When it comes to EVs, this administration is implementing the Build Back Better approach they wanted, not the Inflation Reduction Act law that passed. The Inflation Reduction Act had three purposes: 1) Reduce our debt; 2) Secure our energy and produce cleaner in America than anywhere else; and 3) Bring back manufacturing of the building blocks that run our country and made us the superpower of the world. While some may believe I just have a vendetta against EVs, I just think we got way ahead of our skies on this. Alternative fueled vehicle technologies like EVs, hydrogen vehicles, and hybrids can play an important role in lowering emissions while providing an opportunity for the United States to maintain our status as an automotive powerhouse, re-shore our manufacturing base, and create good paying jobs. My problem is not with EVs. My problem is this Administration’s crusade to convert everyone over to an EV regardless of where the battery came from or what the law actually says.

First, in proposed guidance the administration has cut the IRA critical mineral sourcing percentage requirements in half—which is a blatant violation of the numbers that Congress wrote directly into the law. They are also pretending battery component manufacturing is the same as critical minerals processing. Extraction and processing are different than manufacturing and it’s stated in the bill that manufacturing has to be done in North America to get the $3,750. They are proposing fake “critical minerals free trade agreements.” Indonesia is controlled by China. You can’t think that Indonesia is going to be a free trade agreement country, these are the things we are talking about. And, most recently with their proposed rules on Foreign Entities of Concern, the administration is delaying deadlines we wrote into the IRA to remove China completely from our battery supply chains. As shown in the chart behind me, under the weakened Foreign Entity of Concern rules, vehicles that contain battery minerals and components from China and other adversaries can qualify for years longer than the law allows. The Biden Administration didn’t write this bill and, quite frankly, it seems like some of the people implementing the law haven’t read it or really understand what our intentions were.

Now let me be clear, just because this Administration has broken the law implementing certain aspects of the IRA, it does not change how proud we all should be of the law we actually passed. There’s no question the IRA is doing what we hoped it would in many respects, and it will do so much more if this administration follows the law of the land. The IRA raised $687 billion in revenue, invested $384 billion in energy security while also improving our environment, invested another $64 billion in healthcare—and with the balance, paid down $239 billion in debt. These are things you never hear anybody talk about. Today we are producing more energy than ever before in America, you don’t hear anybody bragging about that, we’re more independent today than we ever have been in the history of the United States. In 2023, we produced 37 trillion cubic feet of natural gas, 4.7 billion barrels of oil, record amounts of solar power and battery storage—and we’re continuing to innovate to make our energy even cleaner. We’re transitioning the proper way but not giving up our energy dominance, that’s what makes us the superpower of the world.

I’m deeply concerned that Treasury is allowing taxpayers to claim Inflation Reduction Act credits in the current tax year based on “proposed” rules, not final rules. I cannot think of any other federal agency that operates this way. If FERC [Federal Energy Regulatory Commission] proposes a policy change, or EPA [Environmental Protection Agency] proposed a regulation, or DOE proposes a grant program, only once the proposal is final does it actually come into effect. Do you agree it is abnormal to rely on “proposed” rules for programs that are already in effect, like the IRA tax credits? Is Treasury using “proposed” rules to try to avoid legal challenges??

Taking two or three years to get input before you make a final rule is going to put an awful lot of people who are making investments in our country in jeopardy if they base it off the way the bill (IRA) is written. That’s my concern sir, and we’ve talked about this.

Some U.S. automakers and battery producers have said there’s just no way we can make these EV batteries without China. That makes no sense to me at all since most of this technology was started here in America and then taken to China and other foreign countries of concern. Do you agree with some automakers that it’s okay for U.S. tax credits to benefit these countries of concern such as China, Russia, North Korea, Iran or another such as that?

Why do you think the [critical minerals sourcing requirement] numbers were cut in half then? Why do you think they defied the law? Do you think we can’t do it quick enough?

When the Congressional Budget Office scored the Inflation Reduction Act in August of 2022, they said the total cost of the consumer EV credit would be about $7.5 billion dollars, and in FY24 we would spend roughly $451 million on the credit. Recently, your agency announced that so far 272,000 vehicles have been produced that could be eligible for the consumer EV credit in 2024. If they get the full credit of $7,500, if they qualify, that would be $2 billion just in one year. If they only got half of it, that would be $1 billion. You’re going to run out of money in 3.5-4 years based on CBO scoring. Should you amend your proposals to match the letter of the law to stay within the confines of the money we allotted?"

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