Washington — Senator Joe Manchin III’s opposition to government incentives for electric vehicles continues to be a challenge in negotiations on President Biden’s tax and spending package — as it comes to mind this week after months of adaptation and launch. Visible negotiations.
Biden and most Senate Democrats are asking consumers who buy electric cars to take billions of dollars in tax credits. This is seen as the key to combating climate change.
The transition from pollution to petrol cars and trucks is even more important to the government’s climate goals after a recent Supreme Court decision that reduced the government’s authority to reduce pollution from power plants.
Mr. Manchin, a Democrat in West Virginia More campaign contributions Assassinated proposed tax credits from oil, gas and coal companies more than any other senator. This is unnecessary and wasteful and is worth up to $ 12,500 per unit. He is also skeptical about rising government spending during inflation.
Mr. Manchin’s opposition to the tax deduction for electric vehicles reflects the opposition of the oil industry, which will be threatened by a major shift from petrol cars and trucks. The American Petroleum Institute, the lobbying arm of the fossil fuel industry, has warned against “rushing to EV,” and government actions to support electric vehicles limit Americans’ transportation options. , Said it could remain “high and dry”.
“Conclusion: Efforts to help adopt EVs can be costly for taxpayers and consumers,” said Group President Mike Somers. Said last year..
But the rapid transition to electric vehicles is exactly what scientists need to quickly and sharply reduce emissions that endanger the planet. Transportation pollution is a major cause of greenhouse gas emissions in the United States.
Mr. Manchin has succeeded in reducing the already proposed tax credit to about one-third, a measure opposed by Toyota Motor Corporation, which operates a non-union factory in Mr. Manchin’s hometown. Removed the $ 4,500 incentive for consumers buying American cars.
Toyota said in a statement that while consumers support tax credits to accelerate the transition to electric vehicles, it is wrong to give premiums to union-made vehicles.
An important year for electric vehicles
The popularity of battery-powered vehicles is skyrocketing around the world as the entire automotive market stagnates.
“”What does this say to American car workers who have decided not to join the union? “The company said. “They say their job is worth $ 4,500 less because they made that choice. What does this say to American consumers?”
The money helped Mr. Byden’s election, but with support from American automakers and union voters in the Midwest and Northeast industrial areas, who are wary of moving to electric vehicles that require fewer workers to assemble. Partially designed to get.
Democrats are now looking at ways to appease Mr Manchin by testing measures to limit tax credits to consumers below a certain income level, according to people close to the talks. And he suggested removing the tax credit altogether.
“Currently, we have a waiting list for EVs with a fuel price of $ 4, but we hope to invest $ 5,000, $ 7,000, or $ 12,000 in credits to buy an electric car,” Manchin said this year. I said at the hearing of the Senate.
“It doesn’t make any sense to me,” Manchin said, adding that “it’s absolutely ridiculous.”
West Virginia drivers buy less electric cars than most other states. As of 2020 Only 600 EVs are registered in the state, Represents less than 1 percent of all vehicle registrations. According to federal data, only drivers in Wyoming and South Dakota are driving fewer electric vehicles.
“If you combine that with the oil and gas focus, it’s unclear if Manchin has a swell of public support for EVs in the state that may be forced to accept EV subsidies for new car purchases. “Hmm,” said Barry Rabe, a professor of public policy, at the University of Michigan.
The average buyer of an electric vehicle earns over $ 100,000 a year, has a college education, and owns at least one other vehicle. 2021 survey commissioned by the Fuel Research InstituteEnergy Research Institute.
“These are neither West Virginia citizens nor the people he represents. He raises real questions as to why taxpayers need to subsidize their ability to buy very expensive new market EVs. “. Josh Freed, Senior Vice President of Climate and Energy at Third Way, a modest think tank.
Fried explained that tax credits for buying electric vehicles are important to revitalize the market and encourage automakers to produce large numbers of vehicles. According to a 2021 survey by Cox Automotive, 51% of shoppers say that electric vehicles are too expensive to be seriously considered.
By 2030, Biden hopes that 50% of new cars sold by 2030 will be completely electric vehicles. This is an increase from the current 5%. To achieve his goal, he wants to combine tax credits with the stricter new fuel economy regulations currently being developed by the Environmental Protection Agency.
However, the same parties to the proceedings, who won the Supreme Court ruling in June and restricted the EPA’s authority to regulate greenhouse gas pollution from chimneys, are expected to challenge the rules under development regarding tailpipe emissions. increase. Drew Kojak, managing director of the research institute International Clean Transport Council, said tax credits are even more important for this.
As a swing vote in the evenly divided Senate, Democrats need Mr Manchin’s support to push the budget without Republican support. It gave him an extraordinary upset about the legislative entity.
Democratic majority leader Chuck Schumer, a New York senator, is making last effort to pass a reduced domestic policy bill by August. Mr. Schumaer was tested positive for Covid, but he spoke to Mr. Manchin on a video call on Monday, his aide said.
Manchin hasn’t yet approved top-line figures for the entire bill, but supporters say it’s far more than $ 555 billion in climate and clean energy supplies approved by the House of Representatives when the bill was passed in November. I expect it to be low. Some people familiar with the negotiations said lawmakers were discussing a $ 300 billion cap for climate and energy measures.
On Monday, Mr Manchin dismissed the idea that lawmakers were close to trading everywhere.
“There is a lot of discussion and consideration before and after,” he added, adding that the climate legislation needed to deal with inflation should increase the supply of fossil fuels.
Manchin said he was most concerned about the price of the pump. “How do you raise the price of gasoline?” He said. “It’s about energy, but you can’t do that unless you produce more. If anyone doesn’t want to produce more fossils, you’re in trouble. That’s just reality. You’re it. Must be done. “
Manchin’s efforts to break tax incentives for electric vehicles began last fall as Senate Democrats first aimed to reach an agreement on a much broader $ 2 trillion in climate change and social policy bills. I did.
In addition to abolishing the union’s tax credits, Manchin said he would remove the core $ 7,500 deduction for the purchase of all types of electric vehicles, according to some people involved in the negotiations. Proposed. It only leaves a $ 500 tax credit on electric cars with American batteries.
It will also put Manchin in conflict with Toyota and the big three car makers in the United States. Toyota opposes tax credits for union-made electric vehicles, but last month, in collaboration with General Motors, Ford and Sterantis, asked parliamentary leaders to increase the number of electric vehicles sold that were eligible for tax credits. .. The current proposal limits tax credits to the first 200,000 units sold by individual automakers.
“By removing the cap, consumers will be adopting future electrification options, providing the coveted certainty for customers and domestic workers,” wrote a car executive.
One of the possible bargaining points in the negotiations between Senate Democrats and Mr Manchin may be to build a new hydrogen R & D hub in West Virginia. The bipartisan infrastructure law includes $ 8 billion to create a “hydrogen hub” for these four regions.
Hydrogen is converted to electricity to power the vehicle and release only water vapor. However, much of the hydrogen produced today is extracted from the greenhouse gases methane and the natural gas that is the process of producing carbon dioxide.
Manchin and other leaders in West Virginia want the Biden administration to choose their state as one of the hubs for producing hydrogen using natural gas.
“We don’t spend money on hydrogen or do research like EVs,” Manchin said this year.
Some are familiar with Manchin’s idea of asking him to speak anonymously because the negotiations aren’t open to the public, in exchange for his understanding of the Biden administration that West Virginia will be chosen as hydrogen. Hub said it could support the electric vehicle tax deduction.
Manchin’s spokeswoman, Sam Runyon, rejected the proposal. “There is no truth to this,” she said.
A Hydrogen Industry Union Backed by oil companies such as Chevron and BP, we are driving federal support for hydrogen infrastructure. Toyota is also betting on the development of hydrogen fuel cell vehicles in the future. This is a more expensive alternative that lags behind battery-powered vehicles.
John Kilwein, Dean of Political Science at West Virginia University, said Manchin’s opposition to the electric vehicle tax deduction and his efforts to make the entire package work well at home. ..
“West Virginia is getting red, I hate DC, I hate the country’s Dems, I hate the federal government,” Kilwein said in an email. “Manchin comes to claim that it’s the common sense of West Virginia that puts them under control. Emily Cochran contributed to the report from Washington.