WASHINGTON – Senator Joe Manchin III’s opposition to government incentives for electric vehicles is a key point in President Biden’s tax and spending package negotiations – negotiations that seem to seems to be coming to an end this week after months of consistent beginnings.
Mr. Biden and most of the Democrats in the Senate want billions of dollars in tax credits for consumers who buy electric vehicles, which they see as key to fighting climate change.
The transition from polluting gas-powered cars and trucks is even more important to the administration’s climate goals following a recent Supreme Court decision that limited the government’s power to cutting pollution from power plants.
Mr. Manchin, a West Virginia Democrat who was contribute more to the campaign from oil, gas and coal companies than any other senator, has hit proposed tax credits, worth up to $12,500 per vehicle, as unnecessary and wasteful fee. He also expressed skepticism about increasing government spending at a time of inflation.
Mr Manchin’s opposition to electric vehicle tax credits reflects the oil industry, which will be threatened by a wholesale shift away from gas-powered cars and trucks. The American Petroleum Institute, the lobbying arm of the fossil fuel industry, has warned against a “rushed transition to EVs”, saying the government’s action to support electric vehicles could limit Americans’ transportation choices and make them “high and dry.”
“The bottom line: efforts to subsidize electric vehicle adoption can be costly for taxpayers and consumers,” said Mike Sommers, the group’s president, said last year.
However, a rapid transition to electric vehicles is what scientists say is needed to rapidly and drastically cut emissions that are dangerously warming the planet. Pollution from transportation is the leading source of greenhouse gas emissions in the United States.
Manchin succeeded in shrinking about a third of the proposed tax credits, removing a $4,500 incentive for consumers to buy union-made cars in the United States, a measure taken by Toyota Motor, the company. company that operates an astronaut factory in Manchin’s hometown, protested.
In a statement, Toyota said that while it offers tax credits to consumers to accelerate the transition to electric cars, the premium awarding of union-made vehicles will mishandled.
An important year for electric vehicles
As the automotive market as a whole stagnates, the popularity of battery-powered cars is skyrocketing worldwide.
“What does this say to the American auto worker who decided not to join the union? ” said the company. “It says their work is worth less than $4,500 because they made that choice. What does this say to the American consumer?”
That money was designed in part to win support from American automakers and union voters in industrial areas of the Midwest and Northeast, who helped elect Mr. who are wary of switching to electric vehicles, which require fewer workers to assemble.
According to people close to the negotiations, Democrats are considering a means of testing a means to limit tax credits to consumers below a certain income level as a way to appease them. Mr Manchin. And he has suggested eliminating the tax credits altogether.
“There is a waiting list for electric vehicles with $4 fuel, but they still want us to put out $5,000 or $7,000 or a $12,000 credit to buy an electric vehicle,” he said. Manchin said at a Senate hearing this year.
“It doesn’t make any sense to me whatsoever,” Manchin said, adding, “It’s completely ridiculous.”
Drivers in West Virginia buy fewer electric vehicles than most other states. As of 2020, there are only 600 EVs are registered in the state, which accounts for less than 1% of total vehicle registrations. According to federal data, only drivers in Wyoming and South Dakota drive fewer electric vehicles.
“Combine that with a focus on oil and gas, and I’m not sure there’s a public base in favor of electric vehicles in that state that would force Manchin to get electric vehicle subsidies for new car purchases,” said Barry Rabe, a professor of public policy at the University of Michigan.
Follow a 2021 survey commissioned by the Fuel Institutean energy research organization.
“These are non-West Virginians, not the people he represents, and he raised real questions about why, in his mind, taxpayers should subsidizes the ability to buy very expensive, new-to-market electric cars,” says Josh Freed, senior vice president of climate and energy at Third Way, a moderate thinker.
Mr. Freed described the tax credits for buying electric vehicles as crucial to boosting the market and incentivizing automakers to produce large quantities of cars, which would drive down the price of each. A 2021 study by Cox Automotive found that 51% of shoppers said electric vehicles were too expensive to take seriously.
Mr. Biden wants 50% of new cars sold by 2030 to be all-electric – up from just 5% today. To that end, he wants to combine tax credits with automobile fuel economy regulations currently being developed by the Environmental Protection Agency.
But it was the litigants who won a Decision of the Supreme Court In June, limiting the EPA’s authority to regulate greenhouse gas pollution from smoke is expected to challenge the rules being developed for emissions. That makes tax credits all the more important, says Drew Kodjak, executive director of the International Council on Clean Transport, a research organization.
As the Senate rotation vote splits evenly, Democrats need Manchin’s backing to pass the budget bill without any Republican support. That gave him an unusual jolt about the nature of the law.
Senator Chuck Schumer of New York, the Democratic majority leader, is making a final push to pass the miniature domestic policy bill by August. Mr. Schumer has tested positive for coronavirus. Covid but spoke to Mr Manchin on Monday via a video call, an aide said.
Mr Manchin has yet to sign off on a top figure for the overall bill, but supporters are expecting much less than the $555 billion climate and clean energy provisions the House passed when passed a version of the bill in November. Some people familiar with the negotiations said lawmakers were discussing a $300 billion cap on climate and energy measures.
On Monday, Mr Manchin rejected the notion that lawmakers were close to reaching a deal.
“There’s a lot of discussion and deliberation going on,” he said, adding that any climate legislation is needed to tackle inflation and should increase fossil fuel supplies.
Mr. Manchin said he is most interested in the price of the pump. “How do we come up with gas prices?” he say. “From energy, but you can’t do it unless you produce more. If there are people who don’t want to produce more fossils, then you’ve got a problem. That’s just reality. You must do that. “
Manchin’s efforts to ease electric vehicle tax incentives began last fall, when Senate Democrats first sought to strike an agreement on the social policy bill. and much broader $2 trillion climate change.
In addition to eliminating the tax credit taken by the union, Manchin has proposed removing a $7,500 political credit for the purchase of any electric vehicle, according to several people involved in the negotiations. That would leave only a $500 tax credit for electric vehicles with US-made batteries.
That would also pit Mr Manchin against Toyota and the Big Three US automakers. While Toyota opposes tax credits for union-made electric vehicles, last month the company partnered with General Motors, Ford and Stellantis in a letter to congressional leaders asking them to open it. Expand the number of electric vehicle sales that qualify for the tax credit. The current proposal would limit the tax credit to the first 200,000 cars sold by each individual automaker.
“Removing the cap will encourage future consumer adoption of electrification options and provide much-needed certainty to our customers and domestic workforce,” the executives said. car operator writes.
One possible bargaining chip in negotiations between Senate Democrats and Manchin could be the construction of a new hydrogen research and development center in West Virginia. The bipartisan infrastructure law includes $8 billion to create four such regional “hydrogen hubs.”
Hydrogen can be converted into electricity to power a vehicle, emitting only steam. But much of the hydrogen produced today is extracted from natural gas, a process that produces methane and carbon dioxide, both of which are greenhouse gases.
Manchin and other leaders from West Virginia want the Biden administration to choose their state as the site for one of the hubs, where hydrogen will be produced using natural gas.
“We didn’t spend money or put research on hydrogen the way we have in electric vehicles,” Mr Manchin said this year.
A person familiar with Mr Manchin’s thinking, who asked to remain anonymous because the negotiations are not public, said Mr Manchin could support some electric vehicle tax credits in exchange for understanding with Mr. Biden administration that West Virginia would be selected as a hydrogen production site. center.
Sam Runyon, a spokesman for Mr Manchin, dismissed that suggestion. “This is completely untrue,” she said.
One hydrogen industry alliance backed by oil companies including Chevron and BP are pushing for federal support for hydrogen infrastructure. Toyota has also set its sights on developing hydrogen fuel cell vehicles – a more expensive alternative to electric battery cars.
John Kilwein, chair of the political science department at West Virginia University, said Manchin’s opposition to electric vehicle tax credits and his efforts to make the whole package smaller, play a good role on the pitch. home.
“West Virginia is getting redder, doesn’t like DC, doesn’t like the National Dems and doesn’t like the federal government,” Kilwein said in an email. “Manchin argues that he is a West Virginian of common sense who is always in control of them. Emily Cochrane contributed reporting from Washington.
