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Senator Joe Manchin called federal tax credits for electric vehicles “ludicrous” in a Senate hearing on Thursday. The West Virginia politician, who continues to make millions from the coal industry, has been a regular critic of subsidies for EVs, which have played a key role in the Democratic Party’s plan to decarbonize the transport sector.
Since 2009, the US has used federal tax credits as a way to offset the higher price of EVs thanks to their battery packs.
Currently, the credit is for any plug-in vehicle (both battery EVs and plug-in hybrid EVs) with at least 5 kWh of battery capacity and ranges from $2,917 to $7,500, depending on the exact kWh total. But it’s a credit, not a rebate, so to receive the full $7,500, an EV buyer has to have at least $7,500 in tax liability that year. The tax credit also sunsets once a car manufacturer has sold 200,000 plug-in vehicles, although, so far, only Tesla and General Motors have crossed that threshold.
Perhaps recognizing the rapidly diminishing opportunity to ameliorate the worst effects of climate change, House Democrats put together an expanded incentive package, which would increase the tax credit to as much as $12,500 based on a number of factors, including whether the EV was made by a unionized workforce.
But the Democratic Party has a razor-thin majority in the Senate, and passing more tax credits would be impossible without Manchin’s vote.
Despite his claims to want to address climate change, this is not the first time Manchin has made clear his opposition to policies that would actually help. In November 2021, he called the EV incentives “wrong” and “not American.” And in March 2022, he said he was “very reluctant to go down the path of electric vehicles” and lambasted the idea of the government spending money on infrastructure.
Manchin was questioning Transportation Secretary Pete Buttigieg, urging his department to spend more money building more highways in West Virginia, when talk turned to EV tax credits.
“There’s a waiting list for EVs right now with the fuel price at $4. But they still want us to throw [a] $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever. When we can’t produce enough product for the people that want it and we’re still going to pay them to take it—it’s absolutely ludicrous in my mind,” Manchin said.
