Sen. Joe Manchin, Democrat of West Virginia, has now reportedly issued a warning to the Biden administration this week, threatening to file a lawsuit if an anticipated guidance from the Treasury Department seeks to circumvent restrictions that he added to a law regarding electric vehicle tax credits.
Manchin’s restrictions were added to the law after it was passed.
Manchin reportedly told reporters that if things went ‘off the rails’ that “I’ll do whatever I can and that means going to court.”
A limit that had been placed on the number of electric vehicles that may be eligible for consumer tax credits was removed by the Democrats’ climate, tax, and healthcare plan.
Nevertheless, it also added additional requirements about the kinds of automobiles that are qualified for the credit.
It was specified that a new vehicle will be eligible for half of the $7,500 credit if a portion of its battery components are manufactured or assembled in North America, and the other half of the credit will be available if a portion of the minerals in the vehicle’s battery are refined or processed in countries with which the United States has a free trade agreement.
The credit is intended to encourage the production of electric vehicles in countries with which the United States has free trade agreements.
It was anticipated that the limits would place a significant burden on automobile manufacturers, particularly in the early years of the mandate.
Last year, a source from the automotive sector mentioned that they didn’t believe there were any electric vehicles on the market that matched the standard for the minerals included in the battery.
These constraints were supposed to enter into force at the beginning of this year alongside the extension of the credit, but the Biden administration said in December that it would defer the implementation of these provisions until it produced a guidance document in March.