“Build it or else.”
That was the gist of U.S. Senator Joe Manchin’s discussions with the automotive industry regarding EV tax credits. Manchin, a Democrat from West Virginia, had grown increasingly concerned about China’s dominance of the lithium-ion battery market, and he told car companies that they needed to move vast swaths of the global battery supply chain out of China.
If they didn’t, they’d have to give up the lucrative tax credits in the Inflation Reduction Act that made their EVs more affordable for U.S. consumers.
The resulting law still grants consumers access to $7,500 worth of federal tax relief but drastically changes what it takes for vehicles to qualify. To be eligible for the full credit, EV batteries have to be manufactured in and made of materials mined and refined in the U.S. or free trade-agreement countries like Canada, Mexico, Australia and Chile.
“You want to get your $7,500, then build this industry,” Manchin said he told automakers, according to a Bloomberg report. “They thought I would cave on that. I said I’ll cave — I’m going to take everything away from you,” he added.
“They said: ‘We’ll take it.’ And that’s how we got to where we got to.”
