US Senator Manchin encouraging industry to sue Treasury over EV tax credits

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) -U.S. Senator Joe Manchin said on Tuesday he was urging U.S. companies to sue the Treasury Department over the local content rules it set for companies to receive clean energy tax credits under the Inflation Reduction Act (IRA).

Manchin told U.S. Treasury Secretary Janet Yellen during a hearing of the Senate Appropriations Committee that U.S. manufacturers were being damaged by the content rules, which he said Treasury had halved from the original language in the law.

“I’m encouraging every manufacturer to sue you, and I will do the amicus brief on (their) behalf …. and you’ll lose every suit,” he said, holding up posters comparing the content requirements included in the legislation with those set in final rules by Treasury, which is implementing the IRA.

Manchin, often a thorn in the side of the Biden administration, last week left the Democratic Party and registered as an independent, blasting what he called “partisan extremism” in both major parties.

The 76-year-old West Virginia lawmaker has been particularly incensed by Treasury’s implementation of the IRA, arguing that its final local content rules have watered down the original intent of the bill and are hurting U.S. companies.

He said last month that Treasury’s final rule allowing automakers another year to use Chinese graphite and other critical minerals in battery production before switching to domestic sources would “break the law.”

Manchin and Arizona Senator Kyrsten Sinema were key votes on multiple pieces of legislation early in Democratic President Joe Biden’s administration, including a massive infrastructure bill.

Manchin told the hearing the IRA was written to ensure that the United States was not reliant on supply chains from China, but Treasury’s implementation meant China would stay “in the market for the entire extent of the IRA.”

Yellen said the Biden administration shared Manchin’s concerns about reliance on supplies from China, and offered to engage in technical discussions with Manchin about the concerns he raised during the hearing.

(Reporting by Andrea Shalal and David Lawder; Editing by Jamie Freed)