An influential Democratic senator, who has paid dearly for his support of the US president’s big climate plan, on Thursday called for the introduction of EV subsidies to be “paused” because the Treasury Department has yet to finalize the terms of the allocation.
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According to the Inflation Reduction Act (IRA), which is the official name of the climate plan, subsidies for the purchase of an electric vehicle must begin on January 1 and amount to up to $7,500. But the US Treasury Department indicates on its website that the final terms will be set next March.
In order to benefit from the subsidies, the vehicles and their batteries only have to be “assembled in North America” for the time being. This includes, therefore, those made in Canada and Mexico, a long-standing demand from countries neighboring the United States.
But that’s not enough for Senator Joe Manchin, who is asking for a pause in implementing these subsidies, “time to release terms that respect the IRA’s goal.”
“The announced rules reflect the will of companies and do not respect the goal of the law,” the Democratic senator said in a press release. “They only weaken our ability to become a more energy-independent country.”
In particular, Joe Manchin wishes the attribution terms would not result in increasing the United States’ dependence “on China and Russia for the raw materials and manufacturing necessary for our nation’s energy,” both countries being among the leaders.
Vehicles that don’t meet the originally intended targets can actually benefit from the current regulations as long as the new terms are not made public, he believes.
The original plan stipulated that the vehicles to be subsidized would be “Made in the USA” in order to benefit the American automobile industry.
But such a possibility has prompted an outcry both in North America, Canada and Mexico, who believe these rules go against the free trade agreement between the three countries, and in Europe, which fears a weakening of its industry at a time when it is weak already suffering from rising energy costs due to the war in Ukraine.
The issue was also raised during French President Emmanuel Macron’s state visit in early December, when the French delegation expressed optimism about a possible extension of subsidies for European-made vehicles.