Electric vehicle tax-credit rules pit Joe Manchin against Hyundai

Bloomberg

Senator Joe Manchin is pressing Treasury Secretary Janet Yellen to stand firm on North American-based manufacturing requirements for lucrative electric-vehicle tax credits under the Inflation Reduction Act, setting up a battle between the West Virginia Democrat and Korea’s Hyundai Motor Co.
At stake is whether Treasury would hand out the full $7,500 per vehicle in tax credits to more cars under a commercial-vehicle loophole. Manchin’s requirements say that retail EVs must be assembled in North America and with batteries made with minerals from friendly trading partners to get full credit. Hyundai and the Korean government have pushed for a lenient interpretation of the rules and more time to be compliant so their imported EVs can qualify for credits.
“Unfortunately, I have heard that some automakers and foreign governments are asking your agency for a broad interpretation of 45W that would allow rental cars, leased vehicles, and rideshare vehicles” to be eligible for the $7,500 commercial vehicle tax credit, Manchin wrote in letter to Yellen made public.
“If these vehicles are deemed eligible, I can guarantee that companies will focus their attention away from trying to invest in North America.”
Manchin, who provided Democrats a pivotal vote on the legislation, fought to include new limits on who could claim the tax credits, which he previously dismissed as “ludicrous.” He argued that without tough rules mandating manufacturing in the US and rules on content, the IRA would subsidise production in China and by other US adversaries.
Automakers like Ford Motor Co, General Motors Co and Volkswagen AG already have battery and EV plants running or under construction in North America, while Hyundai recently broke ground on a $5.5 billion facility in southern Georgia.
Hyundai and the Korean
government have put up an aggressive lobbying campaign to persuade the Biden administration to tweak the bill.