Mr. Biden and most Senate Democrats want billions of dollars in tax credits for consumers who buy electric vehicles, which they see as key to fighting climate change. The shift away from polluting gas-powered cars and trucks is even more critical to the administration’s climate goals after a recent Supreme Court ruling limited the government’s power to reduce pollution from power plants. Mr. Manchin, a West Virginia Democrat who has received more contributions from oil, gas and coal companies than any other senator, has criticized the proposed tax credits, which would be worth up to $12,500 per vehicle, as unnecessary and wasteful. He has also expressed skepticism about increasing government spending in a period of inflation. Mr. Manchin’s opposition to tax credits for electric vehicles mirrors that of the oil industry, which would be threatened by a wholesale shift away from gas-powered cars and trucks. The American Petroleum Institute, the lobbying arm of the fossil fuel industry, has warned of a “rushed transition to electric vehicles,” saying government action to support electric vehicles could limit transportation options for Americans and leave them “high and dry”. “Bottom line: efforts to subsidize EV adoption can be costly to taxpayers and consumers,” Mike Sommers, the group’s president, said last year. But a rapid transition to electric vehicles is exactly what scientists say is needed to quickly and sharply reduce emissions that are dangerously warming the planet. Transportation pollution is the leading source of greenhouse gas emissions in the United States. Mr. Manchin has already managed to shrink the proposed tax credits by about a third, eliminating a $4,500 incentive for consumers who buy union-built American cars, a measure opposed by Toyota Motor, which operates a non-union plant. organizations in Mr. Manchin’s home state. In a statement, Toyota said that while it supported tax breaks for consumers to speed up the switch to electric cars, giving a premium to vehicles made in the Union would be a mistake.
A critical year for electric vehicles
As the overall car market remains stagnant, the popularity of battery-powered cars is soaring worldwide.
“What does this say to the American auto worker who decided not to join a union?” the company said. “It says their job is worth $4,500 less because they made that choice. What does that say to the American consumer?’ That money was designed in part to win the support of American automakers and union voters in industrial areas of the Midwest and Northeast who helped elect Mr. Biden but who are wary of the shift to electric vehicles, which require fewer workers to run. fitting. Now Democrats are considering a means test to cap tax credits for consumers below a certain income level as a way to appease Mr. Manchin, according to people close to the talks. And he suggested removing tax credits altogether. “There’s a waiting list for EVs right now with a fuel price of $4, but they still want us to give $5,000 or $7,000 or a $12,000 credit to buy an electric vehicle,” Mr. Manchin told a Senate hearing this year. “It makes no sense to me,” Mr. Manchin said, adding, “It’s absolutely ridiculous.” West Virginia drivers buy fewer electric vehicles than almost any other state. As of 2020, there were only 600 electrics registered in the state, representing less than 1 percent of all vehicle registrations. Only motorists in Wyoming and South Dakota are driving fewer electric vehicles, according to federal data. “Combine that with the focus on oil and gas, and I’m not sure there’s a public rationale for supporting EVs in this state that could compel Manchin to embrace EV subsidies for new vehicle purchases,” Barry said. Rabe, professor of public policy. at the University of Michigan. The typical buyer of an electric vehicle earns more than $100,000 a year, has a college education and owns at least one other vehicle, according to a 2021 survey commissioned by the Fuels Institute, an energy research organization. “These are people who are not residents of West Virginia, they are not people he represents, and he has raised real questions about why, in his opinion, taxpayers should subsidize their ability to buy very expensive, new-market EVs,” he said. Josh Freed, the senior vice president for climate and energy at Third Way, a moderate think tank. Mr Freed described tax credits for the purchase of electric vehicles as critical to stimulating the market and encouraging carmakers to produce a large volume of cars, which would lower the price per unit. A 2021 study by Cox Automotive found that 51 percent of buyers said electric vehicles were too expensive to seriously consider. Mr Biden wants 50% of new vehicles sold to be all-electric by 2030 — up from just 5% today. To achieve that goal, he wants to combine the tax credits with tough new auto fuel economy regulations now being developed by the Environmental Protection Agency. But the same litigants who won a Supreme Court ruling in June that limited the EPA’s power to regulate greenhouse gas pollution from smog are expected to challenge the emissions rules being drafted. That makes tax credits even more important, said Drew Kodjak, executive director of the International Council on Clean Transportation, a research organization. As the vote swings in an evenly divided Senate, Democrats need Mr. Manchin’s support to advance a budget bill without any Republican support. This gave him unusual influence over the substance of legislation. Sen. Chuck Schumer of New York, the Democratic majority leader, is making a last-ditch effort to pass a watered-down domestic policy bill before August. Mr Schumer tested positive for Covid but spoke to Mr Manchin on Monday via video call, an aide said. Mr. Manchin has yet to sign a headline amount for the overall bill, but supporters expect far less than the $555 billion in climate and clean energy provisions that the House approved when it voted on its version of the bill in November. Several people familiar with the negotiations said lawmakers are discussing a $300 billion cap on climate and energy measures. On Monday, Mr. Manchin dismissed the idea that lawmakers were anywhere close to a deal. “There’s a lot of discussion and reflection that goes back and forth,” he said, adding that any climate legislation needs to address inflation and should increase the supply of fossil fuels. Mr. Manchin said he was more concerned about the price at the pump. “How do we bring down the price of gasoline?” he said. “On the energy issue, but you can’t do that unless you produce more. If there are people who don’t want to produce more fossils, then you have a problem. That’s just the reality. You have to do it.” Mr. Manchin’s efforts to reduce tax incentives for electric vehicles began last fall as Senate Democrats first tried to reach agreement on a much broader $2 trillion climate change and social policy bill. . In addition to eliminating the union tax credit, Mr. Manchin has proposed eliminating the basic $7,500 credit for the purchase of any kind of electric vehicle, according to several people involved in the negotiations. That would leave only a $500 tax credit for battery electric vehicles made in America. That would also put Mr Manchin at odds with Toyota and the big three US carmakers. While Toyota opposes union electric vehicle tax credits, last month the company joined General Motors, Ford and Stellantis in a letter to congressional leaders asking them to expand the number of electric vehicle sales that would be eligible to receive the tax credits. The current proposal would limit the tax credits to the first 200,000 vehicles sold by each individual automaker. “Eliminating the cap will incentivize consumers to adopt future electrified options and provide much-needed certainty to our customers and our domestic workforce,” the automaker’s executives wrote. A potential bargaining chip in negotiations between Senate Democrats and Mr. Manchin could be the construction of a new hydrogen research and development hub in West Virginia. The bipartisan infrastructure bill includes $8 billion to create four such regional “hydrogen hubs.” Hydrogen can be converted into electricity to power a vehicle, emitting only water vapor. However, much of the hydrogen produced today is extracted from natural gas, a process that produces methane and carbon dioxide, both greenhouse gases. Mr. Manchin and other leaders from West Virginia want the Biden administration to select their state as the site for one of the hubs, where hydrogen will be produced using natural gas. “We haven’t put the money or the research into hydrogen like we do into EVs,” Mr. Manchin said this year. A person familiar with Mr. Manchin’s thinking, who asked to speak anonymously because the negotiations were not public, said Mr. Manchin could support some tax breaks for electric vehicles in exchange for an understanding with the Biden administration that West Virginia will be selected as a hydrogen hub. Sam Runyon, a spokeswoman for Mr. Manchin, rejected that suggestion. “There is absolutely no truth to that,” he said. A hydrogen industry coalition backed by oil companies including Chevron and BP is pushing for federal support for hydrogen infrastructure. Toyota has also bet its future on developing hydrogen fuel cell vehicles – a more expensive alternative that has lagged behind battery electric cars. John Kilwein, chair of the political science department at…
