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Washington bureaucracy could rescue Democrats from their EV tax credit problem

7 28 2
previous day

Hand-wringing that Democrats’ signature electric vehicle tax credit's battery and minerals sourcing requirements are too tough to use ignores a political reality: Washington knows how to get around its own rules.

To get a deal on the reconciliation bill that contains the credits, lawmakers had to agree that electric vehicles should be made with North American parts and minerals, even though it would rely on a U.S. supply chain that is in its infancy. Those rules allow lawmakers — including Sen. Joe Manchin (D-W.Va.), who insisted on the restrictions — to ride a tough-on-China message into the midterms. Democrats have a problem, though — they're so tough that no electric vehicle on the market would qualify.

But all it may take to unlock the tax credits Democrats hope will spur Americans to get rid of their gas guzzlers are some creative definitions — a bureaucratic specialty.

There’s already a playbook for getting around geographic sourcing requirements: A decades-long program called “Buy America,” intended to ensure road and transit projects are made from American-made materials. The requirements, especially for things like steel, which is produced more cheaply overseas, have been difficult to meet since its inception — and that’s exactly why they’re sometimes waived.

For instance, though Congress enacted stringent new Buy America rules in last year’s massive infrastructure law, they were immediately waived temporarily to give states and cities more time to adapt.

And the new sourcing requirements for electric vehicles that at the moment seem out of reach could go down the Buy America path, too. In fact, automakers and electric vehicle........

© Politico

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