By David Shepardson
WASHINGTON (Reuters) -The No. 2 officials at the U.S. Treasury and Energy departments will testify next Thursday before the Senate Energy Committee on electric vehicle tax incentives, the committee said.
Deputy Treasury Secretary Wally Adeyemo and Deputy Energy Secretary David Turk will appear at the hearing to examine EV incentives including the federal government’s role in fostering reliable electric vehicle supply chains, the committee said on Friday.
Senator Joe Manchin, a Democrat who chairs the committee, has been harshly critical of Treasury’s guidance governing EV tax credits on a number of fronts, saying last month it would make it easier for Chinese companies to take advantage.
The August 2022 Inflation Reduction Act, which Manchin helped write, dramatically shrunk the number of electric vehicles qualifying for tax credits. The law is designed to wean the U.S. electric vehicle battery supply chain away from China.
In December, Treasury issued guidance limiting Chinese content in batteries eligible for EV tax credits that start this week. The guidance shrunk the number of eligible EVs to 19 from 43.
In a win for automakers, the Treasury Department temporarily exempted some trace critical minerals from new strict rules barring materials from China and other countries deemed a Foreign Entity of Concern (FEOC).
On Friday, a Ford Motor spokesperson said the automaker had not seen anything in the IRA or the guidance “that would disqualify our licensing agreement” with Chinese battery maker CATL.
Ford said in November it was restarting construction of a battery plant in Michigan using CATL technology but scaling back the investment, capacity and jobs planned.
The FEOC rules that take effect in 2024 are for completed batteries. For critical minerals used to produce those batteries, the rules take effect in 2025.
Energy Secretary Jennifer Granholm on Friday heralded the sale of 1 million EVs in the U.S. last year, up 50% from the previous year. There has also been a big jump in the number of EV charging stations.
“These developments are part of an inevitable shift toward a thriving electric transportation sector,” she said.
Automakers are pressing the administration to soften emissions requirements expected to drastically boost EV sales.
(Reporting by David Shepardson in WashingtonEditing by Matthew Lewis)