The House passed legislation Thursday that would bar electric vehicles assembled with Chinese-made components and minerals from receiving American taxpayer subsidies, dealing a blow to the Biden-Harris administration’s aggressive EV push.
The so-called End Chinese Dominance of Electric Vehicles in America Act, introduced by Rep. Carol Miller (R., W.Va.) in April, passed in a bipartisan 217-192 vote Thursday morning. Seven Democrats voted in favor of it alongside all 210 Republicans. Twenty-two lawmakers were absent from the vote.
The vote represents the latest effort from lawmakers, both Republican and Democrat, to ensure manufacturing, particularly green energy manufacturing, is brought onshore. It is also a key component of a broader strategy in Congress to curb China’s influence in the United States economy and energy sector—China continues to dominate green supply chains, especially those tied to electric vehicles and solar panels.
“The End Chinese Dominance of Electric Vehicles in America Act takes steps to ensure that Chinese companies can no longer benefit from electric vehicles tax credits meant for U.S. manufacturers,” Miller said following the vote. “I’m thrilled this bill has passed in the House of Representatives to stop Chinese influence in our supply chain.”
At issue are regulations proposed by the Biden-Harris administration in December that open the door for Chinese companies and firms linked to the Chinese Communist Party to take advantage of the generous electric vehicle tax credit earmarked in the 2022 Inflation Reduction Act. The tax credit allows consumers to receive as much as $7,500 when they purchase an electric vehicle and is designed to benefit cars manufactured in the United States by barring vehicles using parts from any “foreign entity of concern” from qualifying.
The December guidance—issued by the White House Office of Clean Energy Innovation and Implementation and Treasury Department—defines the term “foreign entity of concern” as an entity “incorporated in, headquartered in, and operating within” one of four covered nations: China, Russia, North Korea, and Iran. But the guidance includes loopholes, such as a broad, multi-year exemption for “non-traceable battery materials.” Automakers and manufacturers are, in other words, exempt from the determination of whether a battery cell is compliant with the rules if certain battery materials originate from multiple sources or are too hard to trace back to their original source.
Those workarounds, according to Sen. Joe Manchin (I., W.Va.) and other critics, deviate from the intent of the law and allow China to continue to penetrate the American market with the help of taxpayer funding. “This administration is, yet again, trying to find workarounds and delays that leave the door wide open for China to benefit off the backs of American taxpayers,” Manchin said.
Miller’s bill would address the issue by forcing the Treasury Department to adhere to a stricter definition of what constitutes a foreign entity of concern. Under that definition, entities owned by “any person that is a citizen, national, or resident” of a foreign entity of concern would be looped in, meaning battery companies owned by Chinese billionaires with more obscure ties to the Chinese government would still be barred from benefiting from the subsidies.
It would also ensure a higher level of scrutiny of hard-to-trace upstream materials used in electric vehicle batteries eligible for the tax credit.
The West Virginia congresswoman said Thursday that the administration’s action “is devastating for American manufacturers and our national security.”
“Pushed by their radical environmentalist base, the Biden-Harris administration is now using American taxpayer dollars to further China’s dominance of the EV market,” Rep. Jason Smith (R., Mo.), the chairman of the Ways and Means Committee, said during remarks in support of the bill earlier in the day.
“When Vice President Harris cast the deciding tie-breaking vote for the Inflation Expansion Act, she and every Democrat in Congress, handed a massive gift to the Chinese government and its cronies,” he continued. “It’s time we put the brakes on giving taxpayer money to Chinese billionaires and the Chinese Communist Party.”
According to the International Energy Agency, China dominates global electric vehicle battery supply chains, boasting a 75 percent market share. The nation further owns 90 percent of the global production capacity for cathodes and 97 percent for anodes, two key components of such batteries, additional data showed.
In addition, Chinese companies own 59 percent of lithium and 73 percent of cobalt processing and refining capacity, according to a July 2022 Brookings Institution report. Those two critical minerals, in addition to copper and nickel, are vital for EV batteries and other green energy technologies.
China’s utter dominance of electric vehicle and battery supply chains makes it hard for Democrats to fully crack down on the nation’s stranglehold on electric vehicles as they pursue aggressive measures to push greater adoption of the technology. The Biden-Harris administration, for example, recently finalized regulations that would ensure more than half of all new cars sold by 2030 are electric.
On Wednesday, the White House issued a strongly worded statement condemning Miller’s End Chinese Dominance of Electric Vehicles in America Act but notably stopped shy of promising that President Joe Biden would veto it if passed by the Senate.
The White House said the bill “would raise taxes on American consumers, punish American auto manufacturers, threaten good-paying auto jobs, undermine our Administration’s work to protect the American automotive supply chain from unfair Chinese competition, and set back efforts to achieve energy security and combat climate change.”
Original News Source – Washington Free Beacon
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