Saturday, August 23, 2025

Joe Manchin Doesn’t Want Foreign Cars to Qualify for EV Tax Credit

US drivers buying imported cars may potentially qualify for new EV tax credits that are part of the Inflation Reduction Act, easing foreign carmakers’ worries about America’s strengthening shift towards tighter climate regulation.

The US Treasury Department has indicated that some imported electric vehicles could qualify for EV tax credits under the Inflation Reduction Act. The department released a list of frequently asked questions last week, in which it indicated that imported EVs could be eligible for a consumer tax credit of up to $7,500 through a commercial-vehicle clause in the law by leasing them.

However, the move has prompted criticism from West Virginia Senator Joe Manchin, who has called for the implementation of both the commercial and consumer EV tax credits to be paused until the department issues “the appropriate guidance.” Manchin plans to introduce legislation that “further clarifies the original intent of the law and prevents this dangerous interpretation from Treasury from moving forward.”

According to Manchin, the current interpretation “bends to the desires of the companies looking for loopholes and is clearly inconsistent with the intent of the law.” He insists that tough rules need to be implemented on who can claim tax credits, otherwise the US would be complicit in subsidizing production in China and other rival countries.

As such, Manchin plans to introduce a new set of legislation that will give some clarity to the original law, and stop the Treasury’s interpretation from moving ahead. In order to encourage domestic EV manufacturing, cars can only qualify for the $7,500 consumer tax credit if 40% of the EV’s battery was manufactured with raw materials derived from nations holding a free-trade agreement with the US, while 50% of the battery’s components must be made domestically.

Hyundai, along with South Korea’s government, extensively lobbied the White House to take a relaxed interpretation of the clause, ultimately allowing cars to take advantage of the tax credit without meeting the criteria on EV batteries and the raw materials they are comprised of.


Information for this briefing was found via the IRS and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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