US senator likely to block passage of electric vehicle tax credits – Canadian minister

U.S. Senator Joe Manchin (D-WV) walks through the Senate subway during a vote at the U.S. Capitol in Washington, U.S., April 26, 2022. REUTERS/Elizabeth Frantz

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OTTAWA, June 14 (Reuters) – Canada’s natural resources minister said on Tuesday that U.S. Senator Joe Manchin, a key Democrat, would likely block the passage of tax credits that favor U.S.-made electric vehicles (EVs). United and which Ottawa opposes.

Last year, many Democrats in Congress and President Joe Biden proposed increasing tax credits for electric vehicles up to $12,500, including a $4,500 incentive for vehicles made by manufacturers. unions and assembled in the United States and $500 for batteries manufactured in the United States. The base credit of $7,500 would be limited to only vehicles manufactured in the United States from 2027.

But those provisions were part of a larger infrastructure bill, dubbed “Build Back Better,” that failed to pass Congress largely because of Manchin’s opposition.

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“I had a long conversation with Senator Manchin … who is not in favor of the electric vehicle provision. He is obviously a critical vote if this (bill) goes to another vote” , Natural Resources Minister Jonathan Wilkinson told Reuters in a telephone interview.

“While we continue to be vigilant and continue to engage on the issue … my understanding is that (tax incentives for electric vehicles) may not move forward even if the bill does,” he said. he declares.

Wilkinson met with Manchin last month about two weeks after the senator questioned the need for electric vehicle tax credits during an April 28 hearing.

“There’s a waiting list for electric vehicles right now with the price of fuel at $4 (a gallon). But they still want us to run a credit of $5,000, $7,000, or $12,000 to buy electric vehicles. It doesn’t make sense to me,” Manchin told the Senate hearing. Read more

Manchin’s office did not respond Tuesday to a request for comment on whether he specifically opposes the U.S. production provisions or opposes the entire tax credit expansion to the reason that it was not necessary.

US Energy Secretary Jennifer Granholm told reporters last week that the White House was pushing Congress on tax credits for electric vehicles, but acknowledged that the fate of the proposal was uncertain. “Obviously there are discussions,” Granholm said. “The president would certainly encourage adoption of his original proposal.”

Canadian Prime Minister Justin Trudeau, during a trip to Washington last year, directly pressured Biden to drop the incentives, saying the measures threatened to undermine “50 years of integrated auto manufacturing in our two country”. Read more

Canada, the European Union, Germany, Japan, Mexico, France, South Korea, Italy and other countries wrote to U.S. lawmakers last year saying that credits for Proposed electric vehicle taxes would violate international trade rules, and Canada has pledged to retaliate if they pass. Read more

The pivot to electric vehicles is important for Canada, as it attempts to safeguard the future of its manufacturing heartland in Ontario — where major automakers have long assembled combustion-engine vehicles — as the world seeks to reduce emissions by adopting electric vehicles.

Canada and the United States want all passenger vehicle sales to be zero emissions by 2035.

Since U.S. legislation stalled last year, Canada has joined industry including General Motors (GM.N) to retool assembly lines for electric vehicles, and Stellantis (STLA.MI ), the parent company of Jeep and Chrysler, to build an electric vehicle. battery plant in Windsor in partnership with South Korea’s LG Energy Solution (373220.KS). Read more

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Reporting by Steve Scherer, additional reporting by David Shepardson in Washington; Edition by Lincoln Feast.

Our standards: The Thomson Reuters Trust Principles.

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