US Senator Might Sue Treasury Department Over EV Battery Sourcing Regulations

West Virginia Democrat Senator Joe Manchin made it clear to Automotive News that he's prepared to sue the US Treasury Department over upcoming new battery production sourcing rules that are a part of the Inflation Reduction Act (IRA).

These rules are expected to be revealed shortly after they were delayed in late December. Manchin's concern is how the Treasury could define the battery manufacturing process. More specifically, he wants to ensure EV battery production will be in the US, not China. It's no coincidence that he happens to be the Senate Energy Committee Chairman.

"What I'm most concerned about is how they classify the processing with manufacturing," he said. "Manufacturing is meant to bring manufacturing back to the United States. It's not basically allowing everyone to put all the parts and build everything you can for that battery somewhere else and then send it here for assembly."

This is not the first time Manchin has taken a hard stance against battery sourcing requirements.

In January, Manchin wanted to close a loophole in the IRA by requiring a certain amount of battery materials to be sourced from North America, not China. He also wants this amount to be increased by the end of 2023.

"I think they're going to try to screw me on this," Manchin added. "I'm willing to go to court. I'm willing to stop it all." This is not something automakers want to see happen, especially those whose plug-in electric vehicles are not built in the US, such as the Hyundai Ioniq 5.

The guidance is expected to state that 40% of an EV battery's main elements must be extracted or processed in either the US or a country that has a free trade agreement with the US. Materials that have been recycled in North America will also qualify. By 2027, that figure will increase to 80%. Battery components, meanwhile, must have a 50% North American production figure and, come 2029, 100%.