Manchin Pushes Bill to End Current Electric Vehicle Tax Relief Grace Period


Photo: Justin Sullivan (Getty Images)

The electric car tax break’s biggest enemy will stop at nothing, Tesla is doubling down on Semi production in Nevada, and Volvo has a big recall. All this and more in Morning Shift Wednesday, January 25, 2023.

1st gear: Manchin not happy

Since early 2023, automakers have been able to circumvent battery source regulations that cut the federal tax credit for electric vehicles in half. As a result, a number of normally ineligible vehicles have temporarily taken advantage of the full $7,500 rebate and may continue until March, when the US Treasury plans to communicate battery guidance to manufacturers. Once the Treasury does that, the party is over.

West Virginia Senator Joe Manchin, who fought to make the Inflation Reduction Act EV credit as exclusive as possible in the first place, seems to hate the fact that buyers will be able to take a break within the next five or six weeks. He hates it so much that he proposed another bill, just to ensure that all IRA demands are met immediately. Courtesy of Automotive News:

The bill, entitled the American Vehicle Safety Act, would amend the Inflation Reduction Act so that the effective date of the required EV battery source is no longer tied to the Treasury issuing proposed cap guidelines.

If passed, the loan will not be available for any new electric vehicle that does not meet critical mineral and battery source requirements retroactive from January 1.

A Democratic Party committee aide told Automotive News on Tuesday that the bill has not yet received bipartisan support or co-sponsors because it has not been discussed outside of internal discussions. According to the assistant, the information was also not shared with representatives of the automotive industry.

The Treasury plans to publish proposed guidance on critical requirements for mineral and battery components of the consumer tax credit in March after a year-end deadline was missed in 2022. It will also publish proposed rulemaking that further clarifies key provisions that are already in place, such as price caps and vehicle classification.

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Given the bill’s complexity, it is hoped that the government will take the time to clarify its language for corporations and consumers. A lot depends on this. But Manchin’s interest in the loan stops at “energy security” – can anyone actually claim that it’s a minor issue, which is why the IRA was written in such a way as to exclude perhaps every current electric car from the rebate. Suitable, considering what the senator is holding on to. Here is what he said in a statement released on Wednesday morning:

In a statement Wednesday, Manchin said it was “unacceptable” that the Treasury has yet to release the proposed guidance but continues to provide the full $7,500 loan.

The Inflation Reduction Act “is first and foremost an energy security bill, and electric vehicle tax breaks were designed to boost domestic production and reduce our reliance on overseas supply chains for critical minerals needed to make batteries for electric vehicles,” he said.

There will be no need to develop domestic battery production if no one can afford electric vehicles within the next five years, which was probably the plan from the beginning.

2nd gear: Tesla is here to stay (in Nevada)

Tesla has big plans for its Nevada plant, in which the company has invested $6.2 billion since construction began in 2014. In addition to expanding production of 4680 passenger car battery cells, it is hoped that the Nevada plant will become the automaker’s electric vehicle manufacturing hub. Semifinished. From the Wall Street Journal:

Tesla Inc. said it will spend more than $3.6 billion to expand its plant near Reno, Nevada, where the electric vehicle maker assembles batteries and manufactures automotive components for electric vehicles.

The automaker, led by Elon Musk, said its investment plan would expand its production of lithium-ion batteries and electric vehicle components and employ 3,000 additional workers.

One of the factories to be built will mass-produce its semi-trailer truck, while the other will produce enough batteries for two million passenger cars every year, Tesla said in a blog post on Tuesday.

Since 2014, the company has invested $6.2 billion in Nevada and built 5.4 million square feet of facilities there. In addition, over the past nine years, the company has hired more than 11,000 employees to produce about 7.3 billion battery cells and 3.6 million actuators.

The Nevada expansion plans came shortly after the company filed paperwork for a potential $775 million expansion at its electric vehicle plant near Austin, Texas, which is also set to focus on manufacturing batteries and automotive components.

Production of the Tesla Semis reportedly began in October, with Pepsi, the electric car maker’s first customer, expecting to produce 100 of the vehicles later this year.

3rd gear: these are brakes for Volvo

On Tuesday, Volvo announced a recall of nearly 107,000 vehicles worldwide, including 2023 versions of the C40, XC40, S60, V60, XC60, V90 and XC90. 27,500 of them are in the US and the problem is with the brake control computer. Courtesy of Blue Book Kelly:

The problem, according to Volvo to federal safety regulators, starts when this computer runs a self-test to make sure it’s properly grounded. If the test returns an error, it may enter a failure state that will disable several electronic security systems.

Volvo says: “The driver display will always alert the customer with DIM messages and malfunction indicators if this problem occurs.”

Volvo is not aware of any accidents or injuries related to this issue.

The good news is that the tool will be delivered by air, as there should always be a tool to fix software problems. On the one hand, this makes it much easier to work with some reviews these days. On the other hand, this means that automakers are encouraged to play fast and loose with this stuff because it’s easy enough to fix later.

4th Gear: Ethiopia Files Unsatisfactory Report on 737 Max

The U.S. National Transportation Safety Board is not overly pleased with Ethiopia’s report on its flag carrier’s Boeing 737 Max crash investigation in March 2019, arguing that it “did not adequately review the performance of the flight crew” and the implementation of emergency procedures that contributed to the accident. tragedy. From Reuters:

NTSB Chair Jennifer Homendy said in an interview that the Ethiopian Aircraft Investigation Bureau (EAIB) made mistakes in its report.

“We think they didn’t really look into the problems with the flight crew and whether they were properly trained,” Homendy said. “We felt it wasn’t as comprehensive and reliable as it could have been.”

The 2018 and 2019 MAX crashes in Indonesia and Ethiopia that cost Boeing more than $20 billion resulted in a 20-month ban on the top-selling aircraft that was lifted by regulators after Boeing made software changes and pilot training. Boeing declined to comment on Tuesday.

Homendy said the NTSB was not given the opportunity to review or comment on Ethiopia’s final report before it was made public last month, in violation of rules overseen by the Montreal-based United Nations aviation agency, ICAO.

In December, the Boeing 737 Max 7 and 10 aircraft were cleared to fly without the Engine Indication and Crew Alert System, a technology that “informs pilots about what is wrong on board the aircraft and also gives pilots instructions on how to fix the problem.” . on Simple Flying. It would most likely cost the company at least $1 billion. However, under a ruling by Washington Senator Maria Cantwell, airline operators must implement “a synthetic enhanced angle of attack (AOA) system and the ability to disable stall and overspeed warnings” and be funded by Boeing for three years. aircraft certification.

5th gear: Ford’s European plant has fans

The plant in Saarlouis, Germany, which currently builds the Ford Focus, probably won’t be doing so in a few years. Ford of Europe has been honest in its consideration of the sale, and the company could soon lay off up to 3,700 employees from its payroll in the region. But listen, don’t worry about Ford – everything will be fine. There is already third-party interest in Saarlouis! From Automobilwoche via Automotive News:

According to people familiar with the talks, Magna International and contract manufacturer VDL Nedcar are interested in acquiring Ford Motor Co.’s automotive plant. in Saarlouis, Germany.

Both companies are joining China’s BYD in showing interest in a plant that won’t have a new model when Ford ends production of its Focus compact car in 2025.

The future of the plant has been uncertain since last June, when Ford chose its plant in Valencia, Spain, to build next-generation electric vehicles for Europe instead of Saarlouis.

Canada’s Magna and Netherlands-based VDL Nedcar are considering bidding for the Saarlouis plant, sources familiar with the talks told sister publication Automotive News Automotive News.

Magna manufactures BMW, Mercedes-Benz, Jaguar, Toyota and Fisker vehicles at its Magna Steyr plant in Graz, Austria.

VDL Nedcar manufactures X1 and Mini vehicles for the BMW Group.

BYD is reportedly leading the way as Ford officials plan to visit the Chinese electric vehicle maker next week to discuss a possible sale.

Reverse: Dakar

On this day 55 years ago, the Israeli submarine Dakar went missing in the Mediterranean between Crete and Cyprus. It was only discovered in 1999 at a depth of 9800 feet.

Neutral: I really want to see a Super GT race for once in my life

Battle of fate

Here are the coolest cars from all kinds of motorsports, with the best coloring and racing on the best tracks. A few years ago, Sega had an arcade game in Japan based on the Super GT, which is fine (you can play it if you’re good with an emulator), but the soundtrack sounds so complex that I can’t stop listening to it for days.

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