The Inflation Reduction Act was a key piece of legislation passed by the U.S. Congress in 2022. A senator is now working to delay one of the key pieces of the legislation, in a move that could be a conflict of interest.
What Happened: Sen. Joe Manchin (D-WV) was one of the key people involved in the Inflation Reduction Act (IRA), which included new tax credits for electric vehicles.
Manchin is now looking to introduce a bill that would delay the tax credits for electric vehicles under the IRA. The news, reported by The Wall Street Journal, came as there had been disagreements with the Department of Treasury on how to roll out the credits program.
The $7,500 per vehicle tax credit had also been the subject of controversy from Ally countries in Europe and Asia, which could be hurt by tax credits rules.
Under the legislation, 40% of the minerals in the electric vehicle’s battery have to come from the U.S. or a country that had a free-trade deal in place with the U.S.
“The IRA is first-and-foremost an energy security bill, and the EV tax credits were designed to grow domestic manufacturing and reduce our alliance on foreign supply chains,” Manchin said. “The IRA and the EV tax credits must be implemented according to Congressional intent.”
Democrats in Congress widely supported the IRA, which could make Manchin’s proposed bill tough to get off the ground. The bill did not have a co-sponsor at the time of writing and had seen little support.
Why It’s Important: Manchin was a central figure in getting the IRA passed, but as Benzinga shared he might have had huge conflicts of interest in doing so.
One planned follow-up measure for the bill would have seen federal environmental reviews sped up for energy projects, something that was dropped from the bill. Manchin also told the Senate he wouldn’t support economic packages that included new spending on climate change.
Manchin serves as a member of the Senate Energy and Natural Resources Committee, which helps regulate the industry.
Clean energy bills were seen as helping provide a boost to electric vehicles, solar power and wind power and put less reliance on fossil fuels such as coal, oil and natural gas. This was where the potential conflict of interest may have come into play.
Manchin founded a coal business in 1998 that is now known as Enersystems. Manchin said he has no control over the family business, which is now run by his son Joe Manchin IV.
As previously reported, a Senate financial disclosure report filed in May 2021 showed Manchin was paid $491,949 for the year by Enersystems. The filling said the payment was for “contract services and material provider for utility plants.”
The filing also showed Manchin owned a stake in the company valued between $1 million and $5 million.
Manchin had been a strong supporter for the coal industry over the years, citing the importance of the sector for his home state of West Virginia, while the support could also help his own economic interests.
Manchin received numerous political action committee donations from oil and gas companies, including many from outside his home state of West Virginia.
Manchin made more than $4 million on stock in Enersystems since 2012 and has a net worth of $5.2 million, according to Ballotpedia, despite an annual salary of $174,000.
The Senator denied his interest in the coal industry influenced policymaking for the energy sector, but critics see a clear potential conflict of interest.
Manchin’s previous attempts to stall the IRA over clean energy initiatives and the new call to stall the $7,500 electric vehicle tax credit could come with a huge red flag and conflict of interest.
Price Action: Shares of many clean energy-related names in the electric vehicle and charging infrastructure sectors are down Wednesday on news of potential tax credit delays.
Here are some of the biggest movers:
Tesla Inc TSLA: -0.55%
Plug Power Inc PLUG: -4.36%
Rivian Automotive Inc RIVN: -0.50%
Fisker Inc FSR: -5.82%
ChargePoint Holdings CHPT: -3.06%
The sharp moves down come as the SPDR S&P 500 ETF Trust SPY is trading down 0.81% on Wednesday at publication.
Photo: Sen. Joe Manchin website