Cornyn to IRS Commissioner: Democrats’ EV Tax Credits Will Enrich China

Today in the Senate Finance Committee, U.S. Senator John Cornyn (R-TX) questioned Internal Revenue Service (IRS) Commissioner Daniel Werfel on the Biden administration’s out-of-touch electric vehicle tax credits included in the Inflation Reduction Act, which will subsidize the purchase of Chinese-made batteries using American taxpayer dollars. Excerpts are below, and video can be found here.

CORNYN: “The Inflation Reduction Act, in addition to throwing gasoline on the fire of inflation with $700 billion of additional spending, added to the debt. As part of the Inflation Reduction Act, this partisan bill – voted on exclusively by our friends on the Democratic side of the aisle, signed into law by the President – lavishes rich subsidies for electric vehicles, up to $7,500 credit for electric vehicles.”

“It was originally advertised as being a $30-billion expenditure. And the truth is, it looks like it’s going to be closer to $200 billion. Six and a half times higher than advertised.”

“77% of the batteries made in the world are made by China.”

“Is there any way that it will do anything except increase the sale of Chinese-made batteries here in the United States?”

WERFEL: “I don’t know the answer to that question.”

CORNYN: “The Inflation Reduction Act – misnamed I might add – actually provides a smorgasbord of credits for electric vehicles. For example, there’s a $4,000 credit for used electric vehicles at Section 25E. There’s a $40,000 tax credit for commercial electric vehicles. That’s Section 45W. And then there’s a tax credit for fuel cell cars, which is Section 30B. Do you know if these other credits have the same critical mineral and battery sourcing requirements as the $7,500 EV credit?”

WERFEL: “Senator, I don’t know that at my fingertips.”

CORNYN: “It appears to me that the American taxpayer will be subsidizing the purchase of Chinese-made, and commercial and used electric vehicles by virtue of these tax credits. So we’d appreciate your getting back to us with that information.”