DETROIT, MI — Tesla, Toyota Motor, and other manufacturers are slamming a planned $12,500 EV tax credit that includes additional money for union-built cars and trucks made in the United States.
Auto executives, including Tesla CEO Elon Musk, have complained that the $4,500 incentive for automobiles manufactured at a union factory unjustly benefits GM, Ford, and Stellantis (formerly Fiat Chrysler). The United Auto Employees union represents hourly employees for those automakers, who are known as the Detroit 3.
The statements were made ahead of the House Ways and Means Committee’s discussion of an electric vehicle incentive package on Tuesday as part of a planned $3.5 trillion spending measure.
“This is published by Ford/UAW lobbyists since their electric car is manufactured in Mexico. “It’s not clear how this benefits American taxpayers,” Musk tweeted late Sunday.
The Mustang Mach-E crossover, which is produced in Mexico, is presently Ford’s sole all-electric car. Starting next year, Ford plans to build electric models of the F-150 pickup truck and Transit van in the Us.
Tesla, like Toyota and other non-domestic carmakers, manufactures the most vehicle batteries and electric automobiles in the United States, yet its workers are not defined by a union. Hyundai, Kia, Honda, and Nissan are among the automakers who reject the law, claiming that the union-created incentive is unjust and prejudiced.
A $7,500 tax credit is now available for the purchase of a plug-in electric car, with an additional $500 if the vehicle’s battery is produced in the United States. The law also eliminates the credit’s 200,000-vehicle phase-out, making it available to GM and Tesla buyers once again.
Buyers of electric vehicles made in the United States by unionized employees would receive an extra $4,500 in tax credits, bringing the total incentives to $12,500.
Toyota called the law “unfair” and “wrong,” claiming that it discriminates against its non-unionized employees in the United States.
“By discriminating against American production workers relying on their choice not to unionize, the present Ways and Means Committee draft puts the goal of speeding the adoption of electric cars secondary,” Toyota manufacturing executives wrote to the committee chairmen on Monday. “This is unjust, it is incorrect, and we respectfully request that you reject this clearly prejudiced proposal.”
“If Congress is serious about solving the climate issue, as well as its objective of seeing these cars manufactured in America, it must treat all EVs created by U.S. auto employees fairly and equally,” Honda said in a statement on its website. We encourage Congress to delete discriminatory wording from their reconciliation bill plan that ties unionization to incentives.”
The EV incentive program has the endorsement of GM, Ford, and Stellantis.
In a comment, Kumar Galhotra, Ford president of the Us and Global Markets, stated, “This legislation will help more Americans get into EVs while also sustaining American manufacturing and union jobs.”
President Joe Biden is pro-union and has consistently backed incentives to increase electric car manufacture in the United States.
The EV incentive package is “un-American,” according to Autos Drive America, a lobbying group that represents international auto companies in the United States because it creates an “unlevel playing field that will limit consumer choice and punish non-unionized American workers, their families, and their communities.”
According to Reuters, the planned EV credits usually lasts ten years and allow buyers to subtract the credit’s amount from the sales price at the time of acquisition.
According to the Joint Committee on Taxation, the EV incentive package will cost around $15.6 billion. Rep. Dan Kildee, a Michigan Democrat who introduced the legislation, had estimated the cost at $33 billion to $34 billion.
Apart from the union-created incentive, participants of the House Ways and Means Committee questioned the domestic material of the cars and if the plan would favor the rich on Tuesday.
Taxpayers should have a total income of no more than $400,000 to qualify for the new EV tax credit, according to the law. It will also cap the EV credit to vehicles costing no more than $55,000 and trucks costing no more than $74,000.