From “patently biased” to “discriminatory”: Tesla, Toyota and Honda slam $ 4,500 tax incentive for electric vehicles for vehicles made by unions


A man attaches a charging plug to a General Motors Co. (GM) Chevrolet 2017 Volt hybrid electric vehicle (EV) at a charging station in Jeju, South Korea.

Seong Joon Cho | Bloomberg | Getty Images

DETROIT – Tesla, Toyota Motor and Honda Motor slam $ 12,500 electric vehicle tax incentive plan that includes extra cash for union cars and trucks produced in the United States

Executives of automakers, including Tesla CEO Elon Musk, said the incentive of $ 4,500 for vehicles assembled at a union factory unfairly favors General Motors, Ford Motor and Stellantis (formerly Fiat Chrysler). Hourly workers at these automakers – traditionally known as Detroit 3 – are represented by the United Auto Workers union.

The comments were made before the EV incentive program was discussed by the House Ways and Means Committee on Tuesday in a $ 3.5 trillion spending bill.

“This is written by Ford / UAW lobbyists as they build their electric car in Mexico. It’s not clear how this serves American taxpayers,” Musk tweeted Sunday night.

Ford’s only all-electric vehicle currently is the Mexico-built Mustang Mach-E crossover. The company plans to produce electric versions of the F-150 pickup and Transit van in the United States starting next year.

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Tesla produces the most electric vehicle and car batteries in the United States, but its workforce, like Toyota and Honda, is not union represented.

The incentives include a current tax credit of $ 7,500 for the purchase of a rechargeable electric vehicle as well as $ 500 if the vehicle’s battery is manufactured in the United States. be eligible for the incentive again. Buyers of electric vehicles produced by unionized workers in the United States would be eligible for an additional $ 4,500 in tax credits, bringing the total incentives to $ 12,500.

Toyota called the bill “unfair” and “bad,” citing the proposal that discriminates against its non-unionized US workforce.

“The current Ways and Means Committee project makes secondary the objective of accelerating the deployment of electrified vehicles by discriminating against American auto workers on the basis of their choice not to unionize,” executives said Monday. Toyota in a letter to the committee chairs. “This is unfair, this is wrong, and we ask you to reject this blatantly biased proposal.”

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Honda made similar comments in a statement on its website: “If Congress is serious about the climate crisis, as well as its goal of having these vehicles built in America, it should address all electric vehicles made by them. American auto workers fairly and equally. We urge Congress to remove discriminatory language linking unionization to the incentives of its budget reconciliation proposal. “

GM, Ford and Stellantis support the EV incentive program.

“This legislation will help more Americans get into electric vehicles while supporting American manufacturing and union jobs,” said Kumar Galhotra, Ford president for the Americas and International Markets, in a statement.

President Joe Biden is pro-union and has continuously supported incentives to expand American production of electric vehicles.

Autos Drive America, a lobbying organization representing international automakers in the United States, has called the electric vehicle incentive program “un-American” by creating an “unequal playing field that will limit consumer choice and punish consumers. American non-union workers, their families and their communities. . “

The proposed EV credits would last for 10 years, allowing consumers to deduct the value of the credit from the sale price at the time of purchase, according to Reuters. Representative Dan Kildee, a Democrat from Michigan who proposed the legislation, told the news agency that the new electric vehicle tax credit would cost between $ 33 billion and $ 34 billion during this period.

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President Joe Biden speaks during a tour of the Ford Rouge Electric Vehicle Center in Dearborn, Michigan on May 18, 2021.

Michael Wayland | TBEN

Aside from the union incitement, members of the House Ways and Means Committee on Tuesday raised questions about the national content of the vehicles as well as the bill potentially benefiting the wealthy.

The bill states that individual taxpayers must have an adjusted gross income of no more than $ 400,000 to qualify for the new electric vehicle tax credit. It would also limit the EV credit to cars priced up to $ 55,000 and trucks up to $ 74,000.

Volkswagen, Hyundai and other automakers declined to comment or did not respond to comments on the electric vehicle tax incentive program. Nissan has said it supports Autos Drive America’s statement.