Unions are urging the Biden administration not to change EV tax credit rules

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By David Shepardson

WASHINGTON (Reuters) – Major unions and advocacy and environmental groups are urging President Joe Biden to reject efforts by the European Union and other foreign governments to review US tax incentives for electric vehicles.

The $430 billion U.S. Inflation Reduction Act (IRA) passed in August limits $7,500 in consumer tax credits to North American-made electric cars, but the U.S. Treasury Department said in December that consumers who lease vehicles sold outside of North America America are able to take advantage of the $7,500 commercial green vehicle tax credit.

Foreign governments have put pressure on the Biden administration to do more to expand credit.

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“The IRA has the potential to be a game changer for the industrial cities hardest hit by decades of offshoring,” said an audience made Friday by the United Auto Workers, International Association of Machinists and Aerospace Workers, United Steelworkers, the Sierra Club and Public Resident.

“We strongly urge you to ensure that the IRA is carried out as intended, without delays or technical changes that undermine its promises to American workers and climate goals,” it said.

The White House did not comment on the letter on Friday, but pointed to Biden’s statements in September that the IRA bill would create “high-paying union jobs” and “increase energy security.”

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EU ambassador to the United States Stavros Lambrinidis said at the Washington auto show on Thursday he was concerned about the EV tax credit’s “discriminatory” provision, arguing it means US consumers will have “much less choice in what they can buy”. can receive the $7,500 credit.

“You can go green without discriminating,” said Lambrinidis.

The letter rejected foreign governments’ suggestion that the tax breaks for electric vehicles violate World Trade Organization rules and free trade. “Outdated trade rules should not be used to undermine our laws designed to support a growing, clean energy economy,” the letter said.

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The EU in December praised the US Treasury Department’s decision to allow consumer-leased EVs to qualify for up to $7,500 in tax credits for clean commercial vehicles.

South Korea, Europe and some automakers had sought Treasury approval in December to use the commercial electric vehicle tax credit to boost consumer access to electric vehicles.

(Reporting by David Shepardson; editing by Bill Berkrot)