Tesla, Toyota and Honda criticize $ 4,500 tax credit for electric vehicles made by the union

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

SeongJoon Cho | Bloomberg | Getty Images

DETROIT – Tesla, Toyota Motor and other automakers criticize a $ 12,500 proposal in tax incentives for electric vehicles that includes extra money for cars and trucks made by unions produced in the United States

Executives with automakers, including Tesla CEO Elon Musk, have said the $ 4,500 incentive for vehicles assembled at a union plant unfairly favors General Motors, Ford Motor and Stellantis (formerly Fiat Chrysler). ). Workers for now for those car manufacturers – traditionally known as Detroit 3 – are represented by the United Auto Workers union.

The comments came ahead of the EV incentive package that was discussed Tuesday by the Household Modes and Means Commission as part of a $ 3.5 trillion spending bill.

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

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

Tesla produces the most batteries for electric vehicles and vehicles in the United States, but its workforce, like Toyota and other non-domestic automobile manufacturers, is not represented by a union. Hyundai, Kia, Honda and Nissan also opposed the project, citing that the incentive given by the union is unfair and prejudicial.

Incentives include a current tax credit of $ 7,500 to purchase a plug-in electric vehicle and $ 500 if the vehicle’s battery is made in the United States. returns to be eligible for incentives. VE Buyers produced by unionized workers in the United States will be eligible for an additional $ 4,500 in tax credits, bringing the total incentives to $ 12,500.

Toyota described the bill as “unfair” and “wrong,” citing that the proposal discriminates against its non-unionized U.S. workforce.

“The current draft of the Committee on Modes and Months aims to accelerate the deployment of electric vehicles based on discrimination against American workers based on their choice not to unionize,” the leaders said. of Toyota manufacturing in a letter Monday to committee chairs. “This is unfair, it’s wrong, and we ask you to reject this blatant proposal.”

Honda made similar comments in a statement on its website: “If Congress is serious about tackling the climate crisis, and also aims to see these vehicles built in America, it should treat all vehicles made by American workers. “We urge Congress to remove the discriminatory syndication that links language to incentives from its proposed budget reconciliation.”

GM, Ford and Stellantis support the EV incentive package.

“This legislation will help more Americans enter electric vehicles, while at the same time supporting U.S. manufacturing and union jobs,” Kumar Galhotra, Ford’s president of America and international markets, said in a statement. .

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

Autos Drive America, a lobby organization representing international carmakers in the United States, has called the EV incentive package “un-American” by creating an “unlevel playground that will limit consumer choice and punish workers.” non-union Americans, their families, and their communities. “

The proposed EV credits will last 10 years, allowing consumers to deduct the value of the credit from the sale price at the time of purchase, according to Reuters.

The EV incentive package is estimated to cost about $ 15.6 billion, according to the Joint Committee on Taxation. It is lower than an initial estimate of $ 33 billion to $ 34 billion by Rep. Dan Kildee, a Michigan Democrat who proposed the legislation.

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

Michael Wayland | CNBC

Beyond the incentive given by the union, members of the Household Modes and Means Commission on Tuesday questioned the national content of the vehicles as well as the project that could benefit the rich.

The bill says individual taxpayers must have an adjusted gross income of no more than $ 400,000 to get the new EV tax credit. It would also limit EV credit to cars at a price no higher than $ 55,000 and trucks up to $ 74,000.

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