Unionised US EV incentive plan meets opposition

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Toyota and Tesla have clashed with Ford and the United Auto Workers (UAW) union over a proposal by Democrats in the US House to give union-made, US-built electric vehicles an additional US$4,500 tax incentive, a report said.

According to Reuters, Toyota said, in a letter to Congress, the plan discriminates against nearly half of American autoworkers who do not belong to a union and called on lawmakers to reject giving “exorbitant tax breaks” to wealthy buyers of high priced cars and trucks.

The bill, set to be taken up today by the powerful House Ways and Means Committee as part of a proposed $3.5 trillion spending bill, would benefit Detroit’s Big Three automakers  which assemble their US-made vehicles in UAW-represented plants.

Reuters said the proposal boosts the maximum tax credit for these electric vehicles to $12,500 – including a $500 credit for using US-made batteries – from the current $7,500, which stays the same for all others. The bill also does away with phasing out tax credits after automakers hit 200,000 electric vehicles sold which would make GM eligible again, along with Tesla, although Tesla would not receive the higher credit.

According to the news agency, Tesla chief executive Elon Musk said on Twitter on Sunday the EV incentives were “written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers”.

The electric Mustang Mach-E, made in Mexico, would not qualify for the larger tax credit.

Ford spokesman Mark Truby said Ford would build its EV F-150 Lightning in Michigan and all-electric E-Transit van in Kansas City “with much more to come”.

Honda Motor, with numerous auto plants in Alabama, Indiana and Ohio, said the EV incentive “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union”.

Toyota does not currently build any full EVs in the United States but has plans to sell two in the US next year, Reuters said.

But Stellantis praised the plan, saying it “spur the market by making electrified vehicles affordable for more Americans, which in turn will support well-paying, middle-class jobs”.

The bill also proposes a new EV tax credit for commercial vehicles, a 15% credit for electric bicycles and a $2,500 credit for used EVs, Reuters noted.

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