Toyota did not wait for the ink to dry. Within hours of House Democrats unveiling a new electric vehicle tax plan late on a Friday, the Japanese automaker put out a statement calling it discrimination “against American autoworkers based on their choice not to unionize.”
Honda joined in on Saturday, according to Reuters. The two companies had one target: a proposal to give union-made electric vehicles built in the United States an extra $4,500 tax incentive.
What the bill would do
The measure was due for a vote on Tuesday in the Democratic-led House Ways and Means Committee, as one piece of a proposed $3.5 trillion spending bill. Reuters put its estimated cost at $33 billion to $34 billion over 10 years.
The headline change is the size of the credit. The maximum would rise to up to $12,500, from the current $7,500, and that figure includes a $500 credit for using U.S.-produced batteries. Cars priced above $55,000 would not qualify, and trucks would be capped at $74,000. A new, smaller credit of up to $2,500 would cover used EVs.
The bill would also scrap the rule that phases out an automaker’s credits once it has sold 200,000 electric vehicles. That would make General Motors and Tesla eligible again. Reuters reported that Tesla could receive up to $8,000 in credits under the bill.
Who wins, who objects
The arithmetic favors Detroit. GM, Ford and Stellantis, the parent of Chrysler, assemble their U.S.-made vehicles in plants represented by the United Auto Workers. Foreign automakers operating in the United States do not have unions representing assembly workers, nor does Tesla, and many of them have fought UAW organizing drives.
Honda called the bill “unfair” and said it “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union.” It added a line aimed squarely at lawmakers: “The Honda production associates in Alabama, Indiana and Ohio who will build our EVs deserve fair and equal treatment by Congress.”
Toyota went further and promised a fight. It said it would “fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers who can’t afford high-priced cars and trucks.”
The union saw it differently. UAW President Ray Curry said the provision “would go a long way in supporting-good paying union jobs in (the) EV auto sector that President Biden has championed.” The proposal is a key part of Biden’s goal of making EVs at least 50% of U.S. vehicle sales by 2030 while boosting American union jobs, Reuters said.
