On Saturday, a proposal from Democratic leaders in the U.S. was sharply criticized by Toyota Motor Corp and Honda Motor Co. In the United States, the House of Representatives will give an additional $4,500 tax credit to union-made electric vehicles. Toyota claims the new plan unfairly targets unionized American workers. The unionized plants of Detroit’s Big Three automakers would benefit from this policy change.
According to a Honda statement, the bill is unfair and discriminates against E.V.s built by hard-working American auto workers due to their membership in a union. The Honda associates working in Alabama, Indiana and Ohio who will build Honda EVs deserve to be treated fairly and equally.
With this proposal, a maximum tax credit of $12,500 could be offered for electric vehicles, up from the current $7,500. An estimate of $33 billion to $34 billion over ten years is included in the proposal. The utilization of U.S.-produced batteries is credited with $500 toward the $12,500 figure.
Using this proposal, Democratic president Joe Biden hopes to ensure at least 50% of new U.S. vehicle sales will derive from E.V.s by 2030 and provide union jobs for American workers.
Although the bill eliminates the phase-out of auto companies’ tax credits when 200,000 electric vehicles are sold. It does not phase out the automakers’ tax credits. As a result, General Motors Co. and Tesla Inc. would be eligible again. Furthermore, a $2,500 credit provide for used E.V.s. All three companies assemble their vehicles in unionized plants, including Ford Motor Company, G.M. and Chrysler parent Stellantis NV.
On the other hand, Tesla does not employ unionized assembly workers. Many foreign automakers also do not have unions in the U.S. Many foreign automakers have opposed the UAW’s efforts to organize U.S. plants. Several thousand dollars in credits would be available to Tesla under the proposed legislation.
Ray Curry, president of the UAW, said the tax credit provision would contribute to the retention of good-paying union jobs in the E.V. auto industry, a cause which President Biden has championed. Under the bill, electric cars are restricted to prices up to $55,000, while trucks may be priced up to $74,000.