A proposal by US House Democratic lawmakers to give union-made electric vehicles higher subsidies drew criticism by non-unionised automakers, including Toyota Motor Corp., Tesla Inc. and Rivian Automotive Inc.
Under the 10-year proposal unveiled late Friday, union-built electric vehicles will get an additional US$4,500 (RM18,641) tax incentive, a measure that would favour the three traditional Detroit carmakers – General Motors Co., Ford Motor Co. and Stellantis NV – whose factory workers are represented by the United Auto Workers. That sweetener would be on top of a US$7,500 (RM31,068) base incentive that would be available for EV vehicles.
The current draft discriminates "against American autoworkers based on their choice not to unionise,” Toyota said in a statement Saturday. "We will also fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers.”
Tesla Chief Executive Officer Elon Musk tweeted that the proposal smacked of being heavily influenced by the UAW. Rivian, the electric-truck maker backed by Amazon.com Inc., said the expansion of the tax credit is a "step in the right direction” but that the proposal "risks confusing” potential buyers.
"Rivian supports a straightforward expansion without artificial limits to encourage EV adoption to as many households as possible,” the Irvine, California-based startup, whose electric pickup truck isn’t yet available for sale, said in a statement on Sunday.
Foreign automakers and other non-unionised carmakers have been voicing their unease with signs the Biden administration wants to give their unionised Detroit rivals a leg up in the race to win over electric vehicle buyers. Toyota, Honda Motor Co., and Tesla were all left out in a White House event in August, during which President Joe Biden unveiled a national goal of having half of new cars sold in the US to be emissions-free by 2030.
The House Ways and Means Committee’s plan would provide a base credit of US$7,500 (RM31,068) for electric vehicles for the first five years, with another US$4,500 (RM18,641) credit for those made in a union facility. An additional US$500 (RM2,071) credit will be provided for vehicles using a domestically manufactured battery.
The proposal was for inclusion in Democrats’ US$3.5tril (RM14.51tril) tax-and-spending legislation, according to Representative Dan Kildee, a Michigan Democrat. Passage of that bigger package has been delayed as Senator Joe Manchin, a Democrat whose vote is crucial in the evenly split US Senate, renewed objections to the bill, citing tax and inflation concerns.
Additional details from the House Ways and Means Committee’s plan include:
- Elimination of the current cap of 200,000 vehicle per manufacturer for tax credit, a decision that would help GM and TeslaCredit would only apply to vehicles that have a manufacturer’s suggested retail price of less than $55,000 (RM227,837) for a car, $64,000 for a van, US$69,000 (RM265,120) for an SUV and US$74,000 (RM306,545) for a pickup truck.
- Credit would have annual income limitation of US$400,000 (RM1.66mil) for an individual, US$600,000 (RM2.48mil) for heads of household and $800,000 (RM3.31mil) for couples.
- Starting in 2027, the US$7,500 (RM31,068) base credit would apply only to EVs built in the US, while Tesla – the biggest seller of EVs in the US – would benefit by having the 200,000-vehicle cap removed, it too is a non-union shop and as such its customers would miss out on the sweetener.
- Musk, in his tweet, said the proposal smacked of being heavily influenced by the UAW and by Ford, which for now builds its only current EV – the Mustang Mach-E – in Mexico. Foreign-built EVs sold in the US are eligible for the credit in the first five years.
Ford’s battery-powered F-150 Lightning will be built at a new factory in Dearborn, Michigan, that Biden visited in May. The Lightning is scheduled to go on sale next spring.
A UAW representative didn’t respond directly to Musk’s tweet, other than to point to a Saturday statement lauding the plan and the refocusing of the subsidies on US-built vehicles after the first five years.
A Ford representative didn’t immediately respond to a request for comment outside regular business hours. – Bloomberg
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