Proposed Legislation Favors Union-Made EVs

Never mind the fear of “range anxiety." Consumers might have one more thing to consider when choosing an electric vehicle — a tax break, based on which automaker made it.

Non-unionized automakers like Honda and Toyota are disappointed that the House Ways and Means Committee is proposing an expansion to the EV consumer tax incentive “in an unfair manner that discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union,” according to a statement from Honda.

“Honda is committed to vehicle electrification to meet our climate objectives and recently announced an ambitious vision to make battery-electric and fuel cell electric vehicles represent 100% of our vehicle sales by 2040,” according to the automaker. “The Honda production associates in Alabama, Georgia, Indiana and Ohio who will build our EVs deserve fair and equal treatment by Congress.”

The bill, scheduled for a vote Tuesday by the Democratic-led House Ways and Means Committee, is part of a proposed $3.5 trillion spending bill that would benefit Detroit's Big Three automakers, which have union-represented auto plants.

The proposal would increase up to a maximum of $12,500 the tax credit for electric vehicles, up from the current $7,500. The maximum would include a $4,500 credit available for vehicles made at a unionized U.S. facility. The maximum also includes a $500 credit for vehicles that use U.S.-produced batteries.

Incentives to invest in EV manufacturing technologies are critical for all automakers, per Honda. 

“If Congress is serious about addressing the climate crisis, as well as its goal to see these vehicles built in America, it should treat all EVs made by U.S. auto workers fairly and equally,” per the Honda statement. “We urge Congress to remove discriminatory language tying unionization to incentives from its budget reconciliation proposal.”

Toyota said in a statement that the plan unveiled late Friday discriminates "against American autoworkers based on their choice not to unionize."

Unionized automakers like Stellantis (formerly Fiat Chrysler Automobiles) who use union-made batteries had a far different reaction.

“As Stellantis continues our aggressive electrification push — highlighted by an investment of more than $35 billion through 2025 — we are pleased to see Congress match the industry's commitment with meaningful inducements that will help consumers make the switch to electric vehicles,” according to a statement from the automaker.

One thing all automakers can agree on is that consumer incentives -- as well as a significant pledge to increase public charging infrastructure -- are both critical in creating a robust EV ecosystem.

“The House Ways & Means Committee's proposed incentives will spur the market by making electrified vehicles affordable for more Americans, which in turn will support well-paying, middle-class jobs in the nation's largest manufacturing sector,” per the Stellantis statement.

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