Toyota, Tesla and Honda sharply criticized a Democrat proposal in the U.S. House of Representatives to give union-made electric vehicles (EVs) an additional $4,500 tax incentive, calling the move “blatantly biased” and “discriminatory.”
Toyota said in a statement that the plan unfairly discriminates “against American autoworkers based on their choice not to unionize.”
The Democratic-led House Ways and Means Committee will vote soon on the plan that is part of a proposed $3.5 trillion spending bill. The legislation benefits Detroit’s Big Three automakers, which have union-represented auto plants.
GM, Ford Motor Co. and Stellantis NV assemble U.S.-made vehicles in plants represented by the United Auto Workers (UAW) union. But foreign automakers operating in the United States, as well as Tesla, do not have unions representing assembly workers. They have fought off efforts by the UAW to organize these U.S. plants.
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. The Honda production associates in Alabama, Indiana and Ohio who build our EVs deserve fair and equal treatment by Congress.”
The proposal will cost taxpayers an estimated $33 billion to $34 billion over 10 years. It will set the maximum tax credit for EVs at $12,500, up from $7,500. This figure also includes a $500 credit for using U.S.-manufactured batteries.
The proposed bill will phase out tax credits after they hit 200,000 electric vehicles sold, which would make General Motors Co. and Tesla Inc. eligible again. It also will set a smaller credit for used EVs of up to $2,500.
UAW President Ray Curry spoke out in favor of the tax credit provision, saying it will go “a long way in supporting-good paying union jobs in the EV auto sector that President Biden has championed.”
The bill limits the EV credits to cars valued at no more than $55,000, and trucks priced at up to $74,000.
Toyota has promised to “fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers who can’t afford high-priced cars and trucks.”