Honda and Toyota, which together have a production capacity of more than 3.5 million vehicles in the United States, have spoken out against a Democrat-supported electric vehicle subsidy proposal that prioritizes union-made automobiles.
The proposal, which was proposed as a portion of House Ways and Means Committee’s spending measure valued at $3.5 trillion, would enhance the existing maximum $7,500 available credit for battery-powered cars by $4,500 for those made at companies that employ union workers.
It would also include $500 for cars that utilize battery packs made in the United States at least 50% of the time, for a total credit of $12,500. The scheme would last for five years, after which a flat $7,500 credit for the American-made electric vehicles would be implemented.
“This is something we’d like to encourage. It propels American manufacturers to the forefront, which is precisely where we desire them, and it decreases emissions more quickly than any other program we could do, “Rep. Dan Kildee, a Democrat from Michigan, told Reuters.
Honda, Toyota, and several other foreign automakers produce vehicles in the United States using non-union labor.
“If Congress is genuine about tackling the climate catastrophe and ensuring that these vehicles are manufactured in the United States, it should handle all EVs produced by American auto workers equally and fairly. We encourage Congress to eliminate discriminatory wording from the budget reconciliation proposal that ties unionization to incentives. “In a statement, Honda added.
Toyota agreed with Honda, claiming the program discriminates “against the American autoworkers depending on their decision not to unionize,” and promising to “fight to focus public resources on getting all electrified cars affordable for the American consumers who can’t afford high-priced trucks and cars.”
Tesla, the sole major American manufacturer that does not employ union workers, has yet to respond to the plan. Still, Chief Executive Officer Elon Musk tweeted: “Because Ford/UAW makes their electric vehicle in Mexico, this is drafted by Ford/UAW lobbyists. It’s not clear how this benefits American taxpayers.”
The law also changes the subsidy from the tax credit to the point-of-sale discount. It eliminates the existing limit of 200,000 electric car sales for every automaker that triggers eligibility phase-out. Under the existing arrangement, General Motors and Tesla have used all their allotments, while Nissan, Ford, and Toyota are nearing their limits.
There would also be price ceilings ranging from $55,000 to $74,000 for vehicles and pickup trucks, as well as income caps of $400,000 for the individuals and $800,000 for all those filing jointly.