The fight about federal tax credits for buyers of electric vehicles is moving toward a climax as the Biden administration’s “Build Back Better” plan inches toward final votes in the U.S. Senate and House of Representatives.
The tax credits, as well as the money for expanding the nation’s EV charging network that is included a separate infrastructure bill, are part of the administration’s effort to fight climate change by reducing greenhouse gas emissions from the transportation sector by moving away from oil and gasoline to battery power.
However, there is language in the tax credit portion of the Biden plan giving special preferences — i.e. larger tax credits — to U.S.- and union-made vehicles. That provision, championed by Michigan Democrats Senator Debbie Stabenow and Rep. Dan Kildee, are a massive problem for some automakers.
Non-union automakers express outrage
Toyota took out a full-page ad in the print edition of The New York Times to attack the proposal, which has also been panned by other non-union automakers, most frequently on twitter by Tesla CEO Elon Musk. Both Toyota and Musk described the larger tax credits for union-made or UAW-made vehicles as unfair.
Volkswagen of America CEO Scott Keogh in a message to VW dealers and employees in the U.S. described the incentives package as discriminatory.
“The U.S. Congress is considering legislation that amends the current EV tax credit to discriminate against vehicles not built by UAW workers and not built in the U.S.,” Keogh said. “The proposal gives consumers who buy union-made vehicles an additional $4,500 and the full incentive would phase out in 2027 for imported EVs.
“No Audi vehicles would be eligible under these provisions after 2026 and the Chattanooga built ID.4 would be eligible for $7,500 to $8,000 — not the full $12,500 available to Detroit manufacturers.”
Kildee provision is pivotal
However, the Stabenow-Kildee provision enjoys plenty of support of its own. Kildee said —unsurprisingly — General Motors, Ford and Stellantis support the tax credit proposal as written as does the United Auto Workers.
The AFL-CIO, the Edison Electric Institute, The Sierra Club, The Natural Resources Defense Council, League of Conservation Voters, BlueGreen Alliance, American Lung Association and ITC Holdings, a major owner of electric power lines in the Midwest, have lined up in support of his proposal, Kildee said.
“More electric vehicles on our roads means fewer emissions, cleaner air, and a healthier future for our communities,” said Rep. Jimmy Gomez (D-California) “Congressman Kildee’s legislation and my bill, the Affordable EVs for Working Families Act, will accelerate our transition to electric vehicles by strengthening purchase incentives to give millions of Americans the opportunity to drive electric for the first time.”
UAW supports Biden agenda
UAW President Ray Curry said recently Congress needs to pass both the infrastructure bill and Build Back Better Act so President Joe Biden can sign them into law.
“For UAW members in the auto sector, the Stabenow-Kildee provision in the Build Back Better Act will create and preserve tens of thousands of UAW members’ jobs by including an electric vehicle tax credit that will lower the cost of an electric vehicle that is made in America by union workers by as much as $12,500. It would be a win for auto manufacturing workers,” Curry said.