Ford Motor Co and the United Auto Workers (UAW) are butting heads against Toyota Motor Corp and Tesla over tax breaks. House Democrats are proposing a $4,500 tax incentive for electric vehicles made in the USA and built by union workers. Ford and the UAW are very much for it, while Toyota and Tesla are not.
‘Exorbitant Tax Breaks’
As a result, Toyota sent a strongly-worded letter to Congress last Monday. It said that the proposal discriminates against non-union American auto workers. They also blasted the idea of Congress providing: exorbitant tax breaks” to rich buyers of expensive cars and trucks.
The House Ways and Means Committee is set to take up the proposed EV tax break on Tuesday. It’s part of the proposed $3.5 trillion spending bill proposed by President Joe Biden.
The plan benefits America’s Big Three manufacturers: Ford, General Motors, and Chrysler. The companies hire union workers and have UAW representation in all their plants.
Editor's Inflation Warning: "Investors are woefully unprepared for what may be a once-in-a-generation shift in the market"
The bill also proposes a new EV tax credit for commercial vehicles. It will also award a $2,500 credit for used EVs and a 15% credit for electric bicycles.
Tax Credit Increases From $7,500 to $12,500
Specifically, the proposal boosts the maximum tax credit for these electric vehicles from $7,500 to $12,500. It will now include a $500 credit for using locally-made batteries. The bill will also remove the 200,000 units sold ceiling for tax credit eligibility.
Both GM and Tesla will qualify for the tax breaks if this measure gets approval. However, Tesla will not benefit from the higher credit.
However, Toyota, Tesla, and other foreign automakers operating in the United States oppose the bill. They do not have union representation among their assembly line workers. Historically, both companies fought UAW efforts to bring unions to their plants.
Ford Will Build More EVs in the States
Tesla’s opposition, as voiced by CEO Elon Musk on Twitter, said that Ford/UAW lobbyists virtually wrote the EV incentives. He noted that Ford makes their electric cars in Mexico. “Not obvious how this serves American taxpayers,” he noted.
However, Ford spokesperson Mark Truby said that while Ford does make its Mustang Mach-E in Mexico, these vehicles do not qualify for the new tax credits.
In addition, he said that Ford will build its F-150 Lightning EV in Michigan. Ford will also build its all-electric E-Transit van in Kansas City. Other electric vehicles will come into local production soon.
Meanwhile, the UAW did not comment on Musk’s tweet. Officials noted that most auto workers worldwide have union representation. “American tax money should pay for products here and American workers deserve the same voice as every other autoworker in the world,” the UAW said on its website.
Stellantis, the company that owns the Chrysler brand, supported the House proposal. It said that the tax breaks will “spur the market by making electrified vehicles affordable for more Americans, which in turn will support well-paying, middle-class jobs.”
Honda Sides WithToyota and Tesla
Honda Motor, which joined Tesla and Toyota, has auto plants in Alabama, Indiana, and Ohio. The EV incentive “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union,” it said.
Meanwhile, Toyota has no full EVs assembled in the United States. The company does have plans to sell two new EV models in the United States beginning next year.
Watch the Torque News video reporting about Tesla CEO Elon Musk’s anger at proposed EV tax breaks:
Do you agree with providing additional tax breaks for electric vehicles made by companies that hire union workers? Will this make you buy an electric vehicle from Ford, GM, or Chrysler instead of Toyota, Tesla, or Honda?
Let us know what you think. Share your thoughts below.
Attention ALL Capitalist Subscribers: Elon Musk, Mark Cuban, and Richard Branson reveal how $25 gets you into one technology set to grow 2,000X BIGGER than Bitcoin.