A proposal put forward in the Democrats’ $3.5 trillion social spending bill could parachute tax credits to Americans buying electric vehicles. However, some EV automakers aren’t jazzed about it.
The proposal in question would offer incentives of up to $12,500 for people buying EVs built by unionized automakers like Ford. EVs built by other automakers (where cars aren’t built by union-represented workers) would see their credits limited to just $7,500. As a result, the bill structurally favors “traditional automakers from Detroit,” according to Automotive News. Many of those traditional automakers employ workers represented by United Auto Workers (UAW), one of America’s largest unions.
Several non-unionized automakers have a bone to pick with the proposal. Toyota execs in 11 states wrote that they support an EV tax credit, but believe that Congress is expending limited resources on a tax credit which benefits “those wealthy enough to buy high-priced cars and trucks.” 💰 💰 Honda Motor voiced its frustration, saying the incentive “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union.”
Tesla CEO Elon Musk commented that the new proposal was “written by Ford/UAW lobbyists“ who benefit from the bill while building EVs in Mexico. Musk has formerly indicated that the UAW abandoned the Fremont factory Tesla bought years ago — one of a handful of quarrels he’s had with the auto union. UAW has not successfully organized workers at new-age automakers like Tesla, Rivian, or Lucid.
While it’s true that some titans of industry have actively (and maybe even illegally) prevented unions, UAW itself has had its own issues with corruption. And the decline of unions hasn’t helped. The Democrats’ proposal and bill still face enormous scrutiny in Congress. It’s not easy to know if this component of the bill will survive, but if it does, it would be a huge win for UAW and legacy automakers. 🚗 💨