Automakers generally support President Biden's green energy plan, which would spend billions of government dollars on constructing charging stations across the country and expand incentives that lessen the cost of purchasing an EV. But they're sharply divided over a critical tax credit component of the proposal.
Under the legislation advanced by the House Ways and Means Committee last month, most EVs would qualify for a $7,500 tax credit. Though union-built EVs assembled in the U.S. would get an extra $4,500 in credits.
Just Ford Motor Co., General Motors Co., and Stellantis NV, Chrysler's parent company, would benefit from the extra incentive, as union workers assemble most of their EVs in U.S. plants. The proposal definitely leaves other automakers, including Tesla Inc., the country's leading EV manufacturer, at a $4,500 per vehicle disadvantage.
The provision has attracted outrage from car manufacturers that do not have unionized workforces, including Honda Motor Co. and Toyota Motor Corp., which wrecked the legislative language as "blatantly biased" and "discriminatory."
"If Congress is serious about addressing the climate crisis, as well as its goal to see these vehicles built in America, it should treat all EVs made by U.S. auto workers fairly and equally," Honda announced in a statement.
Tesla CEO Elon Musk, who has bitterly fought unionization attempts, further denounced the measure, staring at a recent Beverly Hills, Calif., conference that the Biden administration is "controlled by unions."
Over the past month, auto industry executives and trade organizations have mounted an all-out push to influence the final EV legislation that will be included in Democrats' multi trillion-dollar reconciliation package.
Autos Drive America, a trade group that represents most major foreign-owned automakers such as Honda, Toyota, and Volkswagen Group, is running TV advertisements in Washington, D.C., pressing lawmakers to deny the pro-union measure.
"Carmakers are racing to get more EVs on the road, but Congress's sweetheart deal for unions would take most of today's EVs off the table for many American families," the group's most recent ad tells viewers.
The Detroit-based UAW is fighting to protect the union provision introduced by Michigan lawmakers in the House and Senate. In a statement last week, UAW President Ray Curry said that the measure "will ensure that subsidies for electric vehicles go to good union jobs here in the U.S."
"We need these jobs of the future to be as good or better than the jobs they replace," he announced.