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Honda and Toyota criticize Democrats’ proposed tax credit for union-made electric vehicles

Honda and Toyota criticize Democrats’ proposed tax credit for union-made electric vehicles


The proposal would provide $12,500 credit for US union-made EVs

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An electric vehicle plugged into a charging station. A new proposal would boost the tax credit for US union-made EVs.

Honda and Toyota are criticizing a new proposal by Democratic lawmakers to expand tax credits for electric vehicles, saying it discriminates against non-union auto workers, Reuters reported. Under the proposal, US union-made electric vehicles would qualify for a tax credit of $12,500 per vehicle, while keeping a credit for most other EVs at $7,500. The proposal would significantly favor Big Three US automakers GM, Ford, and Fiat Chrysler over non-union companies such as Tesla and the Japanese carmakers, both of which have plants in the US.

US Rep. Dan Kildee (D-Michigan) told Reuters “We want to incentivize this. It puts American manufacturers in the lead, which is where we want them, and it reduces emissions faster than any other policy that we could put in place.” President Biden has said he wants electric vehicles to represent at least 50 percent of vehicle sales in the US by the year 2030.

Honda said in a statement that the bill was unfair, and that it “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union.” The company noted that Honda has plants in Alabama, Indiana, and Ohio that build EVs, and said those workers “deserve fair and equal treatment by Congress.”

Toyota told Reuters that the bill as written discriminates ““against American autoworkers based on their choice not to unionize,” and added it planned to “fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers who can’t afford high-priced cars and trucks.”

The proposal is scheduled for a vote before the House Ways and Means committee on Tuesday, part of a proposed $3.5 trillion spending bill. It’s likely to face opposition in the Senate.