Toyota, Honda oppose U.S. House electric vehicle tax plan

WASHINGTON -- Toyota Motor Corp. and Honda Motor Co. on Saturday sharply criticized a proposal by Democrats in the U.S. House of Representatives to give union-made electric vehicles in the United States an additional $4,500 tax incentive.

Toyota said in a statement that the plan unveiled late Friday discriminates "against American autoworkers based on their choice not to unionize."

The bill, set to be voted on Tuesday by the Democratic-led House Ways and Means Committee, would benefit Detroit's three automakers, which have union-represented auto plants.

In a statement, Honda called the bill "unfair" and said it "discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union. ... The Honda production associates in Alabama, Indiana and Ohio who will build our EVs deserve fair and equal treatment by Congress."

The proposal, estimated to cost $33 billion to $34 billion over 10 years, would boost to up to $12,500 the maximum tax credit for electric vehicles, up from the current $7,500. The $12,500 figure includes a $500 credit for using U.S.-produced batteries.

The proposal is a key part of Democratic President Joe Biden's goal to ensure EVs comprise at least 50 percent of U.S. vehicle sales by 2030 and boost American union jobs.

The bill, however, does away with phasing out automakers' tax credits after they hit 200,000 electric vehicles sold, which would make General Motors and Tesla Inc. eligible again. It would also create a new smaller credit for used EVs of up to $2,500.

GM, Ford Motor Co. and Stellantis, the parent of Chrysler, assemble their U.S.-made vehicles in plants represented by the United Auto Workers (UAW) union.

In contrast, foreign automakers operating in the United States as well as Tesla do not have unions representing assembly workers and many of them have fought efforts by the UAW to organize U.S. plants.

Tesla would be eligible for up to $8,000 credits under the bill.

UAW President Ray Curry said the tax credit provision "would go a long way in supporting-good paying union jobs in (the) EV auto sector that President Biden has championed."

The bill limits the EV credit to cars priced at no more than $55,000, while trucks could be priced up to $74,000.

In a statement Sunday, the American International Automobile Dealers Association said the union-focused provision is “more than insulting” to the 673,000 Americans employed by international nameplate dealerships and manufacturers.

“It’s a slap in the face for all American workers who don’t align with the Democratic worldview that every workplace should be unionized and that American tax dollars should contribute to that goal,” Cody Lusk, AIADA’s CEO, said in a statement Sunday. “International nameplate dealers and manufacturers will continue to refine EV technology and promote its acceptance in the United States. In the meantime, we only ask that the House Ways and Means committee stop playing politics with car sales.”

EV startup Rivian said the House’s proposed reform of the EV tax credit is a “step in the right direction, but risks confusing potential buyers.”

“Americans should not need an accounting degree to determine if they qualify for the tax credit,” James Chen, Rivian’s vice president of public policy and chief regulatory counsel, said in a statement Sunday. “Rivian supports a straightforward expansion without artificial limits to encourage EV adoption to as many households as possible.”  

Toyota added that it will also "fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers who can’t afford high-priced cars and trucks."

Audrey LaForest of Automotive News contributed to this report.