Toyota Motor Corp (7203.T) and Honda Motor Co (7267.T) slammed a proposal by Democrats in the United States House of Representatives to give union-made electric vehicles in the United States an additional $4,500 tax break on Saturday.
Toyota said in a statement that the plan unveiled late Friday discriminates “against American autoworkers based on their choice not to unionize.”
The bill, which is due to be voted on by the Democratic-led House Ways and Means Committee on Tuesday as part of a proposed $3.5 trillion spending bill, would benefit Detroit’s Big Three automakers, which employ unionized workers.
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, which is expected to cost $33 billion to $34 billion over ten years, would increase the maximum tax credit for electric vehicles from $7,500 to $12,500. The $12,500 amount includes a $500 credit for utilizing batteries made in the United States.
The idea is a significant aspect of Democratic Vice President Joe Biden’s ambition to ensure that electric vehicles account for at least 50% of all vehicle sales jobs in the United States by 2030, boosting American union employment.
On the other hand, the plan eliminates the phasing out of automakers’ tax credits once they sell 200,000 electric vehicles, making General Motors Co (GM.N) and Tesla Inc (TSLA.O) eligible once more. It would also offer a new $2,500 credit for old electric vehicles.
The United Auto Workers (UAW) union represents GM, Ford Motor Company (F.N), and Stellantis NV (STLA.MI), the parent company of Chrysler, in the assembly of its automobiles built in the United States.
Foreign automakers operating in the United States, like Tesla, do not have unions representing assembly workers, and several of them have battled the UAW’s efforts to organize U.S. operations.
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. Toyota added it will “fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers who can’t afford high-priced cars and trucks.”