There could be leeway in the controversial EV incentive plan, says the congressman
The US House of Representatives Ways & Means Committee has approved a $ 3.5 trillion spending package that could bring in up to $ 12,500 in tax credits for EV buyers – but the final incentive program could ease a proposal which would reserve up to $ 5,000 for these electric vehicles, special offers for drivers buying battery electric cars built by union workers in the United States.
In an exclusive conversation, Michigan House Democrat Dan Kildee told TheDetroitBureau.com he was open to a compromise that could include Canada-built vehicles as well as BEVs made by US non-union automakers like Toyota, where “workers” are treated fairly and well paid. “Kildee said, however, that he sees no place to include vehicles assembled in Mexico.
“We are still working on it,” said Kildee of the “Made in America” rule that he had worked out with the Democratic Senator from Michigan, Debbie Stabenow.
Conditions of Provision
The agreement in its current form would expand the current $ 7,500 federal tax credits for buyers of qualified battery electric vehicles and plug-in hybrids. Among other things, this would abolish the 200,000 vehicle sales threshold for individual manufacturers, which would expire the incentives if it is reached. General Motors and Tesla have already exceeded that limit, and Nissan will hit that number.
While this step has widespread support, the other provisions of the Kildee / Stabenow proposal have given rise to heated controversy. For one, they would add an additional $ 2,000 for vehicles that were specially assembled in the United States and $ 500 for vehicles that use American-made battery packs. Then buyers could qualify for an additional $ 2,500 if the vehicle was built by union workers.
These clauses would severely limit which vehicles could receive the maximum return of $ 12,500, as many new electric vehicles are planned from Canada and Mexico, as well as Europe, South Korea, Japan and China. Now only the Detroit Big Three automakers operate General Motors, Ford, and Stellantis union factories.
“That doesn’t seem fair,” Johan de Nysschen, Volkswagen Group of America’s chief operating officer, told TheDetroitBureau.com this week.
For his part, De Nysschen said Congress should at least cover vehicles made in the three countries that make up the USMCA, NAFTA’s successor. VW adapted its regional production plans to the updated trade agreement. There are currently plans to import the ID.Buzz, an all-electric successor to the legendary Microbus, from a plant in Puebla, Mexico.
Honda, meanwhile, said the Made in America provision “discriminates among electric vehicles made by hard-working American auto workers simply on whether or not they are unionized.”
Toyota has also spoken out strongly against the Kildee / Stabenow provision.
Changes are possible
When asked if he could foresee changes to the plan, Kildee said he was a little flexible and was considering other suggestions.
This could bring in electric vehicles made in Canada, among other things. Car factories north of the border are mostly represented by Unifor, the automotive equivalent of the United Auto Workers union, Kildee said as he began a tour of Ford Motor Co.’s new Electric Vehicle Center in Dearborn, Michigan on Thursday.
Kildee said he spoke with Congressman Terri Sewell about the possibility of extending the provision to non-union companies. The Republican District in Alabama includes a new Toyota plant. Most of the foreign-owned auto assembly plants in the United States are located in the southern states, which often have right to work laws.
But the Michigan Democrat showed no flexibility when asked to include Mexico in the incentive program. This country is “so far from having real unions” that offer good wages and benefits and real employee representation, he stressed that “I don’t know how they can get into the Made in America proposal”.
Other objections were raised to the idea of increasing incentives for electric vehicles. West Virginia Republican Congresswoman Carol Miller tweeted that “it’s hard to imagine that someone who buys a $ 74,000 electric vehicle would give a tax break of $ 12,500 to help working class workers” .
A proposal that would have removed EV incentives for buyers making more than $ 75,000 a year – or $ 150,000 for couples – was rejected by the Ways & Means Committee.
Kildee said he believes a version of his and Stabenov’s proposal will eventually be approved by the entire House as well as the Senate. It would then have to be signed by President Joe Biden, himself a strong supporter of EV. However, Biden has also shown keen interest in rewarding U.S. automakers in a new incentive plan, especially those with union workers.
“What do environmental groups, car manufacturers and workers have in common? They all support my bill to expand electric vehicle production in the US to create well-paying jobs and reduce emissions, ”Kildee said in a tweet.