Toyota Motor Corp and Honda Motor Co have vehemently opposed the proposal to give union-made electric vehicles in the U.S. an additional $4,500 tax incentive.
What Happened: The bill, proposed by the Democrats in the U.S. House of Representatives, is set to be voted on Tuesday by the Democratic-led House Ways and Means Committee.
The bill, which is part of the $3.5 trillion spending proposal, would benefit Detroit’s Big Three automakers, which have union-represented auto plants, according to Reuters.
Japan’s largest automaker Toyota says the proposed plan discriminates “against American autoworkers based on their choice not to unionize.” 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.”
Honda has said that the bill was unfair and that it “discriminates among EVs made by hard-working American autoworkers 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.”
Why It Matters: Under the new proposal, U.S. union-made electric vehicles would qualify for a tax credit of $12,500 per vehicle while keeping credit for most other EVs at $7,500.
The $12,500 figure includes a $500 credit for using U.S.-produced batteries. The proposal would cost up to $34 billion over ten years.
The proposal would significantly favor Big Three U.S. automakers General Motors Company, Ford Motor Company (NYSE: F), and Fiat Chrysler over non-union companies such as Tesla and the Japanese carmakers, both of which have plants in the U.S.
U.S. Rep. Dan Kildee (D-Michigan) said that “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.”