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Foreign automakers ask U.S. House Democrats to reject union EV tax credit

·2 min read
Employees walk at the Toyota Motor Corp new plant in Mexico's central state of Guanajuato

By David Shepardson

WASHINGTON (Reuters) - A group of 12 major foreign automakers, including Toyota Motor Corp, Volkswagen AG, Hyundai Motor Co and Nissan Motor Co, urged U.S. House of Representatives Democrats to reject a proposed $4,500 tax incentive for U.S-made electric vehicles by union workers.

A House panel this month approved legislation to boost EV credits to up to $12,500 per vehicle, including $4,500 for union-made vehicles and $500 for U.S.-made batteries.

The U.S. units of foreign automakers said in a letter sent to House Speaker Nancy Pelosi and other Democrats on Thursday that the proposal "would unfairly disadvantage American workers who have chosen not to join a union and produce more than half of all vehicles in the United States and the vast majority of American-made EVs."

Others signatories include Honda, BMW, Kia, Mazda, Daimler AG's Mercedes-Benz, Subaru and Volvo Cars which is owned by Geely.

Late Thursday, six Democratic lawmakers who are co-chairs of the House labor caucus led by Representative Thomas Suozzi, urged Pelosi to retain the $4,500 incentive for union-built EVs.

"Every foreign-owned automotive manufacturer employs a union workforce in their home country, but those same companies consistently choose to invest in right-to-work states that are hostile to collective bargaining agreements," they wrote.

United Auto Workers (UAW) President Ray Curry said Thursday by ensuring "taxpayer funding goes to domestic auto and battery assembly, and to make sure that these jobs are good paying union scale jobs we protect our future."

Curry added "these jobs of the future that replace traditional engine jobs need to provide the same middle class wages and benefits that built our modern economy."

The tax credits, which are part of proposed $3.5 trillion spending bill, would cost $15.6 billion over 10 years and disproportionately benefit Detroit's Big Three automakers - General Motors, Ford Motor Co and Stellantis NV, the parent of Chrysler - which assemble their U.S.-made vehicles in UAW-represented plants.

The EV proposal also does away with phasing out tax credits after automakers hit 200,000 electric vehicles sold, which would make GM eligible again, along with Tesla Inc, although Tesla would not receive the $4,500 credit.

Tesla and foreign automakers do not have unions representing assembly workers in the United States and many have fought UAW efforts to organize U.S. plants.

Tesla Chief Executive Elon Musk suggested on Twitter this month the EV proposal was "written by Ford/UAW lobbyists... Not obvious how this serves American taxpayers."

(Reporting by David Shepardson; Editing by Leslie Adler & Simon Cameron-Moore)

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