Automobile

Union-built EV tax credit provision faces hurdle

For Manchin — one of the Democratic Party’s key swing votes, who has argued against the $3.5 trillion reconciliation price tag — concerns might include transition costs for people in the fossil fuel industry, such as coal miners, as the U.S. moves toward greater electrification and a greener grid.

“What does it do for the constituents in West Virginia?” Dziczek said. “Coal production and Toyota engines and transmissions are going to be key on his mind.”

Sen. Shelley Moore Capito, Manchin’s West Virginia Republican counterpart, said the Democrats’ EV tax credits are “incredibly unfair” and would “disadvantage companies making investments in the United States.”

The tax-and-spending bill — opposed by Republicans — can pass in the Senate with a simple majority vote, or 50 senators plus the vice president.

While Manchin might stymie movement on the bill, other lawmakers could put down speed bumps on the EV tax credit proposal, especially the union-built provision.

Rep. Terri Sewell, an Alabama Democrat, said she is working with Kildee to “level the playing field” for EV tax credits.

“This shouldn’t be a choice between unionized vs. un-unionized workers,” Sewell said last week during the committee’s markup.

Alabama employs 1,400 nonunion workers at Toyota’s engine plant in Huntsville — a $1.17 billion investment, according to the Japan Automobile Manufacturers Association. In total, Sewell’s state employs more than 13,000 nonunion auto workers across Mercedes-Benz, Hyundai, Honda and Toyota factories, she said.

Republicans on the House Ways and Means Committee argue the EV tax credit proposal subsidizes the wealthy to buy vehicles that most Americans can’t afford.

“It is hard to imagine how giving a tax break of $12,500 to someone buying a $74,000 electric vehicle — nearly the median home price in some counties in my district — is a way to help working class workers,” Rep. Carol Miller, R-W. Va., said in a statement to Automotive News.

Rep. Drew Ferguson, a Georgia Republican who introduced a failed amendment to lower the maximum income threshold for the EV tax credits, also argued that “pitting Americans in one state versus another through a direct subsidy is wrong.”

Automakers in Ferguson’s state include Kia and Honda.

Kildee told reporters last week there is a “possibility” of broadening the proposed EV tax credits when the full House takes up the legislation.

“If we can find language that helps us identify another way to reward companies that are ‘very high labor standard’ companies, we’re open to that,” he said.

Both Kildee and Sen. Debbie Stabenow — a Michigan Democrat who led an earlier proposal in the Senate that also would tie additional EV tax credits to vehicles assembled in unionized U.S. factories — said they’re “not going to apologize” for prioritizing American union workers.

Ford Motor Co., General Motors and Stellantis — whose workers are represented by the UAW — praised Kildee’s proposal last week, while others called for broader incentives.

In a statement to Automotive News, Volkswagen Group of America said “providing oversized incentives to a select few domestic manufacturers and eliminating incentives for all imports in just a few years puts us at a significant, competitive disadvantage.”

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