Honda, Toyota reject Democrats’ pro-union electric car subsidy plan

Honda and Toyota, which have a combined capacity to manufacture more than 3.5 million cars in the US, have come out against a Democrat-backed electric car subsidy proposal that favors union-built vehicles.

The plan, introduced Friday as part of the House Ways and Means Committee’s $3.5 trillion spending bill, adds up to the current maximum of $7,500 in credits available for battery-powered vehicles for those manufactured at plants that use union workers. would increase to $4,500.

It would also add $500 for vehicles that use battery packs produced with at least 50% US manufacturing, for a total potential credit of $12,500. The plan will be in effect for five years, followed by a $7,500 flat credit for American-made electric vehicles.

Michigan Democrat Rep. Dan Kildy told Reuters, “We want to encourage that. It puts American manufacturers in the lead, where we want them, and it reduces emissions faster than any other policy.” ” .

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HMC HONDA MOTOR CO., LTD. 30.95 +0.12 +0.41%
tm Toyota Motor Corp. 178.37 +2.07 +1.17%

Honda, Toyota and many other foreign automakers build vehicles in the US in factories that do not use union labor.

“If Congress is serious about its goal of addressing the climate crisis as well as seeing these vehicles manufactured in America, it must treat all EVs made by American auto workers fairly and equally. We ask Congress Incentives to remove discriminatory language urge removal of federalisation. Its budget reconciliation proposal,” Honda said in a statement.

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Toyota echoed Honda’s position, saying that the plan “does not discriminate against American autoworkers for unionizing based on their preferences” and “focus on taxpayer dollars to make all electrified vehicles accessible to American consumers.” Commits to fight to focus on those who can’t afford high priced cars and trucks.”

Tesla, the only major US automaker that does not use union labor, has yet to comment on the proposal.

The bill would also convert subsidies from tax credits to point-of-sale discounts and remove the existing cap of 200,000 electric vehicle sales per automaker that triggers the phase-out of their eligibility. Tesla and General Motors have exhausted their allocations under the current plan, while Nissan, Ford and Toyota are approaching their limits.

A price range will also be established for pickup from $55,000 for cars to $74,000, with an income limit of $400,000 for individuals and $800,000 for those filing jointly. Income limits will also be established.

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