Author: Vineeth Joel Patel
Recently, Democrats in Congress introduced a new bill that would significantly increase federal tax credits for an electric vehicle. The bill is part of President Joe Biden’s $ 3.5 trillion spending bill and would help drive the adoption of electric vehicles in the country. The bill provides a plan for consumers to take advantage of a federal electric vehicle tax credit of $ 12,500, but only for electric cars assembled in the United States by employees covered by a union. For Toyota, Honda and Tesla, that means their vehicles are excluded from the list.
The union question
The whole “union” clause is what eats away at Toyota and Honda. This probably upsets Tesla, but since the automaker doesn’t have a PR department, there’s no way of knowing what they’re thinking. Since Toyota and Honda have PR teams, they are more than happy to share their thoughts on the proposed bill and neither automaker is happy with it.
According to Reuters, Toyota said the bill discriminated “against American auto workers because of their choice not to unionize” in a statement. In a statement, Honda said the bill was “unfair” and said it “discriminates between electric vehicles made by hard-working American auto workers simply on the basis of their union membership. … Honda’s production associates in Alabama, Indiana and Ohio who build our electric vehicles deserve fair and equal treatment from Congress. ”
The bill separates the automakers into two clear groups: some with unions and others without. General Motors, Ford and Stellantis are all silent up front, as the factories in which their vehicles are built are represented by the United Auto Workers union. Honda, Toyota and Tesla employees are not represented by a union. While electric vehicles from the three US automakers are eligible for the total tax credit of $ 12,500 under the new bill, those from Tesla will be eligible for up to $ 8,000.
The bill concerns the future
Considering how unions work to help improve the lives of workers by helping them achieve higher wages, improved working hours and better working conditions, we believe that unions are a good thing for employees in the automobile industry. The UAW, however, was criticized a few years ago for an embezzlement scheme. So while employees deserve to be part of a union, there is a decision as to whether the UAW is the right union for all automakers. Reuters points out that Tesla and foreign automakers have fought UAW’s efforts to organize unions at its factories in the United States
UAW President Ray Curry understandably sees the bill as a good thing, saying it “would go a long way to supporting well-paying union jobs in (the) EV auto industry that President Biden has championed.”
Toyota also said it “will fight to focus taxpayer dollars on making all electrified vehicles available to American consumers who cannot afford expensive cars and trucks.”
While we understand why Toyota and Honda are upset, they are two automakers that have been slow to come up with all-electric vehicles. With the decision to drop the Clarity Fuel Cell and Clarity Plug-in Hybrid models earlier this year, Honda does not sell electric or plug-in hybrid vehicles in the United States. Toyota, on the other hand, has quite a few hybrids and PHEVs – and even a fuel cell vehicle with the Mirai – but doesn’t have an all-electric option on sale. Both automakers are looking at electric vehicles, so the new bill would impact their popularity with American consumers.