Toyota Motor Corporation and Honda Motor Co. have criticized the Democratic Party’s proposal in the US House of Representatives to give an additional $4,500 tax break incentive for electric vehicles manufactured in any US union.
Because they own consortium plants in Detroit, the three auto giants GM, Fiat Chrysler and Ford Motor, will benefit from the bill, which will be voted on Tuesday by the Roads and Transportation Committee as part of a proposed $3.5 trillion spending bill.
The proposed tax incentives, which will cost an estimated $33-34 billion over 10 years, will raise the maximum tax credits for electric vehicles to $12,500 from $7,500, and will also include an exemption of about $500 for the use of US-made batteries, where the proposal is an essential part of the goals of US Democratic President Joe Biden, who plans to reach the proportion of electric vehicle sales to 50% of total sales by 2030, in addition to revitalizing the work of American unions.
However, the tax credits bill would be void for any auto company after it sold more than 200,000 electric vehicles, leaving companies like General Motors and Tesla to be taxed again, and the proposed law would add a smaller tax credit of $2,500 for used electric vehicles.
General Motors, Ford and Stellants, which is the parent company of Chrysler, assemble their American-made cars in factories represented by the Union of Auto Workers (UAW), while on the other hand, in addition to Tesla, foreign automakers operating in the United States do not have any union representing the assembly workers they work for, and many of these companies are said to have fought against the UAW’s efforts to regulate American laboratories.