American Automakers Criticize New EV Bill Sever

American Automakers Criticize New EV Bill

Several American automakers are displeased with a proposed electric vehicle (“EV”) bill that would make unionized automakers eligible for extra electric vehicle subsidies. A few days ago, the Democrats proposed an updated version of the current EV incentives program that would remove the limit on the number of vehicles a single automaker can sell with subsidies and introduce a higher payout of up to $12,500, with unionized automakers that produce electric vehicles and trucks locally being eligible for an additional $4,500 subsidy. The bill has been roundly criticized by Tesla, Toyota Motors and other auto companies that will miss out on the extra cash.

Executives from these disgruntled automakers say that the new $4,500 incentive for EVs assembled in a union factory is biased and unfairly favors General Motors, Stelantis (formerly Fiat Chrysler) and Ford Motor. Also known as the Detroit 3, these three automakers employ hourly workers who are represented by the United Auto Workers union, and if the proposed bill were to pass, all the electric vehicles they manufacture in local plants would be eligible for the additional $4,500 subsidy. It is currently being discussed by the House Ways and Means Committee as part of a $3.5 trillion spending bill.

Soon after the details of the proposed electric vehicle incentives bill were made public, Tesla CEO Elon Musk claimed on Twitter that it was “written by Ford/UAW lobbyists” and that it is not apparent how it would “serve American taxpayers.” He was likely referring to the fact that the Mustang Mach E, Ford’s only all-electric car, is manufactured in Mexico. The bill has also met opposition from Hyundai, Honda, Kia and Nissan, that claim that the union-based incentive is biased and unfair. All of these automakers do not have unionized employees.

As such, these companies would only qualify for the current $7,500 tax credit and an additional $500 if they use locally made EV batteries. And thanks to a provision that removes the 200,000 vehicles cap which meant that automakers could not take advantage of the subsidy if they sold more than 200,000 EVs, early entrants into the EV space such as Tesla and General Motors will once again qualify for the $7,500 tax credit. However, the fact that they do not qualify for the extra $4,500 because their employees are not represented by a workers’ union is a bone of contention.

On its website, Honda stated that if Congress is serious about addressing global warming, it should treat all locally built electric vehicles equally. Manufacturing executives from Toyota said that discriminating against American autoworkers because they chose not to unionize is “unfair and wrong.”

The EV landscape is fluid and is evolving rapidly, so it is to be expected that sector players such as Tesla and others involved in the distribution chain, including DSG Global Inc. (OTCQB: DSGT), will pay particular attention to any policy announcements made by the U.S. federal government and other authorities.

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