Honda criticizes Senate proposal tying EV tax credits to union workers

WASHINGTON — American Honda Motor Co. is criticizing a proposal in Congress that would tie additional EV tax credits for consumers to vehicles assembled in unionized U.S. factories.

The legislation — dubbed the Clean Energy for America Act — was advanced by the Senate Finance Committee in May and includes a provision led by Democratic Sen. Debbie Stabenow of Michigan that would allow car buyers to receive as much as $12,500 for EVs assembled by union workers at U.S. factories.

In a statement Thursday, Honda called the proposal unfair and discriminatory, arguing that favoring EVs built by union workers will limit consumer choice.

“Our production associates in Alabama, Georgia, Indiana and Ohio deserve fair treatment from Congress and should not be penalized for their choice of a workplace,” Jennifer Thomas, Honda’s vice president and business unit leader of corporate affairs, said in a statement.

“By providing fair and equitable treatment for all American auto workers who build EVs and by equally valuing their contributions, we can accelerate our shared environmental goal of achieving widespread EV deployment.”

The Japanese automaker said it is committed to increasing its sales of battery-electric and fuel cell vehicles from 40 percent in 2030 to 100 percent by 2040.

Autos Drive America, which represents the U.S. operations of international automakers, told Automotive News in July that the Senate’s proposed tax incentives are unfair for American auto workers who have chosen not to join a union.

The auto trade association did not immediately respond to a request for comment Friday.

The UAW has praised the Stabenow proposal, arguing that it provides additional benefits and incentives and doesn’t prevent automakers from selling any vehicles.

President Joe Biden — who backs the creation of “good-paying union jobs” as the auto industry and federal government work together to accelerate the adoption of EVs in the U.S. and boost domestic manufacturing — referred to the Stabenow proposal in remarks last week.

The president has set a nonbinding target to make half of all new vehicles sold in 2030 emissions-free, which he said will require support for consumers who are purchasing EVs.

“That means purchasing incentives for consumers to buy clean vehicles — union-made right here in America — like the ones championed by Debbie Stabenow and Ron Wyden in the Senate, which provides $7,500 basic credit, $2,500 credit for vehicles made in America and an additional $2,500 credit for union-made vehicles,” Biden said.

The Alliance for Automotive Innovation, which represents most major U.S. automakers including Ford Motor Co., General Motors, Honda, Toyota and Volkswagen, has repeatedly called for supply-and-demand policy approaches that bring together all stakeholders as well as providing broad-based consumer incentives at the federal and state levels.

In a statement last month to Automotive News, Volkswagen said it supports incentives that “do not favor one automaker over another.”

Battle will escalate

The debate over EV tax credits is likely to escalate as Congress turns to the Biden administration’s $3.5 trillion budget resolution.

The Senate on Wednesday voted 51-48 for a nonbinding amendment to the budget resolution that would prevent people who make more than $100,000 a year from claiming EV tax credits.

The amendment, which was proposed by Republican Sen. Deb Fischer of Nebraska, also would end tax credits for EVs that cost more than $40,000. Three Democrats — Joe Manchin of West Virginia, Mark Kelly of Arizona and Kyrsten Sinema of Arizona — voted for the amendment. Marsha Blackburn of Tennessee was the only Republican senator to vote against it.

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