{"id":28191,"date":"2021-11-05T09:20:15","date_gmt":"2021-11-05T13:20:15","guid":{"rendered":"https:\/\/henrypayne.com\/?p=28191"},"modified":"2021-11-05T09:20:15","modified_gmt":"2021-11-05T13:20:15","slug":"payne-how-congressional-ev-tax-credit-bills-discriminate-against-foreign-and-domestic-models","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2021\/11\/payne-how-congressional-ev-tax-credit-bills-discriminate-against-foreign-and-domestic-models","title":{"rendered":"Payne: How congressional EV tax credit bills discriminate against foreign and domestic models"},"content":{"rendered":"

As it tries to compel electric vehicle adoption with federal sweeteners, Congress is using tax credits to tip the scales to union-made EVs. Senate and House bills offer a whopping, $12,500 tax credit to purchase an EV \u2014\u00a0provided\u00a0it\u2019s Made-in-the-USA and Made-by-the-UAW.<\/p>\n

The twin bills, when merged in congressional reconciliation, say industry insiders, could complicate the emerging EV market for foreign and domestic automakers\u00a0alike.<\/p>\n

Under the House bill pushed by Rep. Dan Kildee, D-Flint Township, EV buyers would get a base credit of $4,000 or $7,500 \u2014 depending on battery size\u00a0\u2014 plus an additional $4,500 if the vehicle is built in the United States\u00a0by United Auto Workers\u00a0labor, and $500 if the battery is U.S.-made. That bill has been included in the draft of President Joe Biden’s social spending package that Democratic lawmakers are considering.<\/p>\n

The Senate bill, championed by Sen. Debbie Stabenow, D-Lansing, contains similar provisions. It calls for\u00a0$2,500 to go to U.S.-made EVs plus $2,500 if built by union workers, in addition to the $7,500 base credit.<\/p>\n

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The buyer of a $38,550 Mazda MX-30 EV, under the House language for example, would only receive a $4,000 tax credit since it is imported from Japan and has a smaller battery. Its Orion Assembly-made, UAW-assembled, $40,950 Chevrolet Bolt EUV competitor, on the other hand, would come with a $12,500 credit against the purchaser\u2019s April 15 tax bill.<\/p>\n

The federal subsidy would erase the Mazda\u2019s $2,400 price advantage and drop the favored Bolt EUV\u2019s sticker below $30,000.<\/p>\n

\u201cWe want a level playing field,\u201d said Dan Ryan, Mazda vice president for government and public affairs. \u201cIf government wants to spur EV adoption, it should give consumers as much choice as possible.\u201d<\/p>\n

The favorable tax credit would not just discriminate against foreign transplants, but also domestic brands. Ford’s Mexican-made Mustang Mach-E would not receive the UAW-Made and Made-in-America credits, and Tesla’s California-made EVs would not be eligible for the UAW-Made credit. Both would get the base $7,500 credit \u2014 until 2026, when the foreign-built Mach-E would lose that credit under the House bill.<\/p>\n

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\u201cThese bills get complicated,\u201d said Ed Kim, vice president\u00a0for industry analysis at Auto Pacific. \u201cThey are now meant, not just to incentivize EVs, but to incentivize the manufacture of UAW-built vehicles as well.\u201d<\/p>\n

Ford Motor Co.\u2019s Oakville, Ontario, assembly plant is undergoing a major conversion to produce five EVs starting in 2025\u00a0\u2014\u00a0but none would be eligible for the American-made congressional credit. Meanwhile, the luxurious Cadillac Lyriq EV \u2014\u00a0to be produced in General Motors Co.\u2019s Spring Hill, Tennessee, plant by the UAW next year \u2014 would\u00a0qualify for the full $12,500 credit.<\/p>\n

As will the GM-made Honda and Acura EVs coming down the Detroit automaker’s Spring Hill line, said Kim. Just down the road in Chattanooga, Honda competitor Volkswagen AG\u00a0would only qualify for the partial, Made-in-America credit because its plant is non-union.<\/p>\n

Despite the credit\u2019s complications for its North Americans plants, Ford has endorsed congressional\u00a0efforts. \u201cEV consumer incentives are key to accelerating the transition to a zero-emissions transportation future, and we appreciate Congressman Kildee and Senator Stabenow\u2019s leadership on this issue,\u201d said Ford president for the Americas, Kumar Galhotra,\u00a0in a statement<\/a>\u00a0on Kildee\u2019s website. \u201cThis legislation will help more Americans get into EVs, while at the same time supporting American manufacturing and union jobs.\u201d<\/p>\n