Sign up
Subscribe to our Blind-Spot Monitor newsletters to catch up on all the top automotive stories of the week Subscribe to our Blind-Spot Monitor newsletters to catch up on all the top automotive stories of the week Sign up now>

Tesla, Toyota spar with Ford, UAW over new U.S. EV incentive program

"Not obvious how this serves American taxpayers" Elon Musk tweets of tax rebates for select electric cars

David Shepardson, Reuters
Sep 14, 2021  •  September 14, 2021  •  2 minute read  •  Join the conversation
U.S. President Joe Biden gives a thumbs-up to guests while driving a Jeep Rubicon 4xe at an event for clean cars and trucks, and signs an executive order on transforming the country’s auto fleet at the White House in Washington, U.S. August 5, 2021.
U.S. President Joe Biden gives a thumbs-up to guests while driving a Jeep Rubicon 4xe at an event for clean cars and trucks, and signs an executive order on transforming the country’s auto fleet at the White House in Washington, U.S. August 5, 2021. Photo by Jonathan Ernst /Reuters

Toyota and Tesla clashed with Ford and the United Auto Workers (UAW) union over a proposal by Democrats in the U.S. House to give union-made, U.S.-built electric vehicles an additional US$4,500 tax incentive.

Story continues below

In a letter to Congress, Toyota said the plan discriminates against nearly half of American autoworkers who do not belong to a union and called on lawmakers to reject giving “exorbitant tax breaks” to wealthy buyers of high-priced cars and trucks.

The bill, set to be taken up on Tuesday by the House Ways and Means Committee as part of a proposed US$3.5-trillion spending bill, would benefit Detroit’s Big Three automakers – General Motors, Ford and Stellantis, the parent of Chrysler – which assemble their U.S.-made vehicles in UAW-represented plants.

The proposal boosts the maximum tax credit for these electric vehicles to $12,500 – including a $500 credit for using U.S.-made batteries – from the current $7,500, which stays the same for all others. The bill also does away with phasing out tax credits after automakers hit 200,000 electric vehicles sold, which would make GM eligible again, along with Tesla, although Tesla would not receive the higher credit.

More On This Topic

  1. Biden aims to make half of U.S. new-car sales electrified by 2030

    Biden aims to make half of U.S. new-car sales electrified by 2030

  2. Biden plan calls for 0 billion in new EV consumer rebates

    Biden plan calls for 0 billion in new EV consumer rebates

Tesla and foreign automakers operating in the United States do not have unions representing assembly workers and many have fought UAW efforts to organize U.S. plants.

Tesla Chief Executive Elon Musk said on Twitter Sunday that the EV incentives were “written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers.” Ford builds its electric Mustang Mach-E in Mexico, although these vehicles would not qualify for the larger tax credit.

Story continues below

Asked to respond, Ford spokesman Mark Truby said Ford will build its EV F-150 Lightning in Michigan and all-electric E-Transit van in Kansas City, “with much more to come.”

The UAW did not comment on Musk’s tweet, but noted that most autoworkers globally were union represented. “American tax money should pay for products here and American workers deserve the same voice as every other autoworker in the world,” it said on its website.

Honda, which has auto plants in Alabama, Indiana and Ohio, said the EV incentive “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union.” Toyota does not currently build any full EVs in the United States but has plans to sell two new EVs in the U.S. next year.

Stellantis, meanwhile, praised the plan, saying it “spur the market by making electrified vehicles affordable for more Americans, which in turn will support well-paying, middle-class jobs.”

Trending