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Toyota, Honda critical of US House electric vehicle tax plan

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Toyota Motor and Honda Motor on Saturday opposed a proposal by Democrats in the US House of Representatives to give union-made electric vehicles in the United States an additional US$4,500 tax incentive.

Toyota said in a statement that the plan unveiled late Friday discriminates “against American autoworkers based on their choice not to unionize”.

The Bill, set to be voted on Tuesday by the Democratic-led House Ways and Means Committee as part of a proposed US$3.5 trillion spending bill, would benefit Detroit’s Big Three automakers, which have union-represented auto plants.

The proposal is a key part of Democratic President Joe Biden’s goal to ensure EVs comprise at least 50per cent of US vehicle sales by 2030 and boost American union jobs.

In a statement, Honda called the Bill “unfair” and said it “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union. … The Honda production associates in Alabama, Indiana, and Ohio who will build our EVs deserve fair and equal treatment by Congress.”

The proposal, estimated to cost US$33 billion to US$34 billion over 10 years, would boost to up to US$12,500 the maximum tax credit for electric vehicles, up from the current US$7,500. The US$12,500 figure includes a US$500 credit for using U.S.-produced batteries.

The Bill, however, does away with phasing out automakers’ tax credits after they hit 200,000 electric vehicles sold, which would make General Motors Co and Tesla Inc eligible again. It would also create a new smaller credit for used EVs of up to US$2,500.

GM, Ford Motor, and Stellantis, the parent of Chrysler, assemble their US-made vehicles in plants represented by the United Auto Workers (UAW) union. In contrast, foreign automakers operating in the United States, as well as Tesla, do not have unions representing assembly workers and many of them have fought efforts by the UAW to organize US plants.

Tesla would be eligible for up to US$8,000 credits under the Bill.

UAW president Ray Curry said the tax credit provision “would go a long way in supporting good-paying union jobs in (the) EV auto sector that President Biden has championed”.

The Bill limits the EV credit to cars priced at no more than US$55,000, while trucks could be priced up to US$74,000.

Toyota added it will “fight to focus taxpayer dollars on making all electrified vehicles accessible for American consumers who can’t afford high-priced cars and trucks”.

The United States EV market is almost singlehandedly being carried by the success of the Tesla Model 3 – alone responsible for almost half of all EV sales.

Off late all major auto giants have heavily invested in E.V’s as the U.S. aims that one of every six cars running will be electric by 2025.

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