Tesla, Toyota, and other Automakers Slam $4,500 EV Tax Incentive

Electric car maker Tesla as well as other automakers like Toyota and Honda have criticized a $4,500 EV tax incentive for union-made vehicles.

The proposed $12,500 electric vehicle tax incentive includes extra cash for union-made cars and trucks produced in the U.S.

According to the carmakers, the $4,500 incentive for vehicles assembled in a union plant unfairly favor General Motors, Ford and Stellantis.

The EV incentive package was introduced by the House Ways and Means Committee as part of a proposed $3.5 trillion spending bill.

The incentives include a current $7,500 tax credit to purchase a plug-in electric vehicle as well as $500 if the vehicle’s battery is made in the U.S.

The bill also removes a 200,000-vehicle phase-out of the credit. Buyers of EVs produced by unionized workers in the U.S. would be eligible for an additional $4,500 in tax credits, bringing the total incentives to $12,500.

“This is written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers,” Musk wrote on his Twitter on Sunday night.

Hyundai, Kia, Honda and Nissan also oppose the bill, citing it as unfair and biased.

Toyota described the bill as “unfair” and “wrong.”

“The current Ways and Means Committee draft makes the objective of accelerating the deployment of electrified vehicles secondary by discriminating against American autoworkers based on their choice not to unionize,” Toyota manufacturing executives said in a letter Monday to the chairs of the committee. “This is unfair, it is wrong, and we ask you to reject this blatantly biased proposal.”

Honda wrote on its website: “If Congress is serious about addressing the climate crisis, as well as its goal to see these vehicles built in America, it should treat all EVs made by U.S. auto workers fairly and equally. We urge Congress to remove discriminatory language tying unionization to incentives from its budget reconciliation proposal.”

“This legislation will help more Americans get into EVs, while at the same time supporting American manufacturing and union jobs,” Kumar Galhotra, Ford President of the Americas and international markets, said in a statement.

The proposed EV credits would last for 10 years, allowing consumers to deduct the value of the credit from the sales price at the time of purchase, according to Reuters.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.