Biden’s push for electric vehicles includes tax credit favoring union factories over non-union plant
President Biden‘s alliance with labor unions was on display on Wednesday with a proposal favoring union shops in his push for electric vehicles, snubbing Tesla and other non-union plants while promoting his infrastructure programs and offering extra federal subsidies only for cars assembled at union factories.
Speaking Wednesday on the floor of the General Motors “Factory Zero” electric-vehicle facility in Detroit, Mr. Biden emphasized his close ties with unions. He also touted how the $1.2 trillion infrastructure bill he signed into law this week would benefit labor, one of his biggest backers.
“We are going to kick-start batteries, materials and parts production and recycling, boosting the manufacturing of clean vehicles with new loans and new tax credits,” Mr. Biden said, “creating new purchase incentives for consumers to buy American-made, union-made clean vehicles.”
Mr. Biden hailed a proposed tax credit that would give automakers with union workers a leg up in the rapidly growing electric-vehicle market. The president says the proposal will benefit both the environment and blue-collar workers by rewarding union shops for transitioning to electric vehicles.
But automakers with non-union facilities and lawmakers from states where those plants are located are crying foul. They say it’s a reward to unions for supporting Mr. Biden during the 2020 election at the expense of non-union workers.
“The union bosses are the big bankrollers of the Democratic Party,” Sen. Bill Hagerty, Tennessee Republican, told The Washington Times. “Democrats will sacrifice jobs, they will sacrifice the economy and they will even sacrifice their climate goals to pay off their union bosses.”
At issue is a proposal tucked inside Mr. Biden’s massive $1.8 trillion social welfare and climate bill, set for a House vote this week. If enacted, the provision would provide a $7,500 tax credit for consumers who purchase electric vehicles through 2026.
But car buyers would qualify for an additional tax credit of $4,500 if they purchase a vehicle manufactured at a U.S. plant that operates under a union-negotiated bargaining agreement.
Only auto plants owned by General Motors, Ford Motor Co. and Stellantis NV would currently qualify for the additional tax incentive. That would not cover a majority of the electric vehicles on the road today.
It would also disadvantage non-union automobile manufacturers like Toyota and Tesla.
Tennessee is home to several non-union automobile plants, including Volkswagen’s ID.4 factor in Chattanooga. If the tax incentive is enacted, Mr. Hagerty said, it would harm workers in Tennessee, a right-to-work state.
“This is an incentive to move production to a unionized plant,” he said. “It makes it harder for us to attract the next electric vehicle plant in Tennessee.”
Some in Mr. Biden’s own party have also fumed over the extra $4,500 tax credit.
Sen. Joe Manchin III, West Virginia Democrat, is a centrist who has threatened to block Mr. Biden’s massive spending bill. In an interview with Automotive News, Mr. Manchin said incentivizing the purchase of electric vehicles from union shops would be “un-American” and “wrong.”
“We should not use everyone’s tax dollars to pick winners and losers,” Mr. Manchin told the paper, an auto industry trade publication.
White House deputy press secretary Christopher Meagher defended the tax incentive, saying it will provide workers with good jobs, good wages and good benefits.
“There’s a history — a long history of using tax credits to incentivize choices, and that’s true here,” Mr. Meagher told reporters. “They’ll lower the cost of EVs by $12,500 for a middle-class family. They’ll bolster domestic manufacturing supplies across the country. And they’ll position America to outcompete the world when it comes to EVs.”
When asked why the administration was incentivizing General Motors workers over employees at non-union plants, Mr. Meagher again said it was about creating jobs.
“A big part of the president’s climate strategy is about jobs,” he said. “And he believes that you can do both: You can move forward in pushing an economy that will think about the impact on climate while also producing jobs and — and creating good-paying union jobs to make those goals, to make those EV plugins around the country.”
Still, non-union automakers say they employ tens of thousands of U.S. workers and should not be unfairly disincentivized.
Tesla Chief Executive Elon Musk wrote on Twitter that Mr. Biden was a “puppet” for the United Autoworkers Association, the massive union that plays a major role in the liberal wing of the Democratic Party.
Toyota took out a full-page ad in national newspapers urging lawmakers not to “play politics with the environment.”
It’s not the first time Mr. Musk has sparred with Mr. Biden. In August, the White House snubbed Mr. Musk at a meeting on electric vehicles with United Auto Workers officials and automobile executives.
“Didn’t mention Tesla once, and praised GM and Ford for leading the EV revolution. Does this sound maybe a little biased or something,” Mr. Musk said in August.