Toyota hits union-made electric vehicle credit proposal with new ad

Source: By Riley Beggin, The Detroit News • Posted: Wednesday, November 3, 2021

Washington — Toyota Motor Corp. is running ads in major newspapers beginning Tuesday opposing proposed tax credits that would give consumers a $4,500 discount on electric vehicles made by unionized autoworkers.

The union tax credit, which would benefit the Detroit Three over others producing and selling cars in the U.S. because their workforces are members of the United Auto Workers, would be among up to $12,500 in consumer rebates for EVs under Democrats’ proposed $1.75 trillion social safety net and climate package.

“Let’s not play politics with the environment, the American autoworker, or the American consumer,” Toyota says in the ad, which the company said will be published this week in the Wall Street Journal, the New York Times and The Detroit News, among others.

Toyota has argued that the proposal disadvantages workers who have chosen not to join a union and is counterproductive to the administration’s goals to cut carbon emissions from transportation.

“This isn’t fair. This isn’t right,” the company says. “Congress needs to put the politics aside on this one. Do the right thing. Treat all American autoworkers fairly.”

The proposed policy would expand the existing EV tax credit system by lifting the 200,000-vehicle-per-manufacturer cap, which GM and Tesla Inc. already have reached.

For five years, the legislation would implement $7,500 point-of-sale consumer rebates for electric vehicles and pay out an additional $4,500 for vehicles assembled in a union facility. Another $500 would be awarded for vehicles using a battery manufactured in the United States. For the next five years after that, the $7,500 base credit would only apply to electric vehicles made in the United States, but the other two incentives would stay the same.

Rep. Dan Kildee, D-Flint Township, and Sen. Debbie Stabenow, D-Lansing, are spearheading the legislation in Congress. They argue the legislation will make significant strides toward cutting emissions by making EVs more affordable for more Americans while incentivizing manufacturing jobs with good wages and benefits.

“Foreign-owned Toyota should spend less money on anti-American worker ads and funding the campaigns of capitol insurrectionist sympathizers, and more money on bringing their plants to the U.S. and paying their workers better wages and benefits,” Stabenow spokesperson Robyn Bryan said in a statement.

The statement, issued in response to the advertisement, refers to donations the company made to members of Congress who voted against certifying the 2020 presidential election in January. The company said in July it would stop donating to election objectors.

Individuals who make more than $400,000 annually would not qualify for the tax credit discount. The credits would cost around $15.5 billion over the 10 years they would be available, according to Kildee’s office.

The UAW, the Detroit Three automakers, energy companies DTE Energy and Consumers Energy, and leading environmental organizations such as the League of Conservation Voters, the Environmental Defense Action Fund and the Sierra Club have expressed support for the legislation.

Other major foreign automakers — including Honda Motor Co., BMW AG, Hyundai Motor Co., Nissan Motor Corp., Volkswagen AG, Daimler AG and Toyota — have consistently voiced opposition to the union provision, as has Tesla CEO Elon Musk and nearly a dozen GOP governors in auto manufacturing states.

Close international allies to the United States have also raised concerns about the legislation, which they argue could violate trade commitments by limiting portions of the credit to domestically produced vehicles.

Over the weekend, the European Union, Germany, Canada, Japan, Mexico, France, South Korea, Italy and other countries wrote a letter to congressional leaders opposing the plan. Canada and Mexico also issued statements against the plan late last month.

The Biden administration included the tax credits with the union provision in a framework version of the long-debated legislation Thursday, though debate continues in Congress over the final shape of the package.

Twitter: @rbeggin