Toyota urges House committee to reject ‘blatantly biased proposal’ on expanded EV tax credits

Japanese automaker Toyota urged a House committee to reject a “’blatantly biased proposal” that would expand tax credits to electric vehicles that are union-made.

In a letter addressed to House Ways and Means Committee Chairman Richard Neal (D-Mass.) and ranking member Kevin Brady (R-Texas), Toyota said while the company supported the mission to reduce carbon emissions and sell electric vehicles, they believed that the proposal to give additional tax credits to electric cars that were union-made was discriminatory.

“Our common goal is straightforward: reduce the amount of carbon that autos release into the atmosphere by putting more electric vehicles (EVs) on the road. While the EV tax proposal before you makes strides toward that goal, it includes provisions that will discriminate against nearly half the autoworkers in the country and puts the environment second to unrelated agendas,” top Toyota officials from U.S. manufacturing facilities wrote in a statement.

On Friday, House Democrats introduced a proposal to expand the tax credits for electric vehicles. Most electric vehicles would have a tax credit of $7,500. That, however, would jump to $12,500 if the cars are union-made, according to Reuters. Under the proposal, General Motors, Ford Motor Company and Chrysler parent Stellantis NV would benefit from the proposal given that they employ union workers.

Tesla and foreign automakers with facilities in the U.S. would be placed at a disadvantage, according to the news outlet. Toyota and Honda have come out against the proposal, which the committee is set to vote on Tuesday. 

Toyota argued in its letter to the committee that its benefits and compensation were “competitive” to other companies who employed union workers and that “an EV made by autoworkers who choose to unionize does not make that vehicle any better for the environment.”

“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. This is unfair, it is wrong, and we ask you to reject this blatantly biased proposal,” the top Toyota officials argued in their letter.

The automobile company also said that the tax credit favored people who could already afford electric vehicles. Those making an adjusted income of up to $400,000 would be eligible to receive the tax credit under the proposal. A head of household making up to $600,000 or up to $800,000 in the case of a joint return would also be eligible.

According to The Detroit News, there are price limits on which electric vehicles would be eligible for the program. 

“Given the competing social priorities the ‘Build Back Better’ plan is intended to address, does it make sense to give a tax break of $12,500 to people who can afford to spend as much on a vehicle as some Americans spend on a home?”

The Hill has reached out to Neal’s office and Ways and Means Republicans for comment.

Still, several environmental and union groups have issued their support for the proposal in addition to Ford, GM and Stellantis.

“The AFL-CIO wholeheartedly supports the pro-union provisions of electric vehicle tax credit that the Ways and Means Committee is marking up this week. A bonus tax credit for EV’s assembled in a union shop will support high standards for all autoworkers,” American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) said in a statement.

Katherine García, acting director of the Sierra Club’s Clean Transportation for All campaign, said in a statement that it was “disappointing to see automakers like Toyota and Honda lobbying against this important incentive.”

“Building healthier communities requires advancing clean cars and family-sustaining jobs in the US, because improving air quality, reducing climate emissions, and securing economic justice go hand in hand,” Garcia said in a statement. 

“We urge Congressional leaders to take charge of this moment to move this forward, along with even bigger investments in the transformation of our transportation systems,” she later added.