Foreign automakers urge U.S. House Democrats to reject union electric vehicle tax credit

WASHINGTON, Sept.30 (Reuters) – A group of 12 major foreign automakers including Toyota Motor Corp (7203.T), Volkswagen AG (VOWG_p.DE), Hyundai Motor Co (005380.KS) and Nissan Motor Co (7201. T)), urged Democrats in the United States House of Representatives to reject a proposed $ 4,500 tax incentive for electric vehicles made in the United States by unionized workers.

A House panel this month approved legislation to increase electric vehicle credits up to $ 12,500 per vehicle, including $ 4,500 for union-made vehicles and $ 500 for state-made batteries. -United.

U.S. units of foreign automakers said in a letter Thursday to House Speaker Nancy Pelosi and other Democrats that the proposal “would unfairly disadvantage American workers who have chosen not to join a union and produce more than half of all vehicles in the United States. and the vast majority of electric vehicles made in the United States. “

Other signatories include Honda (7267.T), BMW (BMWG.DE), Kia (000270.KS), Mazda (7261.T), Mercedes-Benz de Daimler AG (DAIGn.DE), Subaru (7270.T) and Volvo Cars owned by Geely (0175.HK).

Late Thursday, six Democratic lawmakers who are co-chairs of the House Labor Caucus, led by Representative Thomas Suozzi, urged Pelosi to retain the $ 4,500 incentive for union-built electric vehicles.

“Every foreign automaker employs a union workforce in its home country, but those same companies systematically choose to invest in right-to-work states hostile to collective agreements,” they wrote.

United Auto Workers (UAW) Chairman Ray Curry said Thursday that by ensuring that “taxpayer funding goes to the national auto and battery assembly, and to ensure those jobs are well-paying union-wide jobs, we protect our future. “

Curry added that “those jobs of the future that replace traditional engine jobs must provide the same middle class wages and benefits that have built our modern economy.”

The tax credits, which are part of the $ 3.5 trillion spending bill, would cost $ 15.6 billion over 10 years and disproportionately benefit Detroit’s Big Three automakers – General Motors (GM. N), Ford Motor Co (FN) and Stellantis NV (STLA.MI), the parent company of Chrysler – which assembles its vehicles made in the United States at factories represented by the UAW.

The EV proposal also removes the phase-out of tax credits after automakers sold 200,000 electric vehicles, which would make GM again eligible, along with Tesla Inc (TSLA.O), although Tesla does not receive the credit of $ 4,500.

Tesla and foreign automakers do not have unions representing assembly workers in the United States, and many have fought the UAW’s efforts to organize American factories.

Tesla Chief Executive Officer Elon Musk suggested on Twitter this month that the electric vehicle proposal was “written by Ford / UAW lobbyists … It’s not clear how it serves U.S. taxpayers. “.

Reporting by David Shepardson; Editing by Leslie Adler and Simon Cameron-Moore

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