Toyota, Honda urge Congress to reject expanded tax incentive that would benefit Ford, GM, Stellantis

Toyota Motor and Honda are urging legislators to reject a bill that would expand tax incentives for union-made electric vehicles that are built in the United States.

The proposal – which Toyota blasted as “blatantly biased” and “exorbitant” in a letter to Congress – would expand the federal tax incentives from $7,500 to as much as $12,500 for union- and domestically manufactured cars. Vehicles with batteries manufactured in the U.S. would be eligible for an additional $500. If the legislation passes, vehicles from automakers like Toyota, Honda and Tesla would be excluded from the expanded credit, while the “Big Three” manufacturers in Detroit would all qualify.

“The current [bill] 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 said in a letter to lawmakers. “This is unfair, it is wrong, and we ask you to reject this blatantly biased proposal.”

The automaker further said that the bill favors the wealthy – people that may not need public funds to purchase an electric vehicle. There is a means testing provision in the bill, that would limit access to the credit to individuals making an adjusted income of up to $400,000, or households that make up to $800,000. Whether to set an income cap – and what that income cap should be – has been a major point of contention between Congressional Democrats and Republicans.

The bill also received criticism from Tesla CEO Elon Musk, who said on Twitter that it was “written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers.”

This would be the first such increase to the up to $7,500 tax credit for EVs since it was put into effect over a decade ago. The bill would also do away with a stipulation that exempts vehicles made by OEMs that have sold over 200,000 EVs from the credit, meaning that General Motor and Tesla cars would once again be eligible.

The bill did receive praise from GM, Ford Motor and Stellantis, three major automakers with workforces represented by the United Auto Workers union. The UAW also supports the proposal.

It’s being considered Tuesday by the House Ways and Means Committee. The expanded credit just one part of a massive $3.5 trillion budget reconciliation bill that’s currently being debated by Congress and that includes a whole slew of socially progressive proposals meant to target education, healthcare, and climate change.