WASHINGTON — A $1.75 trillion Democratic spending proposal could give a big boost to electric vehicles — especially to the Detroit 3 automakers and the U.S. Postal Service — but it faces opposition from Republicans, foreign automakers, Canada and Mexico.
The House plan boosts EV credits to up to $12,500 per vehicle, including $4,500 for union-made vehicles and $500 for U.S.-made batteries. Vehicles would have to be made in the U.S. starting in 2027 to qualify for any credit.
The EV tax credits would cost $15.6 billion over 10 years and disproportionately benefit the Detroit 3 automakers — General Motors, Ford Motor and Chrysler-parent Stellantis NV — which assemble their U.S.-made vehicles in union-represented plants.
UAW President Ray Curry said the provision will “create and preserve tens of thousands of UAW members’ jobs” and “would be a win for auto manufacturing workers.”
“The framework announced today supports good paying union jobs and stands to benefit our country for decades to come,” he said.
Foreign automakers, however, have harshly criticized the decision to give union-made vehicles a big leg up. A dozen foreign automakers on Friday urged California’s two U.S. senators to oppose it, saying it was unfair to the state’s workers.
The Mexican government criticized the U.S. proposal, according to a letter released on Friday in which Economy Minister Tatiana Clouthier expressed her “strong concern” over the provisions, adding that it is “contrary to the regional value content rules agreed upon” in the United States-Mexico-Canada Agreement (USMCA) trade pact.
Last week, Canada said the tax credit proposals could harm the North American auto industry and run afoul of trade agreements.
On Wednesday, the governors of 11 states, including Texas, Florida and Arizona, said they opposed the tax credit arguing it would create a “discriminatory environment in our states by punishing autoworkers and car companies because the workers in their plants chose not to unionize.”
Tesla and foreign automakers do not have unions representing assembly workers in the U.S. and many have fought UAW efforts to organize U.S. plants.
