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Toyota Motor Corp (NYSE: TM) and Honda Motor Co (OTC: HNDAF) vehemently opposed the proposal to give electric vehicles made by unions in the United States an additional tax incentive of $ 4,500.
What happened: The bill, proposed by Democrats in the U.S. House of Representatives, is due to be voted on Tuesday by the Democratic-led House Ways and Means Committee.
The bill, which is part of the $ 3.5 trillion spending proposal, would benefit Detroit’s Big Three automakers, which have auto factories represented by unions, according to Reuters.
Japan’s largest automaker Toyota says the proposed plan discriminates “against American auto workers because of their choice not to unionize.” Toyota added that it will also fight to focus taxpayer dollars on making all electrified vehicles available to American consumers who cannot afford high-priced cars and trucks.
Honda said the bill was unfair and “discriminates between electric vehicles made by hard-working American auto workers simply on the basis of their union membership.” The company noted that Honda has factories in Alabama, Indiana and Ohio that manufacture electric vehicles, and said these workers “deserve fair and equal treatment from Congress.”
Why is this important: Under the new proposal, electric vehicles manufactured by American unions would qualify for a tax credit of $ 12,500 per vehicle while keeping the credit for most other electric vehicles at $ 7,500.
The figure of $ 12,500 includes a credit of $ 500 for the use of batteries produced in the United States. The proposal would cost up to $ 34 billion over ten years.
The proposal would significantly favor America’s Big Three automakers General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), and Fiat Chrysler on non-union companies such as Tesla and Japanese automakers, both of which have factories in the United States
US Representative Dan Kildee (D-Michigan) said, “We want to encourage this. It puts American manufacturers first, this is where we want them, and it cuts emissions faster than any other policy we could put in place. “
Photo: Courtesy of Toyota
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