US House plan would give electric vehicles a boost but faces opposition

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WASHINGTON, Oct.29 (Reuters) – A Democratic spending proposal of $ 1.75 trillion could give electric vehicles a boost, especially the Big Three automakers in Detroit and the U.S. Postal Service, but it faces opposition from Republicans, foreign automakers, Canada and Mexico.

The House plan increases credits for electric vehicles up to $ 12,500 per vehicle, including $ 4,500 for union-made vehicles and $ 500 for US-made batteries. Vehicles would have to be manufactured in the United States from 2027 to be eligible for credit.

Electric vehicle tax credits would cost $ 15.6 billion over 10 years and disproportionately benefit Detroit’s Big Three automakers – General Motors (GM.N), Ford Motor (FN) and Stellantis NV, the parent company of Chrysler – who assemble their vehicles made in the United States in countries represented by unions. plants.

United Auto Workers (UAW) Chairman Ray Curry said the provision would “create and preserve tens of thousands of jobs for UAW members” and “would be a victory for workers in the auto manufacturing industry.” .

“The framework announced today supports well-paying union jobs and is expected to benefit our country for decades to come,” he said.

Foreign automakers, however, have severely criticized the decision to give union-made vehicles a big boost. A dozen foreign automakers on Friday urged the two U.S. senators from California to oppose it, saying it was unfair to state workers.

The Mexican government has slammed the US proposal, according to a letter released Friday in which Economy Minister Tatiana Clouthier expressed “strong concern” about the provisions, adding that it is “against value-content rules regional agreements “in the United States. -Mexico-Canada Trade Agreement (USMCA).

Last week, Canada said the tax credit proposals could hurt the North American auto industry and violate trade agreements.

BREWING OF OPPOSITION

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 workers for the automobile industry and the automakers because workers in their factories have chosen not to unionize. “

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.

Honda said in a letter Friday that “this tax credit plan would pit Americans working for the three ‘legacy’ companies against American workers at other automakers.”

The bill would allocate $ 6 billion to the US Postal Service for the purchase of electric vehicles and delivery infrastructure. The USPS said Friday that it estimated, under the bill, that “all delivery fleet acquisitions could be electric by 2028, and corresponding 70% of our entire delivery fleet. here “2030.

In February, the USPS awarded a 10-year contract to Oshkosh Defense, a subsidiary of Oshkosh (OSK.N), to build a mix of internal combustion vehicles and delivery of electric vehicles worth $ 6 billion.

The EV proposal eliminates the phase-out of tax credits after automakers sold 200,000 electric vehicles, which would make GM eligible, along with Tesla (TSLA.O).

Energy Secretary Jennifer Granholm defended the decision to exclude Tesla from higher credit, telling CNBC: “We want to make sure we’re doing everything we can to encourage businesses and workers to really focus on raising standards for ordinary Americans. “

Earlier this month, more than 100 House lawmakers signed a letter urging Speaker Nancy Pelosi to support the tax credit. Read more

The bill would create a new tax credit for electric bicycles and three-wheeled vehicles, a 30% credit for commercial electric vehicles and a $ 4,000 tax credit for used electric vehicles.

It would authorize $ 3.5 billion for “home-made conversion” grants for electric vehicles and other green vehicles and provide $ 3 billion to boost a US loan program to retool existing auto factories to build. more fuel efficient models and expand it to cover trains, zero emission planes, boats and Hyperloop technology.

Reporting by David Shepardson; additional reporting by Sharay Angulo; Editing by Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.


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