If you buy an electric vehicle—any electric vehicle—in the United States right now, you qualify for a $7,500 tax incentive. But the United Auto Workers (UAW) wants to change that. It wants that incentive to only qualify for EVs that are assembled in the U.S.
The union’s frustration isn’t unfounded and is in fact rooted in General Motors’ decision to retool its Ramos Arizpe manufacturing facility in Mexico to manufacture EVs. And it’s going to spend about $1 billion to make that happen. Yesterday, the UAW called it a slap in the face, since there’s such a massive push by the Biden administration to swap from gas to electric power. The hope was that an increased demand for EVs would result in increased US-based jobs. But that doesn’t appear to be the case.
GM, for its own part, has claimed that the UAW should be content with the fact that it added 9,000 via new EV or battery cell manufacturing plants in Michigan, Ohio, and Tennessee. But jobs are jobs, and many folks are increasingly desperate for anything that would guarantee the creation of jobs in the United States, especially in the wake of massive COVID-19 layoffs.
So, UAW Vice President Terry Dittes stated, “The UAW is working with the Biden administration and Congress to make sure that the final legislation extending electric vehicle subsidies is clear that those investments subsidize the jobs of U.S. workers.”
In some ways, that does seem to be the goal of the Biden administration. President Joe Biden has previously called for $174 billion to boost EV production, sales, and infrastructure in the United States. He’s argued that “there’s no reason why American workers can’t lead the world in the production of electric vehicles and batteries.” And he’s proposed an extra $100 billion in new consumer rebates.
At the same time, though, there’s a huge conflict of interest. Yes, it would be ideal to go electric and bolster American jobs in the process—but the climate situation is pretty dire. Even if the world does manage to reduce its carbon emissions to meet acceptable standards, we’re still going to face widespread changes to the Earth that could wreak havoc on life as we know it. If getting more people into greener vehicles as quickly as possible is the ultimate goal, then reducing incentives on a portion of EVs is probably not a great idea.
President Biden has not yet responded to the UAW’s statement regarding limitation on the federal tax incentives.