Manchin: EV tax credits favoring Detroit Three, UAW are 'wrong'

Riley Beggin
The Detroit News

Washington — Sen. Joe Manchin said Thursday that he opposes a provision in the Build Back Better bill that would give an additional $4,500 in consumer rebates for EVs made by union workers. 

The conservative Democrat from West Virginia wields immense power over the final form of the package to enact the rest of President Joe Biden's agenda, which must pass through an evenly divided Senate before becoming law. 

Sen. Joe Manchin, D-W.Va.

Manchin told Automotive News during an event in West Virginia that the EV tax credit provision — spearheaded in the House by Rep. Dan Kildee, D-Flint Township, and in the Senate by Sen. Debbie Stabenow, D-Lansing — is "not American."

“When I heard about this, what they were putting in the bill, I went right to the sponsor (Stabenow) and I said, ‘This is wrong. This can’t happen. It’s not who we are as a country. It’s not how we built this country, and the product should speak for itself,” Manchin told the publication.

“We shouldn’t use everyone’s tax dollars to pick winners and losers. If you’re a capitalist economy that we are in society then you let the product speak for itself, and hopefully, we’ll get that, that’ll be corrected.”

He said Stabenow's response was "not good" but that he respects her stance because they're both fighting for their constituents. "I’m just fighting for fairness in the system, and hopefully, we’ll prevail."

Stabenow told The Detroit News via email that she supported Manchin two years ago when he proposed legislation to help the members of the United Mine Workers of America union in West Virginia. 

"At that time, some argued his bill was unfair and was picking winners and losers. But we rejected that argument and stood together to protect union pensions," she said. “This issue is no different. Standing up for hardworking Americans is always the right thing to do.”

She added that "there's nothing more American than supporting the opportunity for workers to collectively bargain for good pay and benefits no matter where they live and what company they work for."

Kildee also said in a statement that the credit puts American workers first. 

"When we spend American tax dollars, we should invest in American jobs that pay industry-leading wages and benefits and ensure the strongest worker protections."

The proposal, included in the Build Back Better bill, would lift the 200,000 vehicle per manufacturer cap and implement $7,500 point-of-sale consumer rebates for electric vehicles. It would pay out an additional $4,500 for vehicles assembled in a union facility and $500 for vehicles using a battery manufactured in the U.S.

For the next five years after that, the $7,500 base credit would only apply to electric vehicles made in the U.S., but the other two incentives would stay the same.

Unlike the existing electric vehicle tax credit — which requires EV buyers to claim it on their taxes at the end of the year and can only be fully used if your tax burden is at least $7,500 — customers would get the discount when they buy their new car, making vehicles accessible to those who couldn't otherwise wait a year to get $12,500 back from the government.

The Detroit Three, the United Auto Workers and several environmental groups have endorsed the proposal. General Motors Co., Stellantis NV and Ford Motor Co. are the only automakers in the U.S. with unionized workforces. 

Automakers without unionized workforces have fiercely opposed the $4,500 credit for union-made vehicles, arguing the proposal unduly penalizes workers for choosing not to join a union and setting back the administration's emissions reduction plans. 

Executives at 12 major carmakers — including Honda Motor Co., BMW AG, Hyundai Motor Co., Nissan Motor Corp., Volkswagen AG and Toyota Motor Corp. — have asked Speaker of the House Nancy Pelosi to ditch the provision, and Tesla CEO Elon Musk wrote on Twitter that the package was "written by Ford/UAW lobbyists." The Republican governors of 11 right-to-work states also wrote to congressional leaders opposing the union credit.

"We agree with Senator Manchin's concerns and agree with him that tax dollars should not be used to pick winners and losers," said Jennifer Safavian, CEO of Autos Drive America, an advocacy group representing foreign automakers producing vehicles in the U.S. "We will continue to advocate that all electric vehicles should receive equal tax incentives and hope more policymakers recognize that this is bad policy."

Manchin's office did not immediately respond Thursday to a request from The Detroit News as to whether he would support the EV tax credit proposal without the union provision.

The senator made his comments at an announcement by Toyota it will add a production line dedicated to hybrid powertrains at its facility in Buffalo, West Virginia, in a $240 million investment.

Twitter: @rbeggin