The Biden Administration has proposed a new incentive plan that will offer point-of-sale rebates on electric vehicles and even steeper incentives on EVs built in a unionized facility.
The House Ways and Means Committee introduced a new $3.5 trillion social safety net and climate policy legislation Friday that would implement a $7,500 rebate on EVs for five years. An additional $4,500 would be available to American-made EVs assembled in union facilities, while a further $500 would be available if the vehicle had an American-made battery pack. After the five years is up, the $7,500 incentive will only apply to vehicles made in the U.S., although the American-made vehicle and battery incentives would remain the same.
The EV incentive portion of the legislation was led by U.S. Rep. Dan Kildee (D-Flint) and Senator Debbie Stabenow. The UAW released a lengthy statement Monday in support of the Biden Administration backed bill, which also calls for a top corporate tax rate of 26.5 percent and an individual tax rate of 39.6 percent, referring to it as the “Kildee/Stabenow Made in America Provision.”
“I commend Representative Kildee for crafting legislation to protect and create more good paying union jobs for years to come,” UAW President Ray Curry said in the statement. “Rep. Kildee’s provision would go a long way in supporting good paying union jobs in EV auto sector that President Biden has championed.”
“For too long U.S. tax credits meant to create good paying American jobs have subsidized products not made in the United States or at substandard wages,” he added. “Today’s Amendment continues the work of Sen. Stabenow’s effort to make sure those are good paying jobs right here at home.”
The plan is designed to promote the adoption of all EVs early on and then transition to support American-made EVs specifically after five years, Kildee said.
“We think that gives everybody ample time to understand that when it comes to the American tax dollar, we’re not going to do this in a way that is so disruptive to the market,” the Flint representative said, as quoted by The Detroit News.
The EV incentives would only be available with EVs priced under a certain level. Sedans under $55,000 and vans under $54,000 would qualify, while SUVs under $69,000 and pickups under $74,000 would also fall in line. Several current GM EVs would therefore qualify, including the Chevy Bolt EV, Chevy Bolt EUV and Cadillac Lyriq. The GMC Hummer EV would not be eligible.
The Biden Administration also hopes to drive EV adoption through its $1 trillion bipartisan infrastructure bill, which will set aside $7.5 billion to set up a national network of charging stations along U.S. highways.