Foreign automakers criticize White House embrace of union plants in EV race

Honda Motor Co., Toyota Motor Corp. and other foreign automakers are voicing their unease with signs the Biden administration wants to give their unionized Detroit rivals a leg up in the race to win over electric vehicle buyers.

The White House invited executives from General Motors Co., Ford Motor Co. and Stellantis NV, which owns the Jeep and Ram brands, and the United Auto Workers labor union to a ceremony last week after calling on the industry to boost EVs to half of all sales by 2030.

Congress has been considering legislation to increase incentives for EV buyers, including a proposed bill from a key Democratic lawmaker that would provide greater subsidies for vehicles made in the US at plants requiring collective bargaining.

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That type of provision -- which may not be passed into law -- would put foreign automakers with US factories as well as EV market leader Tesla Inc. at a disadvantage because their vehicle assembly plants don’t use union workers.

“We believe inclusive policies will accelerate the shared goal of achieving carbon neutrality and electrification of the auto industry," Stephen Ciccone, group vice president of government affairs at Toyota, said Friday in a statement. “This policy would unfairly discriminate against American autoworkers based on their choice of whether to unionize."

Honda and Volkswagen AG likewise oppose providing extra incentives to car buyers who buy EVs made with union labor. The German automaker said policies that favor certain automakers could blunt the pace of EV adoption, while Honda said it could result in fewer choices.

(Also read | Climate goals at risk if only rich countries adopt electric cars)

Slipping Share

The three traditional Detroit automakers have seen their market share slip in recent years to less than half of the US market. They accounted for about 39% of all new car sales in the US in the first half, according to data from Cox Automotive. Toyota’s 15.5% share topped both Ford and Stellantis, and ranked second behind market leader GM’s 15.9%.

Michigan Senator Debbie Stabenow has steered a proposal through the Senate Finance Committee that would provide additional financial incentives to battery-powered cars and trucks made in the US with union labor. All told, such subsidies could total up to $12,500 per vehicle in tax credits, which would make EVs more competitively priced with gasoline-only models.

Tesla Chief Executive Elon Musk and the trade group for foreign automakers both expressed displeasure at not being invited to Biden’s White House address.

Jennifer Safavian, president of the foreign automaker lobbying group Autos Drive America, said it would be unfair to prioritize the interests of carmakers that use union labor over those that don’t.

“It is baffling that Congress is pushing electric vehicle incentives that only benefit union workers in certain states," she said in a statement. “Congress needs to keep full incentives for all-electric vehicles and not play favorites."