Elon Musk Accuses Ford and UAW Lobbyists of Writing EV Incentives Proposal

The last piece of evidence about that came from Elon Musk, who accused Ford and UAW lobbyists of writing a new electric car incentive proposal that gives EVs $4,500 more if they are produced in American factories by unionized workers.

Currently, all electric passenger cars sold by a given company may receive a federal tax incentive of $7,500 up to the limit of 200,000 units. Tesla and General Motors (GM), which have already sold more electric vehicles than that, would be eligible for the federal tax credit again. Apparently, that is not enough.

The new rules would set federal tax credits for EV for ten years starting in 2022. In the first five years (up to 2027), electric cars sold in the U.S. that respect some price limits would be eligible to receive the $7,500. However, the incentive could be increased by $4,500 if the car came from a unionized factory. Another $500 would be offered to cars with a battery pack made on American soil.

After 2027, only electric cars made in the U.S. would be able to receive the $7,500 incentive. The other two rules would remain in place as they are, allowing for the same total federal tax credit of $12,500.

The price barriers would be $54,000 for vans, $55,000 for sedans, $69,000 for SUVs and crossovers, and $74,000 for pickup trucks. The H.R. 3684 also wants to establish income limits. Only individuals that make up to $400,000 per year, heads of households that earn less than $600,000/year, or joint fillers that do not exceed $800,000 would be eligible for the credit.

At least that was the initial plan. In August, the U.S. Senate approved a non-binding amendment that lowered those values to $40,000 for all vehicles and the individual income restraint to $100,000 per year. We’re yet to see what version of the bill the U.S. Congress will approve.

It was in this context that Musk tweeted that the Ford and UAW lobbyist wrote the amendment. The bill will not exclude imported vehicles from the federal tax incentive: that has the clear goal of avoiding sanctions from the WTO (World Trade Organization).

Another target would be to allow American customers to have access to more EVs produced elsewhere. The ones that did better in sales would push investments in the U.S. because electric cars that wanted to keep receiving the federal tax credit would need to be produced locally from 2027 on.

The Mustang Mach-E is manufactured at Ford’s Cuautitlán plant in Mexico. However, it is not clear how a unionized factory in Mexico would bring more investments to the U.S. The only reason to have that is to avoid accusations that this is a protectionist measure, which would also put the American government at odds with the WTO.

Ford and UAW are not best friends as Musk’s tweet makes them seem. The automaker has been accused more than once by the union of being greedy for moving production to Mexico instead of keeping it in American factories. Nonetheless, Ford does not have a record of fighting unions as much as Tesla.

On March 25, 2021, the NLRB (National Labor Relations Board) ordered Tesla to reinstate Richard Ortiz. This former employee accused Tesla of firing him for trying to organize a union at the Fremont factory.

In the same decision, NLRB ordered Elon Musk to erase a 2018 tweet that asked, “why pay union dues & give up stock options for nothing,” which looked like a threat of removing stock options as compensation for employees. The company appealed the decision to a federal court, and that tweet still remains online. Ortiz also was not reinstated. He promised to keep trying to unionize Fremont when he is.

Musk was not the only one to complain about the rules to incentivize union organizations in factories that still lack them. Honda and Toyota also criticized the proposal as being “against American autoworkers based on their choice not to unionize.” What they did not do was accuse another car company of writing the rules. Ford has not answered Musk’s tweet so far.

This is written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers. https://t.co/FUUXARHlby

— Name (@elonmusk) September 12, 2021