11 Republican governors oppose EV tax credit

WASHINGTON—Eleven Republican governors from states with auto manufacturing and distribution plants are opposing proposed legislation in the Democrats' massive spending bill that would give consumers an extra incentive to buy union-made electric vehicles.

In a letter sent Oct. 27 to U.S. House and Senate law makers, the governors said they are "deeply concerned that Congress is considering legislation that gives union labor a competitive advantage over nonunion labor" in the EV market.

At issue is a proposal led by Rep. Dan Kildee, D-Mich., for inclusion in the reconciliation bill that is being negotiated by Democrats. The legislation would boost consumer tax credits to as much as $12,500 for EVs assembled in a factory represented by a labor union with U.S.-produced batteries. After five years, only EVs assembled in the U.S. would be eligible for the $7,500 base credit.

Kildee's proposal would provide an additional $4,500 for EVs assembled in U.S. factories represented by a labor union.

Sen. Debbie Stabenow, D-Mich., led an earlier proposal in the Senate that also would tie additional EV tax credits to vehicles assembled in unionized U.S. factories.

"We cannot support any proposal that creates a discriminatory environment in our states by punishing auto workers and car companies because the workers in their plants chose not to unionize," the governors wrote in the letter.

"By putting certain vehicles at a cost disadvantage, this legislation works against our states, undercuts our residents and negatively impacts the U.S. economy," they wrote. "Congress should not enact proposals that favor vehicles produced by one work force over another, particularly when doing so dramatically limits consumer choice and undermines larger carbon emission reduction goals."

The governors who signed the letter to House Speaker Nancy Pelosi, Minority Leader Kevin McCarty, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell are from Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Mississippi, Oklahoma, South Carolina, Tennessee and Texas.

Michigan Gov. Gretchen Whitmer, a Democrat, did not sign the letter. Her state is home to the UAW.

The group is urging Congress to "consider the investment and employment created by all auto makers—nonunion shops included" as they evaluate the proposals.

The governors' letter comes after a group of more than 100 House Democrats—including Michigan Rep. Debbie Dingell—urged Pelosi to keep the union-built provision in the trillion-dollars spending bill.

In September, top U.S. executives from 12 international auto makers including Toyota, Honda and Volkswagen pressed House lawmakers to support broader tax credits for EVs in the bill and to oppose "policies that slow progress toward meeting our nation's climate goals."

The American International Automobile Dealers Association, which represents more than 9,000 international-nameplate dealers in the U.S., also urged House leaders to oppose the EV tax credit proposal in a separate letter sent last month.

The UAW, which represents U.S. auto workers at General Motors, Ford and Stellantis, has urged Congress to pass the reconciliation bill with the "Kildee/Stabenow provision" on EV tax credits.