WASHINGTON—Groups representing major auto makers and other EV stakeholders urged Congress to support the "broadest" EV tax credits for battery-electric and fuel cell vehicles in the $3.5 trillion budget reconciliation bill.
In a letter sent Sept. 2, the Electric Drive Transportation Association—along with the Alliance for Automotive Innovation, Autos Drive America and the Zero Emission Transportation Association—asked Democratic law makers to expand and extend the Section 30B and 30D tax credits for EVs "to support consumer acceptance and help manufacturers reach the economies of scales needed to achieve parity" with the gasoline-powered vehicle market.
"With the goal of significantly increasing the number of EVs on the road, the credit should fully apply to the broadest range of vehicles and be available to the broadest range of consumers," the groups said in the letter, which was addressed to House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, House Ways & Means Committee Chairman Richard Neal and Senate Finance Committee Chairman Ron Wyden.
The groups said they are ready to work with Congress to achieve the Biden administration's electrification goals. President Joe Biden has set a nonbinding target for zero-emission vehicles—battery-electrics, plug-in hybrids and fuel cells—to make up half of all new vehicles sold in 2030.
"To effectively accelerate the transition to electric transportation, in the time frame necessary to address the threats of climate change, an updated electric vehicle credit needs to provide a broad incentive for diverse consumers, infrastructure, and vehicle markets," the groups said.
The Senate Finance Committee in May approved a proposal led by Sen. Debbie Stabenow, D-Mich., in the Clean Energy for America Act that would allow vehicle buyers to receive as much as $12,500 for electric vehicles assembled by union workers at U.S. factories.
Under the proposal, consumers are eligible for a $7,500 tax credit if they buy an EV and can receive an additional $2,500 if the vehicle is assembled in the U.S. and another $2,500 if it is assembled in a plant whose work force is represented by a union.
Rep. Dan Kildee, a UAW-supported member of the Ways & Means Committee and the Budget Committee, on Wednesday said the House is "largely working on the basis of the work" that was done together with Stabenow but still working through "a lot of these numbers."
Toyota Motor Corp., American Honda Motor Co., Volkswagen Group of America and other nonunion industry advocates including Autos Drive America have criticized Stabenow's proposal, calling it unfair and discriminatory and arguing that favoring EVs built by union workers will limit consumer choice.
The debate over EV tax credits is likely to escalate as Congress turns to the Biden administration's budget reconciliation bill—a sprawling package that includes some of Biden's most ambitious agenda items.
House and Senate committees are expected to mark up various pieces of the bill by a nonbinding deadline of Sept. 15. The budget bill can pass in the Senate with a simple majority vote, or 50 senators plus the vice president.
But Sen. Joe Manchin—one of the Democratic party's key swing votes from a red state—has called for a "pause" on the $3.5 trillion plan. In a Thursday op-ed in The Wall Street Journal, the West Virginia Democrat cited "rising inflation, crippling debt" and future crises as reasons to delay action on the bill.
