Tesla CEO Elon Musk commented on the new federal electric car incentive reform proposed by the Democrats, which includes a big benefit for unions.
Musk alleged that Ford and the United Auto Workers union wrote the new piece of legislation.
As we reported last week, the Democrats unveiled the latest version of their planned reform of the federal EV incentive, which they plan to push through as part of their $3.5 trillion social spending bill.
They were several changes compared to previously proposed reforms, but the biggest one is a $4,500 additional benefit to electric vehicles coming out of factories where the workers are part of a union.
It is putting several foreign automakers that produce vehicles without union workers at a disadvantage.
Domestically, it gives a strong advantage to virtually all American automakers, except for Tesla.
The automaker and its workers have resisted efforts from the UAW to unionize the Fremont factory, where Tesla produces all its vehicles for the US market.
On Twitter last night, Tesla CEO Elon Musk said that he believes that lobbyists for Ford and the UAW are behind the new language in the bill:
“This is written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers.”
While there’s no proof behind the allegation, following the money shows that Ford and UAW likely had a lot of influence behind the new legislation.
There’s no doubt that The Big Three – Ford, GM, and Chrysler, out of Michigan – and the UAW workers they employ, will benefit the most from these changes.
It just so happened that Dan Kildee, US representative for Michigan’s 5th congressional district, who arguably couldn’t get elected without UAW support, was behind some of those changes.
Musk also singled out Ford, which is going to particularly benefit from the change to the reform that gives a five-year grace period for electric vehicles produced outside of the US to still get the $7,500 incentive.
Ford invested heavily in the production of its Mustang Mach-E, its first next-gen all-electric vehicle, at a factory in Mexico.
Musk is not alone in expressing discontent with the new language about unions in the new legislation.
Honda and Toyota both said that they are against it, but they also don’t have any EV production in the US.
Update: Ford issued the following statement on the matter:
“Electric vehicle consumer incentives are key to accelerating the transition to a zero-emissions transportation future, and we appreciate Congressman Kildee and Senator Stabenow’s leadership on this issue,” said Kumar Galhotra, President, Americas & International Markets Group, Ford Motor Company. “This legislation will help more Americans get into EVs, while at the same time supporting American manufacturing and union jobs. As the automaker who assembles more vehicles in America than any other, Ford is doing our part to lead the electric vehicle revolution by investing tens of billions of dollars in EVs. Initial customer response to the fully electric versions of our most iconic and popular vehicles, like the American-assembled F-150 Lightning and E-Transit, is exceeding our expectations. We will continue to work with our government and UAW partners to combat climate change and stand up for American workers.”
My take is simple. I am pro anything that is going to accelerate the advent of electric transport. That’s the most important part. This new legislation is undoubtedly going to achieve that. Therefore, if it’s between that and nothing, I’m definitely for that.
However, I’m certainly disappointed that they use such important new legislation to push a political agenda that is completely unrelated to the acceleration of electric transport. The incentive to buy electric vehicles is supposed to represent their greater value on the environment and health of the population versus their fossil fuel-powered counterparts. Whether you are pro-union or not, you can agree that whether or not union workers are making the EVs has nothing to do with how great their impacts are on the environment and health. It’s just about making it political and it doesn’t actually focus on increasing EV adoption.
That’s also why I’m actually for the five-year grace period for EVs produced outside the US. It will avoid temporarily slowing down EV adoption in the US and also avoid similar protectionist retaliation from foreign markets that get EVs from the US.
Back to the union issue: I am not anti-union. Workers banding together to get collective bargaining power makes sense to me. However, it can also get out of control when greed and corruption get involved, and we have seen that happen with the UAW.
Tesla has fiercely fought against UAW unionizing the Fremont factory, even illegally at times according to the NLRB.
While UAW appears to be out of the question, Tesla workers could potentially create their union separate from the UAW and then Tesla vehicle buyers would get access to the extra $4,500 incentive.
Obviously, that’s not an ideal situation. I think the value of the incentive should simply represent the lesser negative impact EVs have on the environment compared to their gasoline-powered counterparts.
But they created the game, so they might as well play it.
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