Sen. Joe Manchin (D-W.Va.) reportedly opposes an effort by his party to give a $4,500 tax benefit to electric vehicles made in the United States by unionized manufacturers.
Currently, U.S. law provides some tax credits to individuals who purchase an electric vehicle, ranging from $2,500 on the low end up to $7,500 for qualifying vehicles. Democrats hope to expand that top line credit to $12,500 in their Build Back Better budget bill as part of a larger climate effort.
Of that, a $4,500 tax credit is exclusive to cars produced by unionized manufacturers. Honda, Toyota, and Tesla, who are not unionized firms, have criticized the plan, saying that it would unfairly benefit their unionized rivals: General Motors, Ford Motor, and Stellantis (formerly Fiat Chrysler).
On Thursday, Manchin attended an event by Toyota in his home state of West Virginia, where the Japanese firm announced a $240 million investment in an engine and transmission factory in the state. In an interview at the event, Manchin criticized the proposal by his party.
“When I heard about this, what they were putting in the bill, I went right to the sponsor and I said, ‘This is wrong. This can’t happen. It’s not who we are as a country. It’s not how we built this country, and the product should speak for itself,'” Manchin said, referring to Sen. Debbie Stabenow, (D-Mich.).
“We shouldn’t use everyone’s tax dollars to pick winners and losers,” he continued. “If you’re a capitalist economy that we are in society, then you let the product speak for itself, and hopefully, we’ll get that, that’ll be corrected.”
But many more Democrats support the proposal.
In a mid-October letter to Speaker of the House Nancy Pelosi (D-Calif.) signed by more than 100 House Democrats, Rep. Thomas Suozzi (D-N.Y.) applauded the $4,500 tax credit.
“We strongly support leveling the playing field between non-union and unionized workforces by including the added $4,500 incentive to support union-made EVs,” Suozzi wrote. The tax credits, he added, “help guarantee that working men and women are an integral part of that success story.”
The expanded tax credits are intended as part of a larger legislative effort by Democrats to address the alleged “climate crisis.”
President Joe Biden, after taking office, put forward a goal for the United States to achieve a 50 percent reduction in carbon emissions by the year 2030.
To meet this tall order, Democrats have emphasized the importance of encouraging and expanding alternate sources of energy. In Democrats’ $1.75 trillion budget bill, over $500 billion—more than a quarter of all spending in the bill—goes towards meeting this goal.
The bill would give some incentives to utility companies who transition their power grid away from fossil fuel sources. To further incentivize electric vehicles, the bill authorizes the government to build more charging stations for the vehicles across the United States, in conjunction with the tax credit.
Manchin, a self-described “conservative Democrat,” has not shared these lofty ambitions toward climate policy.
Coming from the coal-rich state of West Virginia, where coal powers nearly the entire state, Manchin has been careful not to endorse policies that would hurt his constituents.
In the past Manchin has shot down a proposed carbon tax and has been skeptical of the plan to give grants or other incentives to utility companies who transition to non-fossil fuel power sources.
Manchin’s vote is a must-have for the final budget package to pass in view of Democrats’ thinnest-possible majority in the upper chamber. Manchin has already had a substantial impact on the bill’s course, causing its price to be cut in half and causing several programs to be cut from the bill.
Because the party needs his vote to get anything done, a strong show of opposition to the new program could force Democrats to remove the additional credit from the bill.
Sen. Manchin’s office has not immediately responded to a request for comment.
