ICYMI: AP: "Biden bill includes boost for union-made electric vehicles"

Yesterday, the Associated Press explored how the President's Build Back Better Agenda will help lower the costs by $12,500 for working families to buy American-made electric vehicles (EVs) while supporting good-paying, union jobs that grow the middle class. The proposal compliments the Bipartisan Infrastructure Deal that the President will sign into law next week that will build out the first-ever national network of EV chargers alongside highways and rural areas across America, helping bolster domestic supply chains, improve air quality, and reduce emissions to fight the climate crisis.

Michigan Congressman Dan Kildee highlighted how unions help build out the middle class: "I'm a student of America's economic history and labor unions have consistently helped build out the middle class. We should have a policy that's consistent with our values. Our values are that communities are stronger, the economy is stronger when workers have wages, benefits and protections that not only apply to them, but set the highest standard for all other employees."

UAW President Ray Curry noted how the proposal will create "good paying union jobs and stands to benefit our country for decades to come" and also "encourages nonunion manufacturers to let their workers freely organize."

Read key experts of the story below:

Associated Press: Biden bill includes boost for union-made electric vehicles
[Kevin Freking, 11/11/21]

President Joe Biden and Democrats in Congress are looking to give U.S. automakers with union employees the inside track on the burgeoning electric vehicle market, triggering vocal opposition from foreign trade partners and Republicans who worry that manufacturers in their home states will be placed at a competitive disadvantage.

The $1.85 trillion spending package that Democrats are laboring to pass through Congress includes an array of programs designed to curb global warming and slash U.S. emissions. It includes incentives to hasten the transition to electric vehicles, which represent a small but rapidly growing share of the market.

If enacted, the bill would provide a $7,500 tax credit for consumers who purchase electric vehicles through 2026. Beginning the following year, only purchases of electric vehicles made in the U.S. qualify for the credit. The base credit goes up by $4,500 if the vehicle is made at a U.S. plant that operates under a union-negotiated collective bargaining agreement. Only auto plants owned by General Motors Co., Ford Motor Co. and Stellantis NV currently qualify.

"I want those jobs here in Michigan, not halfway around the globe," Biden said when visiting a UAW job training center last month.

The union friendly add-on is raising hackles internationally and inside the U.S., testing the Democratic Party's commitment to a labor-friendly approach that Biden has made central to his political brand. The provision could boost the sale of electric vehicles while disadvantaging foreign automakers with U.S. plants that employ tens of thousands of manufacturing workers, particularly in Southern states where laws have made it hard to unionize.

Democrats are undaunted. They say supporting union jobs is good for the economy and the country.

"I'm a student of America's economic history and labor unions have consistently helped build out the middle class," said Rep. Dan Kildee, D-Mich. "We should have a policy that's consistent with our values. Our values are that communities are stronger, the economy is stronger when workers have wages, benefits and protections that not only apply to them, but set the highest standard for all other employees."

[…]

All but the richest Americans would qualify for the tax credit, which would apply to vans, SUVs and pickups costing less than $80,000 and cars costing less than $55,000.

UAW President Ray Curry said in a statement supporting the bill that it would support "good paying union jobs and stands to benefit our country for decades to come."

"In addition, this framework encourages nonunion manufacturers to let their workers freely organize," Curry said.

Labor unions have seen their power recede in recent decades, largely due to declining membership. Kildee's congressional district includes the city of Flint, where a sit-down strike by General Motors workers in 1936-1937 brought about one of the biggest victories for labor unions in America's history. Within a year, membership in United Auto Workers grew from 30,000 to 500,000 and wages for autoworkers increased by as much as 300%.

"It transformed the community, and we think everybody should have that opportunity," Kildee said.

[…]

The combined $12,000 credit for cars made in U.S. plants with union workers would cut the starting price of a Chevrolet Bolt small electric hatchback from about $32,000 to around $20,000. That's well below the average price of a new vehicle, now over $42,000. The car also qualifies for additional $500 credit that is available for batteries made in the U.S.

"It plays into the mix, of course, because it makes it more affordable and more accessible to people," IHS Markit auto analyst Stephanie Brinley said of the tax credits.

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What's likely to have a bigger impact on sales is the sheer number of fully electric models rolling off production lines, many in the most popular segments of the U.S. market. Those include compact SUVs and full-size pickup trucks, two of the most popular vehicle types. There are about 35 fully electric models today, but that will jump to around 150 by 2025, Brinley said.

Electric vehicle sales are now 2% of U.S. new vehicles sales, but IHS Markit, a research and analytics company, expects the share to grow to 32% by 2030.