EV tax credits in Biden’s Build Back Better Act will help sell more

On Nov 19, 2021

President Joe Biden speaks during a visit to the General Motors Factory ZERO electric vehicle assembly plant, Wednesday, Nov. 17, 2021, in Detroit.

Evan Vucci | AP

DETROIT – Now that President Joe Biden‘s $1 trillion infrastructure bill is law, Democrats are setting their sights on his Build Back Better Act to further advance the administration’s electric vehicle agenda.

The bipartisan Infrastructure Investment and Jobs Act provides $7.5 billion to jump start Biden’s goal of having 500,000 EV charges nationwide by 2030. The $1.75 trillion Build Back Better Act, which is close to a vote in the U.S. House, includes tax incentives of up to $12,500 per vehicle to spur consumer demand in electric vehicles.

“The infrastructure bill the President signed this week is a critical step in investing in our future,” Sen. Debbie Stabenow (D-Mich.) said during an event to celebrate GMC Hummer EV production with Biden in Detroit. “Now we’re focused on the next step.”

The event at General Motor’s Factory Zero was largely a parade of Michigan Democrats touting Build Back Better and using the forthcoming Hummer production as a soapbox to tout union-made vehicles.

“This infrastructure law with my Build Back Better plan, we’re going to kickstart new batteries, materials and parts production and recycling, boosting the manufacturing of clean vehicles with new loans and new tax credits,” Biden said during the event. “Creating new purchasing incentives for consumers to buy American-made, union-made clean vehicles like the electric Hummer.”

The $1.75 trillion Build Back Better bill is set for a vote in the House on Friday.

Controversial incentives

The proposed EV incentive under Build Back Better includes a current $7,500 tax credit to purchase a plug-in electric vehicle as well as $500 if the vehicle’s battery is made in the U.S. It also includes a controversial $4,500 tax credit if the vehicle is assembled domestically with union labor, which has drawn heavy criticism from non-Detroit automakers whose American workers aren’t organized.

Toyota Motor has called the union-made incentive “blatantly biased” and “wrong.” Tesla CEO Elon Musk also has heavily criticized the incentive and Biden for his support of unions such as the United Auto Workers union that represents plant workers of the Detroit automakers.

The tax credits supporting advanced technologies that generally benefit wealthier Americans has always been controversial, but stipulating that a portion of the $12,500 go to union-made EVs escalated the partisan tension. Biden has been unapologetic about his support of unions.

“We’ve got to focus on what made the nation great. I have no problem with Wall Street bankers and others,” Biden said Wednesday. “But they didn’t build America. The middle-class built America and unions built the middle class.”

Under the bill, individual taxpayers reporting adjusted gross incomes of $250,000 or $500,000 for joint filers to get the new EV tax credit. It also would limit the EV credit to…