The United Auto Workers union said this past weekend it’s working with the Biden administration to ensure changes to any electric vehicle subsidies do not apply to cars built outside of the US. The small change could make a huge difference for automakers itching to use government money to help sell EVs to American car buyers.
“The UAW is working with the Biden administration and Congress to make sure that the final legislation extending electric vehicle subsidies are clear that those investments subsidize the jobs of US workers,” the union’s vice president Terry Dittes said in a statement. “US taxpayer money should never subsidize products assembled in Mexico or any other country.”
While there have been past calls to apply any sort of federal tax credit or future EV point-of-sale rebate to only American automakers, further defining any subsidy could have ripple effects for US carmakers. Say, for example, if General Motors built an electric car in Mexico. Although GM is an American automaker, this hypothetical EV would not qualify for any subsidies under the UAW’s proposal, since it was not assembled in the US.
It’s also no coincidence the UAW made these discussions public over the weekend after GM actually did announce a $1 billion investment in its production plant in Ramos Arizpe, Mexico. The investment will see the Mexico-based facility build future EVs and compliment other North American production sites in the US, according to GM.
Right now, changes to EV subsidies are far from final, but lawmakers and Biden have two avenues to take. One is thein congress, which reinvests in the federal tax credit program. It would provide a $7,000 tax credit to anyone who buys an EV. President Biden’s , however, calls for for EV buyers, which would reduce the cost of the car while signing paperwork at the dealer.