Proposed tax credits for electric cars made in union shops is unfair, SC’s McMaster says

Gov. Henry McMaster was joined by ten other Republican governors in a letter urging U.S. Senate and House leadership to oppose a proposed tax break for electric vehicles assembled in unionized manufacturing plants.

The tax credits, which are being considered in both chambers, would offer incentives for U.S. consumers to buy electric cars while also giving unionized automakers the leg up.

In the House, Democrats want to continue offering a $7,500 tax credit to electric car buyers. They also want to add an additional $4,500 if the car was made at a unionized plant in the United States. The Senate bill would give an extra $2,500 for vehicles put together in union shops, as well as $2,500 if the car was put together in the U.S.

The incentives are part of President Joe Biden’s push to increase the number of eco-friendly cars on the road.

McMaster and other governors worry that the legislation gives an unfair advantage to union shops, going so far as to call the proposed policy “discriminatory.”

“We are deeply concerned that Congress is considering legislation that gives union labor a competitive advantage over non-union labor in the electric vehicle market,” they wrote. “We cannot support any proposal that creates a discriminatory environment in our states by punishing autoworkers and car companies because the workers in their plants chose not to unionize.”

The governors wrote that Congress should not pass policies that favor cars made by one workforce over another.

“This legislation is not about supporting emerging technology but is instead a punitive attempt to side with labor unions at the cost of both American workers and consumers,” the letter said. “By putting certain vehicles at a cost disadvantage, this legislation works against our states, undercuts our residents, and negatively impacts the U.S. economy.”

McMaster was joined by the governors of Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Mississippi, Oklahoma, Tennessee and Texas.

The proposed legislation has drawn opposition from car companies including Toyota, Honda and Tesla, which make cars in the U.S. but don’t have a unionized workforce. United Auto Workers, however, has asked its members to contact their legislators in support of the tax incentives.