Capito Blasts Electric Vehicle Tax Credit in ‘Build Back Better’ Bill

CHARLESTON — While the $1.75 trillion Build Back Better social spending bill has changed nearly daily for the last several weeks, a provision that could put electric vehicle manufacturers in West Virginia at a disadvantage has remained unchanged.

President Joe Biden’s Build Back Better framework, a combination of social spending projects that were part of his American Jobs Plan and American Families Plan, would allow electric vehicle manufacturers to offer a $7,500 tax credit for consumers who purchase an electric vehicle.

The tax credit would last for five years once the Build Back Better plan is passed by the U.S. House of Representatives and the U.S Senate and signed by Biden. But the Build Back Better plan includes an additional $4,500 tax credit for consumers who purchase a union-built American-made electric vehicle.

While the bill is not expected to gain any Republican support in the U.S. Senate if it makes it out of the House, Republicans will have an opportunity to offer amendments in a process called “vote-a-rama,” whereby Republicans can offer amendment after amendment.

U.S. Sen. Shelley Moore Capito, R-W.Va., is a vocal opponent of the Build Back Better framework and said she would offer three amendments, including an amendment to strip out the pro-union electric vehicle tax credit. In a statement, Capito said she would demand an up-or-down vote on the Kildee/Stabenow provision.

“Should House Democrats eventually pass their partisan reckless tax-and-spending spree legislation, there are three provisions–among many others–that I will be especially aggressive in fighting against due to the tremendously negative and direct impacts they would have on West Virginia jobs,” Capito said in a statement Monday. “If the House fails to defeat this reconciliation bill, I will use every tool available under the rules in the Senate to try to remove these provisions, along with others, that will harm so many West Virginians.”

The tax credit provision, drafted by Michigan Democratic Rep. Dan Kildee and U.S. Sen. Debbie Stabenow, D-Mich., has the support of the United Auto Workers.

“This bill is important to UAW families. By tying subsidies in the Kildee/Stabenow Provision to make sure taxpayer funding goes to domestic auto and battery assembly, and to make sure that these jobs are good paying union scale jobs, we protect our future,” said Ray Curry, president of the UAW. “After all, these jobs of the future that replace traditional engine jobs need to provide the same middle class wages and benefits that built our modern economy. It is vital that the Kildee/Stabenow Provision pass to make sure jobs of the future are comparable to the jobs they replace.”

While the Kildee/Stabenow provision would be good for union automobile manufacturers, such as General Motors, and American-based electric vehicle companies such as Tesla, the provision would put foreign automobile manufacturers with factories in the U.S. at a disadvantage.

One of those companies is Toyota, which has a manufacturing plant in Buffalo in Putnam County. The plant employs 1,479 people and represents a $1.6 billion investment in West Virginia.

Last month, Toyota announced its intentions to invest $1.3 billion towards an electric vehicle battery manufacturing plant in the U.S. That commitment was part of the $3.4 billion commitment to electric vehicle batteries through 2030. In a statement Monday, Toyota said the tax credit would be harmful to consumers without benefiting the environment.

“The proposal to provide a $4,500 incentive exclusively for union-built electric vehicles runs counter to the goal of carbon reduction,” Toyota said. “This suggests that having more electric vehicles on the road is secondary to promoting unionization. We urge Congress to treat all of the nation’s autoworkers fairly and equitably–to let consumers choose the best electric vehicle for them, without being penalized because of their choice.”

The National Automobile Dealers Association came out against the Kildee/Stabenow provision. In a statement in September, the organization said the provision creates an uneven playing field and it “should not be a choice between unionized and non-union workers.”

“NADA supports tax credits to incentivize the purchase of EVs, but cannot support the bill in its current form,” the statement read. “NADA has for many months supported improving the consumer tax credits and has advocated for the broadest application of EV tax credits to help spur wide EV adoption among consumers.”

Negotiation on the Build Back Better framework continues, with a possible vote by Monday, Nov. 15. If it passed the House, the U.S. Senate will have to run the bill through the budget reconciliation process in order to bypass a likely Republican filibuster. Reconciliation allows certain bills with budgetary implications to pass with a simple majority vote instead of the 60-vote threshold needed in the 50-50 Senate.

U.S. Sen. Joe Manchin, D-W.Va., has also been a vocal critic in the Senate’s Democratic caucus of the price tag for the Build Back Better framework, which has decreased from $6 trillion to $3.5 trillion to the current price of $1.75 trillion over 10 years, though other estimates put the price tag at closer to $1.87 trillion.

Manchin has called for a pause in negotiations over the last several months, raising concerns about the possible inflationary costs, the tax increases proposed to pay for the framework, and its effect on the growing national debt.

“As negotiations over the possible Build Back Better bill move forward, the well-being of West Virginia families and workers is Senator Manchin’s number one priority,” said Samantha Runyon, communications director for Sen. Manchin. “This includes opposing any proposal that would disadvantage manufacturing and job creation in West Virginia.”