November 19, 2021 11:00 AM
This week’s Courier Herald column:
A few months ago I wrote a column suggesting that it was time to accept electric vehicles as mainstream. Too many, mostly from conservative political circles, associate the advancement in technology with overreaching political agendas.
The two concepts can and should be treated separately. Adapting to new technologies and incorporating them into our lives should be commonplace. The rapid pace of technological breakthroughs is only increasing. Less time should be spent pining for “the good old days” and more should be spent preparing for how to address future challenges and successes.
President Biden this week toured a Michigan factory where General Motors will build their next generation of electric vehicles, starting with a re-launch of their Hummer brand as an all-electric line of trucks and SUV’s. His administration wants to expand the current federal incentive program to as much as $12,500 to purchase electric vehicles.
Currently, the federal tax credit to purchase an electric vehicle is capped at $7,500, and is phased out after a manufacturer sells 200,000 qualifying cars. General Motors and Tesla have already reached this limit, so there is no federal incentive offered to purchase cars made from those who pioneered the technology.
This credit currently applies to $30,000 Nissans and to $200,000 Porsches. Given that many electric vehicles have sticker prices well into six figures, the tax credit program predominately benefits upper income taxpayers.
Under framework of President Biden’s “Build Back Better” social spending plan, over a half a trillion dollars is earmarked for clean energy initiatives. While skipping some important details, the plan’s framework would revise the incentive program for those who purchase EV’s with credits up to $12,500. To receive the maximum credit, however, the vehicle must be assembled with union labor.
Let’s talk about what that means for Georgia, specifically. Georgia’s current auto manufacturer, Kia, has a non-unionized workforce in West Point Georgia. SK Battery America in Commerce Georgia will be manufacturing the cells used in Ford F-150’s (built by union labor) and for VW products assembled in Chattanooga with non-union labor.
Published reports this week indicate that Rivian, a maker of electric trucks and delivery vans which is backed by Amazon, Ford, and Georgia based Cox Automotive is likely to select East Georgia for the site of their second factory. Rivian’s workforce is also non-unionized.
Hyundai’s CEO, Jose Munoz, told Automotive News, that the $4,500 additional credit favoring union workers “calls into question Hyundai’s plans to invest in EV manufacturing in the U.S.” Hyundai is the parent company of Kia Motors, and their West Point factory has been the subject of expansion rumors related to EV manufacturing, including the possibility of manufacturing a car there for Apple.
While Conservatives could ask the question “is giving federal tax dollars to upper income taxpayers to purchase a luxury vehicle a proper use – or even the best use – of scarce federal resources?” they won’t be at the table writing this legislation. It’s clear that the social spending bill will have to pass with Democratic votes using the reconciliation process.
The Administration’s position is that federal tax dollars should be used to incentivize workers to purchase a union assembled Ford or GM product rather than a Rivian, Kia, or Volkswagen. This union-made provision would benefit auto workers in other states at the expense of Georgians and Georgia jobs.
With only 50 Democrats in the Senate, every Democratic Senator has veto power of what is and isn’t included in this bill. Senator Joe Manchin has already voiced opposition of this and is thus far taking most of the heat from fellow Democrats for the stalled bill.
Georgia has two Democratic Senators. They’ve been mostly supportive and otherwise quiet on the bill, touting its benefits but side-stepping this specific provision.
Jon Ossoff and Raphael Warnock need to be asked directly on whether they side with the Administration and unions. Or, do they side with the current and future employers of Georgia’s manufacturing workers, and of those workers themselves. If they’re representing Georgia’s best interests, they’ll work to reject this union-made provision in any bill that makes it through the Senate.