Toyota takes on Democrats’ union-friendly EV tax credit with major U.S. ad campaign

Toyota’s advertisement comes as opposition to the proposed EV tax credit multiplies, with other international automakers, Republican governors from auto states, and the countries of Canada and Mexico criticizing the proposal.

A group of 25 ambassadors to Washington also questioned the proposal in a letter sent Friday to House Speaker Nancy Pelosi, Minority Leader Kevin McCarthy, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell.

The ambassadors, who represent Germany, Japan, France, South Korea, Italy, the European Union and other countries, said the legislation “if implemented, would violate international trade rules, disadvantage hard-working Americans employed by these automakers and undermine the efforts of these automakers to expand the U.S. EV consumer market to achieve the administration’s climate goals.”

Autos Drive America, a group that represents the U.S. operations of international automakers, including Toyota, said the ambassadors’ letter “should make the administration and Congress realize that this is just bad policy.”

“It discriminates against American workers, undermines global climate change goals and threatens our relationships with our trading partners,” Jennifer Safavian, CEO of Autos Drive America, said in a statement. “Tax incentives should be fair and equal for all EVs.”

The White House last week unveiled a slimmed-down $1.75 trillion tax and spending framework that keeps in place the House proposal, including the union-built provision.

The framework’s EV tax credit “will lower the cost of an electric vehicle that is made in America with American materials and union labor by $12,500 for a middle-class family,” according to a fact sheet released by the White House.

The American International Automobile Dealers Association, which represents more than 9,000 international-nameplate dealers in the U.S., criticized the framework and called the tax credit “discriminatory” in a statement last week.

“The inclusion of this $4,500 UAW-only tax credit is an insult to the 673,000 Americans who work in international nameplate manufacturing plants and dealerships,” AIADA CEO Cody Lusk said. “Far from ‘Building Back Better,’ this provision makes it more difficult for Americans to buy green vehicles, as it can only be applied to a handful of the more than 60 electric vehicles available for sale today.”

AIADA said its dealer members are asking Congress and Biden “to stop playing politics with car sales and start working for all Americans — not just those who pay union dues.”