Toyota Objects to ‘Exorbitant’ Tax Breaks for Rich in EV Plan
Toyota Objects to ‘Exorbitant’ Tax Breaks for Rich in EV Plan
(Bloomberg) -- Toyota Motor Corp. ramped up its objections to proposed tax credits for electric vehicles in the U.S., saying the plan includes “exorbitant” tax breaks for the wealthy.
Toyota is one of several non-unionized automakers complaining about a 10-year plan emerging in Congress to offer incentives of as much as $12,500 for people to buy EVs -- as long as they are built by union-represented workers. Buyers of vehicles from non-union shops such as Toyota, Tesla Inc. and Honda Motor Co. would be limited to about credits of $7,500, a structure that would favor traditional manufacturers from Detroit.
The proposal in the House Ways and Means Committee would give large tax credits on vehicles that cost as much as some people’s homes and “electric cars shouldn’t just be for rich people,” the automaker said Monday in a letter to the panel’s leaders. As proposed, the credits would be available to car buyers with annual incomes as high as $400,000 for an individual, $600,000 for heads of household and $800,000 for couples.
“We urge you to reject using the country’s limited resources to give exorbitant tax breaks to those wealthy enough to buy high-priced cars and trucks,” 11 Toyota executives from 10 states wrote in a joint letter to the committee leaders. Not all of the plan is bad, they said: “The proposed $7,500 tax credit for EVs makes these vehicles more accessible to Americans of modest means, and we support it.”
The proposal unveiled late Sept. 10 was for inclusion in Democrats’ $3.5 trillion tax-and-spending legislation. Additional details include:
- Elimination of the current cap of 200,000 vehicle per manufacturer for tax credit, a decision that would help General Motors Co. and Tesla
- Credit would only apply to vehicles that have a manufacturer’s suggested retail price of less than $55,000 for a car, $64,000 for a van, $69,000 for an SUV and $74,000 for a pickup truck
- Starting in 2027, the $7,500 base credit would apply only to EVs built in the U.S.
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