U.S. President Joe Biden and many members of the democratic party are in favor of an even larger electric vehicle federal tax credit. The tax credit exists to incentivize American consumers to cut down on carbon emissions by purchasing an electric vehicle. The Build Back Better bill features a $12,500 electric vehicle tax credit proposal. Here’s why the Ford Mustang Mach-E wouldn’t qualify even if the bill were to pass.
Joe Biden wants EVs to be built by unionized workers in America
If wanting American consumers to buy electric vehicles after centuries of buying gas vehicles wasn’t enough, President Joe Biden has some additional caveats to his new proposed federal electric vehicle tax credit. The federal EV tax credit currently stands at $7,500 for eligible vehicles. There are also local tax incentives for purchasing an electric vehicle, depending on where you live.
As a part of the proposed Build Back Better bill, President Joe Biden hopes to grant a $12,500 EV tax credit to eligible vehicles purchases. There’s just one problem. According to Road Show by CNET, eligible vehicles must be produced by unionized workers in the U.S. While this is a nice sentiment and would increase quality American auto manufacturing jobs, the reality is that few vehicles meet this requirement.
Electric vehicles only account for a tiny percentage of the total new-vehicle market share today. American-made electric vehicles produced by unionized workers account for an even smaller percentage of the total new-vehicle market share.
These requirements disqualify Tesla vehicles (which could benefit greatly from a discount). Tesla has been openly anti-union, and chances are the company’s vehicles won’t meet Biden’s requirements any time soon. More importantly, they disqualify the electric vehicle of the year, the Ford Mustang Mach-E.
The Ford Mustang Mach-E isn’t American-made
I know, it’s a gut-punch, but the Ford Mustang Mach-E isn’t American-made. The American automaker currently produces the popular electric SUV in China and Mexico. Ford has massive American plants, but moving production of the Mach-E will be very costly and may not benefit Ford enough financially to justify such a big change.
While a cheaper Mach-E could help boost sales dramatically, the Mach-E is selling just fine as is. The electric SUV doesn’t necessarily need the help of a huge federal tax incentive, but if the objective is to sell as many electric vehicles as possible, then the Mach-E should be eligible.
The best-selling EVs aren’t eligible for the proposed $12,500 EV tax credit
The current best-selling electric vehicles are the Tesla Model Y and Tesla Model 3. The next in line are the Chevy Bolt EV and EUV models. The Chevy Bolt models have been recalled by GM for battery fire issues. Ironically, the Bolt was one of the few EVs that would have qualified for the proposed $12,500 EV tax credit.
The Build Back Better bill’s proposed EV tax incentive could be great for America if it passes. Electric vehicles would be more accessible for the average consumer. But what use is the proposed incentive if it doesn’t include the most popular EVs?