Honda exec: The Democrats are playing favorites with their new EV proposal

Editor’s Note: Rick Schostek is executive vice president of American Honda Motor Co., Inc. The opinions expressed in this commentary are his own.

As recent fires, floods and heat-related health crises have demonstrated, climate change is indisputably the threat of our lifetime. Thankfully, it’s clear that much of the world recognizes the threat, as demonstrated by global leaders who gathered in Glasgow, Scotland, for the UN Climate Change Conference.

Of course, certain initiatives will be more successful than others in curbing carbon emissions. At Honda, we were pleased to see the Biden administration’s recent proposals for new federal vehicle emissions standards and more electric vehicles (EV), which he called for in a recently issued executive order. But now Congress is also considering a proposal that will hinder climate progress.

Currently, consumers can receive up to a $7,500 federal tax credit when purchasing an EV. As part of the Build Back Better plan, Democrats in Congress want to provide an additional $4,500 bonus payment above the $7,500, but it would go only to consumers buying EVs made by workers who are part of a union. If it became law, only EVs made by General Motors, Ford and Chrysler would be eligible for the bonus credit.

Environmental and industry experts agree that customer incentives are essential to achieving wide acceptance of EVs on a scale needed to meet the proposed new regulations. But limiting the full tax incentive to EVs made only by the three legacy Detroit automakers would be giving short shrift to other domestic and international automakers whose American workers — who are not unionized — make millions of vehicles a year here in the US.

In fact, in today’s auto industry, a variety of automakers, international and domestic, manufacture vehicles in the US without union labor. Further, international automakers make almost as many cars here in the United States as US automakers do. Honda has been building cars in America for nearly 40 years, and more than two-thirds of the Hondas sold in the US are made in the US by more than 20,000 American associates. Our American story demonstrates that an American-made car does not need to be made by an automaker originating from Detroit. The same can and will continue to be said about American-made EVs.

This proposal is a bad deal for non-union automakers, their American workers, and for the customers who are needed to drive this transition to electrification. The measure would impede EV sales for non-union manufacturers, putting them at a competitive disadvantage. And that could mean lower production volume and fewer jobs for workers; while the higher cost to consumers for vehicles that aren’t eligible for the added credit would actually work against the mission to promote EV sales.

The Prax Lindsey Oil Refinery is pictured in North Killingholme, north east England on October 4, 2021.

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This would be a disastrous detour on our generational journey to environmental sustainability. The climate crisis needs an all-hands-on-deck approach, not federal policies playing favorites from among the many brands that will make EVs in America in order to appease the interests of labor unions. We should stay focused on what unites us: the common goal of deploying zero-emission vehicles to achieve carbon neutrality.

I stand with our 20,000 Honda associates in support of their right to earn a living and right to choose whether to join a union. I can’t be silent while our government debates a plan that says the products they produce are not worthy of equal support for much-needed climate progress.

History has shown that federal policies that pick winners and losers tend to be losers themselves. Especially when a great national goal is at stake, companies need a level playing field to innovate, produce, compete and collaborate without the federal government boosting some players while blocking others. Promoting unionization is a different agenda from promoting EVs, and climate champions on the Hill should reject linking the two as Congress continues to negotiate a reconciliation deal.

Washington policymakers should unite the efforts of all automakers to address the climate crisis.