German carmakers have criticized US president Joe Biden’s plans to offer bigger subsidies to buyers of American electric vehicles from unionized manufacturers than to those purchasing imported models or those made by non-unionized workers.
As part of the White House’s Build Back Better bill, which is awaiting Senate approval, new battery-powered and hybrid cars in the US will attract up to $12,500 each in tax credits.
Of that maximum, $4,500 will be available only to those buying a car made in the US by a manufacturer with a unionized workforce. A further $500 of the full subsidy applies only to cars with a USmade battery.
“The market economy works best when you have clear and [the] same rules for all market participants, a level playing field,” Ola Kallenius, chief executive of Daimler, told the Financial Times.
German electric-vehicle subsidies are available to all buyers regardless of where the cars are made. Kallenius urged the US to follow suit and “let the market decide”.
The German car lobby, the VDA, has also criticized the plans.
“Unilaterally designed funding criteria contradict transatlantic cooperation, which we would do better to intensify rather than slow down,” said VDA president Hildegard Müller. “We now need joint coordinated efforts to achieve climate goals. New trade conflicts must be avoided. ”
German manufacturers produced more than 742,000 cars in the US last year, according to the VDA, and employed more than 60,000 people. Volkswagen’s Audi and VW brands are among the top sellers of plug-in hybrid and pure electric cars in the country, as is BMW.