Is Elon Musk right to criticize $4500 union-based electric vehicle tax incentive?


Fact Box

  • Elon Musk is a South-African-born American entrepreneur who founded SpaceX in 2002 and became a prime funder of Tesla Motors in 2004. 
  • On Sunday, September 19, 2021, Musk criticized Ford and United Automobile Workers for allegedly “lobbying” a recent electric vehicle bill, leaving Tesla out of the deal.
  • Tesla, along with Toyota and Honda say the bill “discriminates against American auto workers based on their choice not to unionize.”
  • On Friday, September 10, 2021, Democratic lawmakers proposed a bill that would incentivize buyers with $4,500 to purchase electric vehicles made at unionized US companies.
  • According to a recent Pew Research poll, 7% of adults said they had an electric vehicle while 39% were seriously considering purchasing one. In 2020, around 1.8 million electric vehicles were registered in the US.

Andrew (Yes)

While labor unions have done tremendous good for American workers, some issues are more complex than labor matters alone, namely the existential crisis facing every member of the human race: climate change. This proposal would benefit GM and Ford by encouraging consumers to purchase electric vehicles, but popular electric cars made by Honda, Toyota, and Tesla wouldn’t be eligible. 

As the planet continues to warm, largely due to the continued burning of fossil fuels, we need to use every incentive to move drivers to electric vehicles. Freedom of choice is important when making such a large purchase; customers shouldn’t have to pay considerably more for features they want, and our government should be doing everything possible to get more people to give up fossil fuels. This means making the widest possible range of choices available. Some consumers may feel it important to “vote with their wallets” by only purchasing union-made vehicles, and they are still free to do so under this proposal. However, the priority should be on protecting the environment because it affects us all.

While union membership provides many protections for its members, assuming that non-union plants don’t benefit workers is wrong. Toyota, Honda, and Tesla, all of which have traditionally been non-union manufacturers, employ many Americans with good-paying jobs. These employees then spend their hard-earned money locally, building up economies throughout the nation. These workers and their local economies shouldn’t lose out on business simply because their workplaces haven’t unionized for one reason or another. Further, several models, such as the Ford Mustang Mach E, are made in Mexico: Musk is right to criticize incentives that don’t necessarily go to American workers.


Tyler (No) 

Elon Musk's comments surrounding the new union-based manufacturing incentive display his outstanding level of hypocrisy. Musk appears to be fine with the freedoms that come with being anti-union while still complaining about not receiving the full benefits. Elon Musk chose not to unionize to exploit certain 'inconsistencies' in the manufacturing industry; he is in no place to complain when things aren’t currently going his way. Musk recently exposed a loophole in the industry by setting up a sales center on protected tribal land in Nevada. Musk's decision not to be in a union frees him from many guidelines that come with being a union member. 

His anti-union approach has allowed him to take an unconventional approach in paying himself. Musk's salary consists of selling stock shares from both of his companies, partly due to his debt of over 500 million. Musk's claim of excessive lobbying has no evidence whatsoever. Just because US auto manufacturers like Ford and Chevrolet benefit from an incentive on American-made cars does not automatically ensure that they were the driving force behind this decision. 

Joe Biden has expressed his support for unions, and a new administration may be the driving force for this decision. The president began discussing this issue a month ago when commenting on his push for stricter regulations on emissions. He has not left the other companies high and dry as they are still eligible for the same $7,500 credit since the vehicle cap will be removed. Although the bill creates a $4,500 bonus, the current vehicle cap will be removed making the $7,500 vehicle credit available to all parties.

Encouraging unions is a safer bet regarding liability because auto manufacturers will have strict guidelines to follow to ensure that the car is up to standard.

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