The Build Back Better Bill Will Give You $12,000 for Buying an Electric Car. Unless It’s a Tesla.

On Friday, Congress passed President Joe Biden’s signature bill, the Build back Better Act. The bill, although smaller than the original proposal, is full of Democratic wish-list items. This includes policies on immigration, climate change and child care. When it gets to the Senate, it will likely face opposition and possibly some pruning. The obvious choice for the chopping blocks is one proposal.

Biden’s plan of reducing carbon emissions is reflected in the bill. It contains a provision providing a $7,500 tax refund to consumers who purchase electric vehicles, whether they are all-electric or plug-in hybrids. The amount is increased by $4500 if it was made in a U.S. unionized factory and an additional $500 if it contains a U.S.made battery.

This provision, in theory, is part Biden’s policy of “Buy American”, which encourages and mandates domestic purchase. The order simply carries over Trump’s protectionism and increases taxpayer costs. But the electric vehicle credit proposal is far more serious. This not only rewards a specific type of product but it also encourages brands.

The bonus of $4,500 worth electric vehicle credits would only be available to vehicles made by Ford or General Motors (previously Fiat Chrysler). The extra money is not available to a Kentucky-made hybrid Toyota Camry driver. If the buyer chooses to buy a Chevrolet Bolt (which was recently stopped because of battery problems), they will receive an additional rebate. The rebate is available for more than 50 of the electric cars currently on sale. OnlyThere are two versions of Bolt that will allow cars to be eligible for extra cash.

The worst thing about this policy is that it doesn’t just give American companies a general advantage (which would be terrible enough), but also gives the United Auto Workers (UAW), labor union a clear benefit. In October, when Biden visited a UAW job training center, he bragged about the electric vehicle proposal, saying “I want those jobs here in Michigan”—rather than in states like Tennessee or Kentucky, where UAW membership is less of a certainty.

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It is evident that the policy’s union component was far more important than its actual consumer incentive. It is evident that the union aspect of the policy was more important than actual consumer incentive. The Wall Street Journal According to a report last week, Rep. Dan Kildee (D. Michigan), co-author of the provision stated that he included bonus funding because he was advised by General Motors & UAW “about how important it is to include an explicitly pro union component.”

Although it is not a panacea, the shift to electric cars can be a great way to reduce carbon emissions and exhaust pollution. However, if this transition is made by executives and not consumers or markets incentives it could jeopardize the overall goal. Customers are being manipulated for political reasons, namely a kickback to Biden’s key constituency.