Lending reports

Auto industry picks up on Capitol Hill advocacy over reports of resurgence of Biden’s Build Back Better (BBB) ​​proposal | Foley & Lardner LLP

Last week, General Motors President and CEO Marry Barra, Toyota Motor North America President and CEO Ted Ogawa, Ford Motor Company CEO James Farley and Chief of Stellantis management, Carlos Taveres, sent a letter to Senate Democratic Leader Chuck Schumer, Senate Republican Leader Mitch McConnell, House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy revamping industry’s advocacy for the inclusion of certain credits to production tax before a possible budget reconciliation package.

This letter follows the recent reports on Capitol Hill that the Senate kingpin passing a budget reconciliation package, Sen. Joe Manchin (D-WV), has had several in-person conversations with Senate Democratic Leader Chuck Schumer regarding a legislative path forward on the proposal.

The letter specifically advocated the inclusion in any final BBB proposal of legislation passed by the House, drafted by Congressman Dan Kildee (D-MI-05) and Senator Debbie Stabenow (D-MI) that would extend and would build on existing tax credits for electric vehicles. . Specifically, the provision would make consumers eligible for a $7,500 credit for qualifying EV purchases for the first five years and an additional $4,500 credit if the EV is manufactured by a unionized facility, and a credit additional $500 if EV uses US-made battery. In addition, the proposal would change the current credit authority to make credits refundable and transferable at the time of purchase rather than consumers having to claim the credit on their tax return. Finally, the proposal would prevent consumers earning more than $400,000 from being eligible and create price limits for electric vehicles to exclude luxury electric vehicles from eligibility.

While the provision enjoys broad Democratic support in the Senate, Senator Manchin, foreign automakers and Tesla have publicly criticized the $4,500 bounty for union-made vehicles.

Additional funding for electric vehicle infrastructure that could be included in the bill includes:

  • Electric Vehicle Supply Equipment Rebate Program – $2 billion for eligible entities for covered expenses associated with EV supplies, including grounding conductors, patch outlets and other accessories, electrical equipment, batteries, among others;
  • Electric Vehicle Charging Equity Program – $1 billion to provide technical assistance, education and awareness, or grants for projects that increase the deployment and accessibility of electric vehicle power equipment in underserved or disadvantaged communities;
  • General Services Administration Clean Vehicle Fleet Program – $5 billion for the GSA to purchase electric vehicles and related infrastructure for the federal fleet (excluding USPS and DOD vehicles);
  • United States Postal Service Clean Vehicle Fleet and Facility Maintenance – $3 billion for the USPS to purchase electric delivery vehicles and $4 billion to purchase related infrastructure; and
  • District of Columbia Clean Vehicle Fleet – $10 million for the District of Columbia to purchase electric vehicles and related infrastructure.

While it’s unclear what would be in a final BBB deal or if it would have the votes to pass the House and Senate, industry representatives are descending on Capitol Hill to push for critical funding and tax provisions that could have significant benefits for their respective industries, particularly provisions that could reduce costs for producers and consumers in the current economic climate.

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