The existential crisis facing Canada’s auto industry may finally be over.
Democratic U.S. Senators Chuck Schumer and Senator Joe Manchin agreed to propose dropping a tax credit plan that favored U.S.-made electric vehicles.
Instead, the Senate Majority Leader and moderate West Virginians are proposing an amendment to US President Joe Biden’s climate and health bill that would expand credit to all of North America.
The amendment includes an expansion of the US$7,500 US consumer credit that was previously limited to US-made electric vehicles, as well as a new US$4,500 loan for used electric vehicles and a new US$10 billion investment tax credit to build eco-friendly manufacturing facilities. clean technologies. from the office of Sumer.
To be eligible for credits, the amendment also requires vehicle batteries to contain a certain percentage of material sourced from US free trade partners.
Canadian International Trade Minister Mary Ng welcomed the change.
“This is good news for Canadian workers, jobs and our manufacturing industry,” she said in a statement.
“As the bill moves through Congress, we will continue to advocate for the importance of maintaining these integrated supply chains and ensuring a greener, more prosperous future for North America.”
Senate vote expected next week
The move was also expected to please automakers such as General Motors, Tesla and Toyota, which are expanding electric vehicle production and were critical of the US Car Buy Act when it was first proposed last year.
There is still a long way to go before the law is passed. Schumer said the US Senate is expected to vote on the proposed legislation next week before it goes to the Democratic-controlled House of Representatives.
This is sure to infuriate Senate Republicans, who will be unwilling to let the Democrats win the legislature as the midterm elections approach in November.
Manchin is a key vote in the evenly divided Senate, but the bill would still need 60 votes to avoid Republican filibuster tactics.
A trade war is averted due to the insanely proposed 🇺🇸 Electric Vehicle Tax Credit, which illegally excludes 🇨🇦 produced vehicles.
New Democratic Senate package @Sen_JoeManchin NOW says the loan covers vehicles “made in North America.”
The bill also includes $2 billion in cash grants to retool existing auto manufacturing businesses “to produce environmentally friendly vehicles, ensuring that auto jobs remain in the communities that depend on them.”
If it becomes law, it will additionally provide up to $20 billion in loans to build new green car factories and $30 billion in additional manufacturing tax credits “to accelerate U.S. production of solar panels, wind turbines, batteries and the recycling of critical mineral”.