Pete Buttigieg Defends EV Subsidies, After Elon Musk Criticizes Spending Bill

Speaking at The Wall Street Journal‘s CEO Council Summit on Monday, Tesla CEO Elon Musk pummeled U.S. President Joe Biden’s proposed electric vehicle (EV) tax credit of up to $12,500 USD, a significant chunk of which Tesla and other automakers with non-unionized workforces, like Toyota, will be locked out of — reports Marketwatch.

Musk said the bill shouldn’t pass, and that the government should “just try to get out of the way.”

The $2 trillion USD social spending and climate bill, known as the Build Back Better Act, proposes up to $12,500 in tax credit for EVs, but $4,500 of that total will only be available to vehicles assembled in the U.S. by a unionized workforce.

Musk also went on to express concerns over a provision in a bipartisan infrastructure law that promises $7.5 billion USD in investment for EV charging stations.

Pete Buttigieg, U.S. Secretary of Transportation, was also in attendance at the event and pushed back against Musk’s criticisms on Tuesday. Buttigieg, who has been pushing mainstream EV adoption as of late, said that the automotive industry may be transitioning to electric of its own accord, but “there are three things that will not happen on their own.”

“One: For it to happen quickly enough to meet our climate challenges,” said Buttigieg.

“Two: For it to happen in equitable terms that will actually reach the Americans who stand theoretically to benefit the most from EVs — low-income, urban Americans, rural drivers — but they only capture those benefits if they can afford to buy in the first place. And third, the importance of making sure that this electric-vehicle revolution is made in America and creating good-paying jobs. And, of course, we believe in the benefits of union jobs.”

“These are things that don’t happen on their own. They require policy attention, and that’s part of our focus both in the charging network that is supported out of the infrastructure bill that the president signed, and the tax credits that will make these vehicles more affordable, that are proposed in Build Back Better,” he added.

The former Democratic presidential hopeful noted that a $12,500 tax credit can lower the sticker price of a $40,000 electric truck to “the high 20s,” resulting in “millions of more Americans who can get in on the electric-vehicle revolution.”

President Joe Biden’s Build Back Better bill was passed by the House last month and is now headed to the Senate for approval. Even the Canadian government is “concerned” about the proposed EV tax credit, unsure of how it will affect the economic balance and trade agreements between the U.S., Canada, and Mexico.