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Vitality minister defends elimination of Tesla tax credit score for electrical automobiles

Energy Secretary Jennifer Granholm on Friday defended the Biden government’s proposal to provide tax credits for electric vehicles from unionized automakers, a move that could rule out non-union Teslas.

“This President is very, very positive about organized labor because organized labor has raised the living standards of so many Americans, and we want to make sure we do everything we can to encourage that the economy and the labor force really focus on the standards for ordinary Americans, “Granholm told CNBC’s Squawk Box.

The tax credit in question would cut the cost of a middle-class family buying an American-made electric vehicle using U.S. materials and union labor by $ 12,500, under the $ 1.75 trillion framework for President Joe’s priorities Biden for environmental and social issues. Biden announced the draft Thursday after working a deal with Democratic Senate MPs. No details were given beyond the White House factsheet.

Elon Musk’s Tesla is the largest maker of electric vehicles and recently exceeded $ 1 trillion in market value, making it more valuable than General Motors, Ford, and several other of the largest global automakers combined. The EV Titan’s workforce is not unionized, so Tesla products are not eligible for government tax credits as suggested by the Democrats.

In March, Tesla was ordered by the National Labor Relations Board to ask Musk to remove a threatening and anti-union tweet because the company’s financial records consider Musk’s tweets to be official corporate communications. In the tweet, Musk said his workforce was free to unionize but said they would gain “nothing” because they would lose stock options and pay union dues if they were unionized.

Granholm said Biden is keen to create a level playing field in economic terms.

“He wants to close the prosperity gap in this country,” she said. “He wants to raise the middle class. He wants a policy that builds the middle class from the bottom up and the middle out, not from the top down.” She said the president believes trade unions can help make this happen.

The Energy Secretary also said she was “totally optimistic” about investing in the $ 23 trillion global clean energy market, which she believes will be there by 2030, and said the US could get a share of that market instead of “standing on the sidelines”.

“We haven’t brought more alternatives online. We haven’t built more technology into the vehicles to make them affordable for everyone,” she said. Tesla is often viewed as a luxury automaker.

“So that requires investment,” said Granholm. “That is why the tax breaks that come with incentives for the private sector to go from the fringes when investing in clean energy are so important to moving this forward.”

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