MICHauto > Blog > MICHauto in the News > Whitmer Floats Tax Rebate Plan for New Vehicle Sales, Ties Higher Rebates to Union Shops

Whitmer Floats Tax Rebate Plan for New Vehicle Sales, Ties Higher Rebates to Union Shops

December 13, 2023

The Detroit News
Beth LeBlanc
Dec. 13, 2023

Lansing — Gov. Gretchen Whitmer is expanding a plan to award consumers Michigan tax rebates for the purchases of new vehicles from just electric to internal combustion engines as well, with larger rebates tied to the purchase of vehicles built in a union shop.

Under the plan unveiled Wednesday, individuals who purchase a new electric or hybrid vehicle would receive a $2,000 rebate and those purchasing a new gas-powered vehicle would receive a $1,000 rebate. Both rebates would increase by $500 if the vehicle is made at a facility where a union represents workers.

Whitmer plans to ask the Democratic-led Legislature for $25 million in the next budget to fund the program. If implemented, the electric vehicle rebate — when tied with a $7,500 federal credit — could save purchasers up to $10,000 on an EV or plug-in hybrid sale.

The MI Vehicle Rebate plan differs slightly from a plan Whitmer introduced in last year’s State of the State address that limited a $2,500 rebate to electric vehicles and charging equipment. The program did not win funding in the annual budget.

The Whitmer administration on Wednesday said its new proposal would lower costs, “spur vehicle manufacturing” and support auto workers.

“MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys,” Whitmer said in a statement.

The announcement came after slowdowns and layoffs have been reported in Michigan’s auto industry. Ford Motor Co. earlier this week moved to decrease production of its all-electric F-150 Lightning pickup truck. The production change followed a Ford announcement weeks ago that the Dearborn-based automaker would scale back plans for a state-incentivized electric vehicle battery plant in Marshall.

Last week, Stellantis NV informed thousands of autoworkers at its Mack Assembly Plant in Detroit and Toledo Assembly Plant in Ohio they could lose their jobs.

Wednesday’s press release detailing the program included adulation from auto industry groups such as the Michigan Automobile Dealers Association and the Detroit Regional Chamber’s MICHauto group, whose members stand to benefit from Whitmer’s plan if adopted.

Michigan’s transition to electric vehicles “will take time,” but the state’s ability to remain a leader in manufacturing development and adoption of EVs is critical, said MICHauto Executive Director Glenn Stevens Jr.: “Support for new EV sales and for those vehicles made in America is important as Michigan moves forward as a leader in the technology of today and tomorrow.”

In addition to the proposed $25 million in tax rebates, the Legislature and Whitmer administration in recent years have awarded nearly $2 billion in direct, taxpayer-funded incentives, with the majority of the money going to auto companies such as Ford, General Motors Co. and China-based Gotion Inc.

In her release Wednesday, Whitmer noted the proposed rebates come after Michigan’s Big Three automakers and the United Auto Workers reached new contracts in the fall that secured 27% wage increases, cost-living-adjustments and pathways to unionize new battery plants.

On Tuesday, at a Wall Street Journal CEO Council Summit in Washington, Whitmer said the historic UAW contract had put “unique pressure on the companies” when asked whether she was concerned the union’s gains would mean auto companies would eliminate or move jobs out of Michigan to realize savings elsewhere. But Whitmer also said auto companies were dealing with a slower than expected transition to electric vehicles.

“We know that this is a global issue, but certainly I’m not surprised that people are equating the negotiations with that,” Whitmer said. “They may or may not really be related.”

When asked about whether union workers were leaning increasingly Republican, the Democratic governor said the organization is not as “monolithic” as it was 50 years ago, adding: “I think Democrats and Republicans all have to show that they’ve got a plan that is worthy of someone’s support.”