The House Ways and Means Committee will vote on Tuesday on the proposal which is a part of a broad tax measure in a planned $3.5 trillion spending bill.
The bill would make General Motors Co (NYSE:GM) and Tesla (NASDAQ:TSLA) Inc eligible again for EV tax credits after they previously hit a cap on the existing $7,500 incentive. It would also create a new smaller credit for used EVs.
The bill would make most electric vehicles eligible for a $7,500 tax credit and then give automakers who assembled vehicles with union labor in the United States an additional $4,500 tax credit and $500 for vehicles meeting U.S. domestic content requirements, including having battery cells manufactured in the United States.
The proposal to give union-made vehicles higher credit has already drawn criticism from foreign automakers like Honda Motor Co.