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Pay for Your Own Damned Electric Vehicle, Please, I’m Working to Pay My Bills

keep-it-in-the-ground

Keep It Grounded In Fact
(American Fuel & Petrochemical Manufacturers)

  

Electric vehicle subsidies largely steal from the poor and middle classes to give to the rich. It’s time to stop this picking of winners and losers.

Electric vehicles (EVs) remain a darling of the “Keep It in the Ground” folks, who tout them as the beginning of the end for fossil fuels. Even setting aside the reality that oil and natural gas are still critical to everything automotive—from seatbelts to the streets they drive on—this uncritical adoration of EVs has led to policy outcomes that are functionally regressive taxes on poor and middle-class families.

Put simply, electric vehicle subsidies and benefits accrue to wealthier households because rich families are vastly more likely to be able to purchase new EVs. This is a natural outcome of the current state of EVs:

  • Electric vehicles cost more than traditional vehicles to purchase and have dramatically lower resale values, making them too expensive (and a poor investment) for many Americans
  • They have range and charging restrictions that make them an unrealistic option for single-car individuals or households, so they are most often purchased as second or third vehicles
  • Wealthy families are more likely to purchase new vehicles, and used EVs do not qualify for the subsidies (up to $7,500 in federal tax credits and up to $5,00 in state subsidies)

Electric vehicles

All of which means that while the cost of these subsidies is largely drawn from middle-class tax dollars, they disproportionately benefit the wealthy.

And these subsidies are not chump change—the federal tax credit is estimated to run about $2 billion over the course of the program, and California alone set aside $140 million for EV subsidies in its 2017-18 budget. That kind of money could fill a lot of potholes, rather than filling upper-income garages with EVs.

And taxpayers don’t stop covering the costs of their wealthier neighbors’ environmental statement vehicle once it rolls off the lot. Since some states offer registration rebates, free HOV, and free parking, once again these wealthy EV owners are free-loaders at the expense of middle-class families. Additionally, since EV owners don’t buy gas (and thus don’t pay the gas tax), those who do are basically covering the cost of road and infrastructure usage for EV drivers. The more EVs there are on the road, the more these costs will grow, eventually requiring higher gas taxes, registration fees, etc. to make up for the shortfall.

electric vehicles

But the real financial burden is just beginning. Unlike traditional gas stations, which were built by the companies that owned them, states are directing utilities to build EV charging stations—and allowing them to pass along the costs to all utility customers. Creating a widespread, entirely new infrastructure of EV charging stations across a state could easily cost hundreds of millions (if not billions) of additional taxpayer dollars. That’s a hefty hit to families’ bottom line, especially since very few of them will directly benefit from these “improvements.”

So working-class Americans are seeing their state and federal tax dollars subsidize the purchase of electric vehicles by their wealthier neighbors; their gas tax dollars covering EV drivers’ highway and HOV lane usage; and now are facing higher utility bills to help make charging more convenient for EV drivers.

As Wayne Winegarden of the Pacific Research Institute recently concluded:

When upper-income households are the only ones benefiting from electric car subsidies, taxpayers should be asking what benefit they are getting from them.

There is also an opportunity cost when taxpayers spend hundreds of millions of dollars on subsidies. These dollars could be put to better use for other programs – or simply left to taxpayers to spend as they wish and boost the economy.

Editor’s Note: There is nothing inherently wrong with an electric vehicle. It is, after all, essentially a natural gas vehicle given that the original power is mostly generated using natural as fuel, but why subsidize such toys? Let the market decide. CNG vehicles make more sense and the cost is coming down. The cost of electric vehicles will also come down if that industry is forced to compete. This is the way it should and must work if we are to pursue sustainable energy policies. Subsidies are for losers. And, yes, that includes Elon Musk.

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7 thoughts on “Pay for Your Own Damned Electric Vehicle, Please, I’m Working to Pay My Bills

  1. Same old story with the electric advocates. It must be an urban culture thing, like food comes from stores and cows don’t have to be killed to eat meat. As in electricity comes from the socket, you know. It’s sustainable.
    It is worth repeating that why would someone burn natural gas to drive a turbine to generate electricity to waste in transmissions lines, to then turn a motor to move a car when one can simply burn the natural gas in the car in the first place to make it move? Unless they don’t understand science, mechanics, and electricity. And what do we do with the soon coming millions of dead batteries? This is what happens when a wish becomes policy without reality. (Sorry about the rhyme, it seems to come naturally, like gas.) Of course this is all made possible by clear cutting forests to put in solar panels and denuding hilltops to put in wind turbines while shutting down carbon neutral nuclear power plants. I don’t think that it’s cool aid that they are drinking, just cheap scotch.

  2. Right on!

    Eventually, EVs will have to share in the real cost of the vehicles, roads, charging stations, etc., or we will have an economic, infrastructural collapse.

    Now even Elon Musk is blaming his financial problems on “big oil”. So if you can’t deliver on your promises, just find someone else to blame, drawing the attention away from your own failure.

  3. 60% of electricity in America is generated by coal+nuclear. So the electric car nuts are living a double fantasy. I just wish they’d do it on their own money.

    • I read a report that said they were considering making the manufacturers add some kind of sound device for that purpose.

      On another note I read a report the other day that people have put down payments on Tesla’s $35,000 model and Elon Musk isn’t building them. Now he’s telling them they will cost $70,000 to build. I can’t find the link to that report right now.

  4. If you are going to invest in a electric vehicle, get one that is a Plug-in Hybrid Electric Vehicle or PHEV. At the very least you almost have no “distance anxiety”. All Electric Vehicles (touted by the green elites) even as fleet vehicles will require the need to have a flatbed tow truck (usually a fossil fueled one) on demand if any of them fall prey to not having a suitable amount of charging stations available and the time to waste charging them if you do have one available.

  5. I bought a 2017 Chevy Volt (a plug-in hybrid) in Dec. 2016 in California for $39,6100.00 out the door including all the taxes. I got a tax credit of $7,500 from the Feds $1,500 from California, a Cosco/GM incentive of $700, + my local utility sends a check for $200/yr as a climate credit; net cost $29,710. When I bought the car the gas tank had 10 gallons of fuel. The car has been driven 12K miles and I have bought 5 gallons of gas (98% local driving). Like a child, these subsidies must end at some point and the product must stand on it’s own. Also there are termination clauses / dates for the tax credits. At present EV’s and hybrids account for about 1% of total US vehicles. Within the next decade plug-in hybrids and EV’s for local driving will account for a much higher percentage of vehicles. They should do so without any more subsidies.

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