Do you drive an EV? If so you know how quiet it runs. Stealth. The sounds of silence.
Why is there a "quiet state-by-state fight" to eliminate credits on these clean cars? Have our general needs changed around reducing air pollution levels? Is there something now inherently wrong with building efficient cars? Do we want to throw out all the new technology around hybrids and EV's and go back to the old ways of making cars?
Sure, if we are complete fools. If we want to cut off new, successful companies like Tesla at the knees. If states are so fixated on short term policies versus good future planning. Sure, let's shut off all the promise of a cleaner, brighter future to make car co's rich and happy, and put everyone in gas-guzzling SUV's.
Behind the Quiet State-by-State Fight Over Electric Vehicles
When Georgia repealed its generous $5,000 tax credit on electric vehicles in July 2015, and instead slapped a $200 registration fee on electric cars, sales quickly tumbled.
In
the month before the repeal, nearly 1,300 electric vehicles were sold
in the state. By August, those sales had all but evaporated — to just 97
cars.
It was a hint of what would come.
Today,
the economic incentives that have helped electric vehicles gain a
toehold in America are under attack, state by state. In some states,
there is a move to repeal tax credits for battery-powered vehicles or to
let them expire. And in at least nine states, including liberal-leaning
ones like Illinois and conservative-leaning ones like Indiana,
lawmakers have introduced bills that would levy new fees on those who
own electric cars.
The
state actions could put the business of electric vehicles, already
rocky, on even more precarious footing. That is particularly true as gas
prices stay low, and as the Trump administration appears set to give
the nascent market much less of a hand.
In
coming days, the Trump administration is widely expected to roll back
stringent federal regulations on vehicle emissions, one of the biggest
environmental legacies of President Barack Obama. The changes would give
American carmakers less incentive to produce more battery-powered cars.
There are also concerns among advocates of electric cars over the fate
of a $7,500 federal tax credit on the vehicles, a major catalyst for
sales.
But
while the battle in Washington gets much of the attention, the most
direct attack against electric vehicles, and in some cases hybrid
vehicles, is quietly being waged at the state level.
In Colorado, a bill
that would end income tax credits for owners of electric and
alternative-fuel vehicles is working its way through the legislature. In
Utah, lawmakers voted this month against extending the state’s tax
credit for electric cars.
The measure in Colorado has been backed publicly by Americans for Prosperity,
an advocacy group founded by the conservative billionaire brothers
David H. and Charles G. Koch, whose wealth is founded on their
petrochemicals empire.
A
handful of other states, including Illinois, Pennsylvania and
Tennessee, have already let their incentives expire. That has brought
down to 16 the number of states that offer financial support for buyers
of electric vehicles. That number once approached 25.
“It’s
baffling,” said Matt Jones, a Democratic state senator in Colorado, who
opposes the move to repeal the tax credit. “It’s very
counterproductive.”
It
is unclear how many of these measures will pass. In Colorado, for
example, support for clean vehicles has long enjoyed bipartisan support.
Still, the backward slide in incentives “is going to be a big issue and
crash this market further,” said Jessica Caldwell, executive director
for industry analysis at Edmunds.com.
Even
with the incentives, overall sales of electric vehicles are only about 1
percent of the American market. To start making a real dent in the
market, Ms. Caldwell said, “electric vehicles still need to be
subsidized for a significant amount of time.”
A
slowdown in the country’s shift toward battery-powered vehicles could
leave the American auto market a global laggard, electric vehicle
proponents warn. They say a similar situation played out a couple of
decades ago, when American car companies stayed away from small cars,
leaving a big opening for Japanese companies.
Sales
of electric vehicles are estimated to have jumped more than 70 percent
last year in China, which now has the world’s biggest market for
electric cars, with about 630,000 units on the road. Canada, France and
Sweden each had growth in electric vehicle sales of 50 to 70 percent in
2016, compared with the year before, according to EV Sales, which tracks global sales numbers.
A slower transition could also have big consequences for the United States’ carbon emissions.
Transportation now regularly emits more earth-warming gases into the atmosphere than any other sector, according to the federal Energy Information Administration. Last year, it overtook the electric power sector for the first time since the late 1970s.
That makes switching to cleaner vehicles imperative in further reducing America’s carbon footprint, environmentalists say.
“Instead
of buying fuel from halfway round the world, you’re plugging in and
maybe you’re producing the electricity on your roof with solar,” said
Joel Levin, executive director of Plug In America, a nonprofit organization that promotes electric cars.
“It’s
not just about the environment,” Mr. Levin said. “These vehicles are
also about being a leader in this new technology that everyone agrees is
coming. If the U.S. isn’t a leader in this technology, we’ll be buying
them from someone else.”
Advances
in battery technology, both in quality and price, have allowed
companies to bring more affordable battery-powered cars to market.
General Motors’ Bolt EV has a 238-mile range for less than $30,000, after the $7,500 federal income tax credit. Tesla plans to introduce the Model 3, a 215-mile-range car, for under $30,000 after federal tax credits.
For
these lower-cost models, which seek to attract buyers beyond the
comfortably wealthy, those incentives are critical to sales. But each
automaker has a 200,000-vehicle allotment for the federal tax credits, a
limit that Tesla and GM will reach by 2018, according to some
estimates. It is unclear whether that limit will be extended, making the
state credits even more important.
Laura
Toole, General Motors spokeswoman, said that incentives were “still
necessary to help build the E.V. market to greater volumes.”
A
Tesla spokesman declined to comment. But its chief executive, Elon
Musk, has said that he supports getting rid of incentives, but only if
other subsidies are repealed, including support for fossil fuel
industries.
The uncertainties mean global forecasts for the global electric vehicle market are all over the map. But one particularly bold study,
released last month by the Grantham Institute at Imperial College
London and the Carbon Tracker Initiative, predicts rapid growth in
electric vehicles to make up 35 percent of the road transport market
worldwide by 2035.
Electric
vehicles alone could reduce oil demand by two million barrels a day by
2025, the study forecasts. That would be about the same dip that caused
the oil price collapse in 2014 and 2015.
(Other projections are decidedly less gung-ho in their projections. The International Energy Agency, for example, expects oil demand to rise into the 2040s unless there is decisive global action to curb fossil fuel use.)
In
general, though, the projections underscore the threat that electric
vehicles pose to the oil and gas industries — and those with big
investments in those areas — and those who back a rapid shift away.
The
bill in Colorado, which would end income tax credits of up to $5,000
for buyers of electric cars and as much as $20,000 for commercial
trucks, cleared its first barrier in a senate committee Feb. 28.
The
bill, which shifts the money for the tax credits toward fixing
Colorado’s infrastructure, is supported by the Kochs’ Americans for
Prosperity, as well as the Independence Institute, a libertarian think tank based in Denver that has been financed by coal, oil and gas companies.
They
argue that the government should not be choosing between technologies
or companies. They also argue that electric vehicle owners tend to be
wealthy and do not need financial help.
State
funds should be used for roads and bridges “instead of giving millions
of dollars annually to rich guys,” Amy Cooke, director of the Energy
Policy Center at the Independence Institute, wrote in a blog post.
In
testimony before Colorado lawmakers, Rudy Zitti, deputy state director
at Americans for Prosperity, said, “By allowing these subsidies to
continue, you are unfairly choosing to use our tax dollars to benefit a
finite group of individuals and corporate interests.”
Georgia
offers an example of how some of these arguments played out. For a few
years, attempts to repeal that state’s electric vehicle incentive, first
introduced in the late 1990s, went nowhere. Then in 2015, the repeal
was rolled into a larger transportation bill, which promised freshly
paved roads and shored-up bridges.
The
bill passed, together with the repeal, with little debate on the
incentive itself; amid a budget shortfall, legislators were more
interested in securing money for infrastructure projects.
In
a close vote, also Feb. 28, Utah’s House of Representatives voted
against extending the state’s tax credit for electric vehicles after
legislators there argued that those credits cost too much.
The
$1,500 credit for buyers of long-range electric vehicles “does not make
sense economically to me,” Scott Sandall, a Republican representative,
argued. A bill to extend that credit for five more years failed by one
vote in the chamber.
Kevin
Emerson of Utah Clean Energy called the defeat disappointing. “If we
don’t reinstate it, it sends a message that Utah is no longer open to
business for E.V.s.,” he said. “This is so important for Utah. We’d seen
it as important in the long term.”
Several
other states have imposed new registration fees on electric vehicles.
Lawmakers pushing for the fees say that because owners of
battery-powered cars do not pay gasoline taxes, they should help pay for
infrastructure in some way.
Since
2011, 10 states have adopted special fees of up to $200 a year for
electric vehicle or plug-in hybrid owners. At least nine more states are
considering similar charges.
In Indiana, a bill that would establish a $150 annual fee for electric vehicle owners was introduced in January. A similar bill has been presented in Kansas, also for a $150 fee, and Montana is debating a $300 fee. Even California is looking at imposing a $165 yearly car registration fee on zero-emissions vehicles.
Despite
the setbacks, a broad coalition between environmentalists, electric
vehicle manufacturers and some electrical utilities has redoubled
efforts to keep the electric car momentum going.
This month, for example, the local utility Xcel Energy announced
that it was teaming with Nissan to offer up $10,000 incentives on the
automaker’s Leaf battery-powered car for Colorado residents.
Nissan said that the incentive programs are “instrumental” to building acceptance among American drivers.
And California’s Zero Emission Vehicle Program,
which will soon require automakers to sell electric vehicles in nine
other states that have adopted California’s own stringent emissions
rules, could also keep states on course. Environmentalists worry,
however, that the Trump administration could challenge California’s
unique authority to set pollution targets.
Some
states are bolstering their support for electric vehicles. In a
long-awaited move, buyers of electric and plug-in hybrid vehicles in New
York are set to receive a $2,000 rebate.
“We’re
very excited to see this kind of rebate launched in New York,” said
Gina Coplon-Newfield, who directs the electric vehicle program at the Sierra Club.
She
said the steady growth in electric vehicle sales despite lower gas
prices, and the proliferation of electric and plug-in models now
available, showed both consumer and industry interest in the technology.
“Are
we worried about what the federal government will likely try to do?
Yes,” she said. “And we’re concerned that many similar bills are coming
out in many states at the same time.”
She added: “But do we think that’s going to kill electric vehicles? Absolutely not.”
Still, electric vehicle owners in states pulling back on incentives are left in the lurch.
Alfred
Richner, a financial services worker in Atlanta, vowed to go electric
over a decade ago, when oil prices in the city spiked after Hurricane Katrina.
“In 2005, I promised myself my next car would not use gas,” he said.
It
took seven more years for Mr. Richner to find an electric car he was
happy with — a new 2012 Nissan Leaf. And he got a great deal — $26,000
before sales tax — from a local dealer desperate to get rid of the car,
he said.
With the federal and state subsidies, he paid $15,500 out of pocket.
“It
was solid, it was comfortable, it was futuristic,” Mr. Richner said.
“And the dealer was willing to negotiate, because he couldn’t sell it.
And then the dealer said Georgia had a $5,000 tax credit. I couldn’t
believe it.”
A
year later, he bought Mitsubishi’s i-MiEV electric car for his wife,
again using federal and state incentives. (But his wife, who declared
the Mitsubishi car ugly, now drives the Leaf, leaving him to make his
52-mile round-trip daily commute in the i-MiEV.)
He
had planned to upgrade his Nissan Leaf in 2015. But that plan was
foiled when he couldn’t track one down in Georgia before the tax credit
expired.
“It’s a great car,” he said. “I guess by then, everyone wanted it. And then it all stopped.”
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