> Critics say electric vehicle buyers tend to be wealthier than average Americans and do nod need subsidies.
I love how this gets buried at the bottom after an avalanche of criticism. A free $7500 for the rich and an additional $7500 in revenue for manufacturers. Say what you want about the American political system, it is a master class in manipulation.
"But the environment!"
Assuming someone who buys a $100,000 car is unwilling to spending $107,500 for the same vehicle. Yes the environment would suffer, that is also assuming electric cars (in their current state) are less impactful than fossil fuel vehicles (which isn't the case). In fact, used internal combustion cars should be given a subsidy if you care about the environment.
"But the poor can't afford these cars without it!"
The poor can't afford it with it. How many bolts do you see driving around? I've lived in Asheville NC, Nashville TN, and Portland OR. I've seen 3 bolts total and hundreds of $100k Teslas driving around.
If you're poor, you probably live in an apartment without an electric car charging station. You probably can't afford a new car so you buy used which is exclusively internal combustion. So how does this tax credit affect you at all?
---
I'm intensely fascinated by conversations and how they are framed to manipulate opinion. Depending on your political slant, you could have easily framed this as "tax breaks for the wealthy" or "an attack on green energy" or "supporting domestic manufacturers" or "hurting domestic manufacturers".
>that is also assuming electric cars (in their current state) are less impactful than fossil fuel vehicles (which isn't the case)
Is that true? Got a reference?
The problem is that external costs like pollution are not being priced into the cost of ICE vehicles by, say, a pollution tax. This limited subsidy is a backhanded way of doing that.
I don't see the issue with rich people benefiting from it, because it's exactly those rich people buying 100K Teslas that are paying for the cost of driving research into better battery technology and cheaper cars so everyone benefits from cleaner air and reduced global warming.
Ironically this might have been true in the past when your only EV option was a Tesla; however the Chevy Bolt is selling like mad, the Chevy Volt continues to sell well and you have quite a few choices either out or coming to market in early 2018, including the VW E-Golf, Hyundai Ioniq, Kia Soul EV to name just a few that are under 30k.
Removing the EV Credit now makes no sense; perhaps a better approach is to limit the EV Credit to cars that cost under 50k; this would ensure the credit isn't used on luxury EV's and allow the market to continue to grow.
Of course things get framed to manipulate opinion.
Now, I actually don't mean this with any snark, but how is what you're doing any different? This tax credit applies to plenty of vehicles sold for much less than $100,000.
Come on. $100k vs $107k cars are a disingenuous comparison. They turn $30k cars (entry level luxury) into $23k cars (middle class, right in there with the Civic, Camry, Corolla, Accord, etc). If this is your objection, let’s phase it out for cars over a price threshold.
Yep. I am pretty left leaning on environmental and economic issues. But the tax credit from the start was a redistribution of wealth upwards. A side effect being that more hybrid cars were bought.
Yea, I'd be far happier scrapping this and putting an even bigger credit given some requirements. As a fake example: %10 discount on electric cars @45k. %15 discount for electric cars at 25-45k. 25% discount for cars below 25k.
Way too much I'm sure, but that's besides the point. The lowest tier there is one of the most important imo. Because you're absolutely right, buying used combustion cars is what credits like this should be targeting, imo. Conceptually at least, I clearly know nothing of what I talk about.
Also it is a tax credit.. meaning you only get the $7,500 if you actually owe at least $7,5000.. AFTER the standard deduction. Basically, anyone with under ~$100k annual income would not even receive the whole credit, if any at all.
Based on EPA estimates of global greenhouse gas emissions, converting every US passenger vehicle to electric, assuming those vehicles are then driven for at least seven years, the net reduction to global emissions is roughly 1%.
> It's all bullshit and I can't stand it anymore...
For those of us in Southern California, even if electric cars aren't "carbon neutral", they are still a win for two reasons.
1) Electric cars that are stopped don't burn energy. Now, with the new engines that can turn themselves off and on quickly, that's becoming less of an issue, but there is still some amount of idling in any combustion engine.
2) The pollution involved with electric cars is concentrated, industrial point-source. This is FAR easier to mitigate than the diffuse, individual pollution sources represented by combustion cars.
Continuing the theme of governments raising taxes that disproportionately affect the poor in the name of the environment: California's new gas tax is stupid.
In what is already one of the most expensive states to live in the per gallon gas tax increased by 40% on Wednesday. That means that the total state and federal taxes come out to about 77 cents [1] per gallon. While 77 cents doesn't seem like much, consider that the average cost per gallon of gas in California is around $3.10 [2], which puts the effective tax rate at around 25%.
A 25% tax rate is absolutely insane in a country where you need a car to get around. Take into account the 53 cents per mile the IRS uses as its estimator of the cost of driving a vehicle [3], the average one-way commute distance is about 8 miles [4], and the average fuel economy for California drivers is around 24 miles per gallon [5], this works out to about $10 per day in just regular vehicle expenses, or around $300 per month.
For the poor in California this is just another example of how expensive it can be to be poor.
I am going to receive 7500 dollars of your money, my money, and everyone's money, come January for a purchase I need no assistance in making.
how is that fair. I am taking it because it is there and financially it makes no sense not too.
this is pure gift to those well off. it has nothing to do about protecting the environment. it was a gift to GM initially and because a gift to not only the well off but any manufacture who wanted to take it.
>that is also assuming electric cars (in their current state) are less impactful than fossil fuel vehicles (which isn't the case)
Unless your electricity is generated by burning peat, in terms of CO2 emissions, this is false.
Of course, the correct solution to the emissions problem is to reduce the number of miles Americans drive. But you'll never hear a House Republican say that.
This also doesn't take into account that most of the energy used to power/charge these EV cars is coal based, which is orders of magnitude more dirty than burning gasoline.
I'm with you. That seems to be the the reality of politics, it's persuasion wars where it's really hard to get ahold of the facts, and even with the facts it's hard to tell what the better option is.
If we just eliminated subsidies in the oil & gas world, I can promise you the economy will move towards renewable extremely fast.
Make it a phase out of two - four years..., it would boost sales of EV's and our entire transportation network much more quick than EV tax credits would, AND, it would be a fair market for once!
It would spur innovation, create many jobs, we would lead the world once again in regards towards moving to a 100% renewable economy, etc... so many things.
The fat, old pigs/politicians of the O&G industry need to be shown the door... It's 2017... we can do this now.
Not to mention the extra long term taxpayer savings on currently increasing medical costs...
> Make it a phase out of two - four years..., it would boost sales of EV's and our entire transportation network
Doesn't work. Stuff simply does not scale that fast. Maybe the big automobile companies can scale up EV production, but there's still the battery bottleneck (which prompted Tesla to build the Gigafactory, but I am not aware of any other project even remotely near that scale - and Tesla sure as hell won't sell its batteries to competitors, they got enough demand with their cars + the energy storage stuff).
Public transportation will only be buses that are able to scale. Even light/street rail takes years to get politically approved and then financed, and actual proper intercountry transportation takes decades to build - if it gets built at all given how expensive it is.
Not being reliant on it would have a massive effect on the Middle East. Whatever stability they have now would go. That aspect would need a lot of care, and the West’s track record is not good.
That will never happen though, since the biggest O&G subsidy is the fact that the global oil market is denominated in US Dollars which coincidentally also happens to be the source of almost all US soft power.
Of course, electric cars are typically charged via some kind of fossil fuel so to a certain extent they also benefit from these subsidies -- just not as much.
I'm generally in favour of allowing the market to do its work. That said, in the case of emissions, it is too expensive to attribute and process torts, so the true cost of emissions is rarely ever passed on to even very large polluters who have damaged a lot of property. This is why the original mandate of the EPA is so legitimate.
I mean it's kind of the point of tax reform. You eliminate deductions that only wealthier people benefit from and lower the rate over all. You'll see a lot of deductions go away that are good on their own but in aggregate with all the other deductions give us such a massively complex system.
Yeah, thats just the point guys, the middle & middle upper classes lose their deductions and the rich lose the estate tax, it all comes out for the little guy right?
Sadly, most of the deductions that disproportionately benefit wealthy people aren't going anywhere (mortgage interest, IRA/401k/tax-free savings, FSA/HSA, etc.) since they appear to benefit everyone and foster the american dream of home ownership.
These subsidies were almost on the way out for GM & Tesla anyway.
The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009)
There is a chart here [1] which shows GM and Tesla hitting the 200k sold mark in about 3 months. Sucks to be Faraday Future, but first-to-market is real.
Why do articles like this always paint reductions in a negative manner? This is actually a positive. The credit should be scraped immediately. The credit was an initial incentive to help encourage drivers to adopt electric vehicles, and it worked very well. Electric vehicles are everywhere especially in major cities; they are huge in my city San Diego. However, now that they are mainstream there is no reason to continue with tax breaks. Electric drivers will continue to drive them, and their share of the market will continue to expand with or without the tax breaks as more people convert. Lets us that tax money to pay for other important things like paying off our debt or funding sustainable energy solutions.
To be fair ceasing to take people's money and ceasing to give people free money isn't ideologically the same thing (even though both result in people having more money).
Good. Both tax and subsidy distort market price and lead to deadweight loss.
And you can't realistically argue that some endeavors deserve taxpayer support while others have to rely on access to financial markets to get over the hump in their runway. The treasury department should not be picking winners and losers. Leave that to investors that have to put some of their own skin in the game.
The minimum damage to the economy occurs when a tax exactly matches the value of negative externalities pushed out onto the public, to be spent exclusively on cleaning them up, and when a subsidy matches any positive externality that the company hasn't managed to capture yet.
It isn't hard to think that any subsidy for electric vehicles should be scrapped, and within the bounds of the same public concern, replaced with a tax on emissions from combustion vehicles, to be used to make those engines already in service less polluting. The tax phases itself out, as people buy new vehicles that pollute less, and as they make already-paid-for repairs and retrofits on older vehicles.
With the subsidy, you have to turn it off manually whenever the desired economic effect has been achieved.
I have no idea what the motivation is behind subsidizing oil & gas. Encourage people to use engines instead of slave labor? Maybe use gas instead of coal? Whatever the reason is, it may have once favored the best side of a two-sided race, but with additional competitors joining the field, it no longer necessarily helps the best of them. That's why taxing the negative externalities almost always makes more sense, because the tax falls away without further intervention when that competitor exits. Like licensing horses to be inside a municipality, to cover the cost of cleanup when they poop on city streets. When people stop riding into town on horses, and start driving cars, the horse tax goes away without further effort.
There is also the possibility that an industry may never get over the hump in its runway. Do you want to keep it on life support forever? And if not, how do you decide when to pull the plug?
I can provide one data point: I drive a 20 year old Honda Civic but I'm looking at getting another car (with automated shifting for spouse). With the $7500 federal tax credit + $2500 CA credit I was considering a Chevy Bolt. Now I'm about 99% certain I won't, I'll probably buy a Honda Civic, now that they went back to making hatchbacks.
I don't know about environmental impact (I bike to work 4 out of 5 weekdays) but that's one lost electrical vehicle purchase. I could have charged it at home for "free" (I have solar panels) but it's way too expensive without the credits.
I love electric cars but I do not think it is fair for my money to be taken to subsidize a car for someone else. I had no say in the matter. The same goes with solar subsidies. If you want an electric car or solar, you should pay for it, not the taxpayer.
The correct solution here is not to get rid of the credit, but to introduce a phase out as income rises, so middle class car buyers benefit, but wealthy car buyers don't.
But that won't happen because the real goal of the proposal is to support the oil and gas industry, not to remove a subsidy to wealthy car buyers. As the article states, even the auto industry has come out against this.
Taxes are even less palatable than subsidies. A carbon tax is a great idea, but before you can implement it, you have to fight the people who hate taxes, the people who hate environmentalism, and the companies whose products you're now directly attacking. Subsidies for the alternative are a compromise solution meant to work around the unfeasibility of passing a carbon tax.
Because it makes it cheaper to buy that car, which makes it more likely for someone to buy it, which increases sales, which allows Tesla to invest in improving technology such as batteries and also to achieve economies of scale, which would allow prices to come down, which would lower the number of ice vehicles, which would lower the use of oil as an energy source, which would lower CO_2 emissions (and also pollution, international competition for resources, and the volatility of the mideast), which would lower the concentration of CO_2 in the atmosphere, which would allow more of the sun's irradiation heat to escape earth, which would slow the rise of global average temperature, which would lower the risk of widespread famine, death, war, impoverishment, migration, and mild unease that usually accompany major changes in the environment such as a countries' ability to grow food, or weather Austria needs a navy or not.
[+] [-] rukittenme|8 years ago|reply
> Critics say electric vehicle buyers tend to be wealthier than average Americans and do nod need subsidies.
I love how this gets buried at the bottom after an avalanche of criticism. A free $7500 for the rich and an additional $7500 in revenue for manufacturers. Say what you want about the American political system, it is a master class in manipulation.
"But the environment!"
Assuming someone who buys a $100,000 car is unwilling to spending $107,500 for the same vehicle. Yes the environment would suffer, that is also assuming electric cars (in their current state) are less impactful than fossil fuel vehicles (which isn't the case). In fact, used internal combustion cars should be given a subsidy if you care about the environment.
"But the poor can't afford these cars without it!"
The poor can't afford it with it. How many bolts do you see driving around? I've lived in Asheville NC, Nashville TN, and Portland OR. I've seen 3 bolts total and hundreds of $100k Teslas driving around.
If you're poor, you probably live in an apartment without an electric car charging station. You probably can't afford a new car so you buy used which is exclusively internal combustion. So how does this tax credit affect you at all?
---
I'm intensely fascinated by conversations and how they are framed to manipulate opinion. Depending on your political slant, you could have easily framed this as "tax breaks for the wealthy" or "an attack on green energy" or "supporting domestic manufacturers" or "hurting domestic manufacturers".
It's all bullshit and I can't stand it anymore...
[+] [-] belltaco|8 years ago|reply
Is that true? Got a reference?
The problem is that external costs like pollution are not being priced into the cost of ICE vehicles by, say, a pollution tax. This limited subsidy is a backhanded way of doing that.
I don't see the issue with rich people benefiting from it, because it's exactly those rich people buying 100K Teslas that are paying for the cost of driving research into better battery technology and cheaper cars so everyone benefits from cleaner air and reduced global warming.
[+] [-] evo_9|8 years ago|reply
Removing the EV Credit now makes no sense; perhaps a better approach is to limit the EV Credit to cars that cost under 50k; this would ensure the credit isn't used on luxury EV's and allow the market to continue to grow.
[+] [-] JosephLark|8 years ago|reply
Now, I actually don't mean this with any snark, but how is what you're doing any different? This tax credit applies to plenty of vehicles sold for much less than $100,000.
[+] [-] closeparen|8 years ago|reply
[+] [-] beal|8 years ago|reply
[+] [-] notheguyouthink|8 years ago|reply
Way too much I'm sure, but that's besides the point. The lowest tier there is one of the most important imo. Because you're absolutely right, buying used combustion cars is what credits like this should be targeting, imo. Conceptually at least, I clearly know nothing of what I talk about.
[+] [-] Cshelton|8 years ago|reply
[+] [-] RayVR|8 years ago|reply
[+] [-] bsder|8 years ago|reply
For those of us in Southern California, even if electric cars aren't "carbon neutral", they are still a win for two reasons.
1) Electric cars that are stopped don't burn energy. Now, with the new engines that can turn themselves off and on quickly, that's becoming less of an issue, but there is still some amount of idling in any combustion engine.
2) The pollution involved with electric cars is concentrated, industrial point-source. This is FAR easier to mitigate than the diffuse, individual pollution sources represented by combustion cars.
[+] [-] colemannugent|8 years ago|reply
In what is already one of the most expensive states to live in the per gallon gas tax increased by 40% on Wednesday. That means that the total state and federal taxes come out to about 77 cents [1] per gallon. While 77 cents doesn't seem like much, consider that the average cost per gallon of gas in California is around $3.10 [2], which puts the effective tax rate at around 25%.
A 25% tax rate is absolutely insane in a country where you need a car to get around. Take into account the 53 cents per mile the IRS uses as its estimator of the cost of driving a vehicle [3], the average one-way commute distance is about 8 miles [4], and the average fuel economy for California drivers is around 24 miles per gallon [5], this works out to about $10 per day in just regular vehicle expenses, or around $300 per month.
For the poor in California this is just another example of how expensive it can be to be poor.
[1]: http://www.sandiegouniontribune.com/business/energy-green/sd...
[2]: http://www.californiagasprices.com/Prices_Nationally.aspx
[3]: https://www.irs.gov/newsroom/2017-standard-mileage-rates-for...
[4]: https://www.marketwatch.com/story/here-are-the-typical-commu...
[5]: http://www.latimes.com/business/autos/la-fi-hy-cars-fuel-eco...
[+] [-] Shivetya|8 years ago|reply
how is that fair. I am taking it because it is there and financially it makes no sense not too.
this is pure gift to those well off. it has nothing to do about protecting the environment. it was a gift to GM initially and because a gift to not only the well off but any manufacture who wanted to take it.
it needs to die.
[+] [-] vkou|8 years ago|reply
Unless your electricity is generated by burning peat, in terms of CO2 emissions, this is false.
Of course, the correct solution to the emissions problem is to reduce the number of miles Americans drive. But you'll never hear a House Republican say that.
[+] [-] pdeuchler|8 years ago|reply
[+] [-] BadassFractal|8 years ago|reply
[+] [-] Cshelton|8 years ago|reply
Make it a phase out of two - four years..., it would boost sales of EV's and our entire transportation network much more quick than EV tax credits would, AND, it would be a fair market for once!
It would spur innovation, create many jobs, we would lead the world once again in regards towards moving to a 100% renewable economy, etc... so many things. The fat, old pigs/politicians of the O&G industry need to be shown the door... It's 2017... we can do this now.
Not to mention the extra long term taxpayer savings on currently increasing medical costs...
[+] [-] ellyagg|8 years ago|reply
[+] [-] mschuster91|8 years ago|reply
Doesn't work. Stuff simply does not scale that fast. Maybe the big automobile companies can scale up EV production, but there's still the battery bottleneck (which prompted Tesla to build the Gigafactory, but I am not aware of any other project even remotely near that scale - and Tesla sure as hell won't sell its batteries to competitors, they got enough demand with their cars + the energy storage stuff).
Public transportation will only be buses that are able to scale. Even light/street rail takes years to get politically approved and then financed, and actual proper intercountry transportation takes decades to build - if it gets built at all given how expensive it is.
[+] [-] lostlogin|8 years ago|reply
[+] [-] pdeuchler|8 years ago|reply
[+] [-] rconti|8 years ago|reply
[+] [-] ghouse|8 years ago|reply
[+] [-] smnrchrds|8 years ago|reply
[+] [-] microcolonel|8 years ago|reply
I'm with you on the subsidies though.
[+] [-] awinder|8 years ago|reply
[+] [-] NeonVice|8 years ago|reply
https://www.forbes.com/sites/drillinginfo/2016/02/22/debunki...
[+] [-] stusmall|8 years ago|reply
[+] [-] smileysteve|8 years ago|reply
The Nissan Leaf and Chevy Volt aren't particularly upper class cars. Neither is the Model 3.
[+] [-] fhood|8 years ago|reply
[+] [-] matt_wulfeck|8 years ago|reply
[+] [-] awinder|8 years ago|reply
Wake up.
[+] [-] s0rce|8 years ago|reply
[+] [-] fishcolorbrick|8 years ago|reply
The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009)
There is a chart here [1] which shows GM and Tesla hitting the 200k sold mark in about 3 months. Sucks to be Faraday Future, but first-to-market is real.
[0]: https://www.irs.gov/businesses/plug-in-electric-vehicle-cred...
[1]: https://www.pluglesspower.com/learn/forecasting-the-sunset-o...
[+] [-] PatientTrades|8 years ago|reply
[+] [-] dangoor|8 years ago|reply
This would be a real shame, though, because it does help level the playing field a bit given how much our country invests in oil.
[+] [-] BoorishBears|8 years ago|reply
[+] [-] Kyragem|8 years ago|reply
If that is so why are republicans proposing to cut the estate taxes?
hypocrites.
[+] [-] mythrwy|8 years ago|reply
[+] [-] logfromblammo|8 years ago|reply
And you can't realistically argue that some endeavors deserve taxpayer support while others have to rely on access to financial markets to get over the hump in their runway. The treasury department should not be picking winners and losers. Leave that to investors that have to put some of their own skin in the game.
The minimum damage to the economy occurs when a tax exactly matches the value of negative externalities pushed out onto the public, to be spent exclusively on cleaning them up, and when a subsidy matches any positive externality that the company hasn't managed to capture yet.
It isn't hard to think that any subsidy for electric vehicles should be scrapped, and within the bounds of the same public concern, replaced with a tax on emissions from combustion vehicles, to be used to make those engines already in service less polluting. The tax phases itself out, as people buy new vehicles that pollute less, and as they make already-paid-for repairs and retrofits on older vehicles.
With the subsidy, you have to turn it off manually whenever the desired economic effect has been achieved.
I have no idea what the motivation is behind subsidizing oil & gas. Encourage people to use engines instead of slave labor? Maybe use gas instead of coal? Whatever the reason is, it may have once favored the best side of a two-sided race, but with additional competitors joining the field, it no longer necessarily helps the best of them. That's why taxing the negative externalities almost always makes more sense, because the tax falls away without further intervention when that competitor exits. Like licensing horses to be inside a municipality, to cover the cost of cleanup when they poop on city streets. When people stop riding into town on horses, and start driving cars, the horse tax goes away without further effort.
There is also the possibility that an industry may never get over the hump in its runway. Do you want to keep it on life support forever? And if not, how do you decide when to pull the plug?
[+] [-] d1zzy|8 years ago|reply
I don't know about environmental impact (I bike to work 4 out of 5 weekdays) but that's one lost electrical vehicle purchase. I could have charged it at home for "free" (I have solar panels) but it's way too expensive without the credits.
[+] [-] meritt|8 years ago|reply
[+] [-] maxerickson|8 years ago|reply
https://www.cnbc.com/2017/07/28/tesla-is-running-out-of-fede...
So people at the front of the line would be eligible for the full amount.
The ongoing drop in battery costs is likely a bigger factor than the rebate though.
[+] [-] mattbeckman|8 years ago|reply
[+] [-] rusher81572|8 years ago|reply
[+] [-] danans|8 years ago|reply
But that won't happen because the real goal of the proposal is to support the oil and gas industry, not to remove a subsidy to wealthy car buyers. As the article states, even the auto industry has come out against this.
[+] [-] kozak|8 years ago|reply
[+] [-] chc|8 years ago|reply
[+] [-] maxerickson|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] matt4077|8 years ago|reply
But you kinda knew that already, right?