Congress should end electric car subsidies, not expand them

From The Hill

By Liam Sigaud, opinion contributor — 11/27/18 02:00 PM EST

The views expressed by contributors are their own and not the view of The Hill

In 2008, in an effort to coax more Americans into buying “green” vehicles, the federal government instituted the electric vehicle (EV) tax credit.

By law, the EV tax credit begins to phase out – and eventually expires – once a manufacturer has sold 200,000 qualifying electric vehicles. Tesla has already reached this threshold, and General Motors is expected to cross it before the end of 2018. Understandably, these large electric vehicle makers are fighting to maintain this government handout, and some lawmakers have proposed removing the cap on the EV tax credit altogether.

Not only should Congress reject proposals to uncap the EV tax credit, lawmakers would do well to repeal it entirely.

The EV tax credit is anti-competitive and prevents the free market from operating correctly. By favoring certain vehicles through the tax code, the federal government picks winners and losers.

Thanks to the EV tax credit, car buyers can qualify for up to $7,500 in government subsidies when buying an electric vehicle. In 2016, 57,066 individual taxpayers claimed $375 million in EV tax credits. These subsidies overwhelmingly benefit the wealthy. Tesla buyers, for example, had an average household income of $293,200 in 2013. A study in 2015 found that electric Ford Focus buyers had an average household income of $199,000. By contrast, the median household income in the U.S. in 2015 was $56,516.

Overall, the top 20 percent of income earners receive about 90 percent of EV tax credits. Additionally, data from 2014 indicates that over 99 percent of total EV tax credits went to households with an adjusted gross income above $50,000.

Read the full story here.

174 thoughts on “Congress should end electric car subsidies, not expand them

  1. Why would anyone want an electric except as a second or third car for virtue signalling? As that is clearly what is driving the market for BEVs in the US, why should wealth greens be subsidized?

    • A plugin hybrid will reduce you gasoline consumption by about 70% or more, depending how you drive it.

      • Yeah, but hybrids don’t have the same problems as plug-in pure electrics. And it matters what your driving profile is, with hybrids being good only in stop-and-go traffic, and worse than a straight gas or diesel if not, or if one has high speed sections of the drive.
        I understand Prius’ are bad at speed, and in Texas, there are a lot of long, high speed drives.

        • My minivan get 33 mpg on flat, high speed driving. That is better than the pure gasoline version.

          • Living in Germany (no highway speed limit ) I get driving at an average speed of 200km h 10 liters of ( DIESEL ) per 100 km my tank holds enough to get me 1,000 km + electric ? for idiots ,

          • A diesel will better that by a handsome margin, would myou have bought tat if you had to pay full price? In Europe where diesel is a standard option the real one is cheaper than the heavyweight hybrid. You have to keep in the light use envelope where the regenerative braking outweighs the drak of all teh extra battery and machinery.

          • Yeah, it’s probably 5mpg better than the gasoline version, but at what extra cost? In 100,000 miles of driving you’d burn 3,030 gallons of gasoline, while the straight gas model would burn 3,571. At the $2.25 I saw today in Texas for regular gas, that’s a savings of $1217.25, probably still less than the extra price you paid for the virtue-signaling hybrid.

        • US EPA certified driving range for Tesla Model S varies between 215 miles and 295 miles at an average cruising speed of 65 mph. More than enough for the typical daily commuter to need to charge only once a week … though most have daily access to a charging system at home.

          This results in a tremendous savings in fuel costs, as well as maintenance costs (electrics are far simpler and easier to maintain than internal combustion engines and their transmissions.

          • Before I retired, my commute averaged well over 450 statute miles per week, depending upon the office to which I was assigned. (It’s the reason I retired – I liked the people, I liked the work, I couldn’t take the 405 anymore.)

            Yes, let’s all pay $US75,000 for a car when I can get a really fine, low maintenance, low polluting Honda Civic for ~$18,000. Takes a LOT of years to make up the difference.

        • “Prius’ are bad at speed” in what way? Precipitous decline in mpg above 80 mph but I hit 90 and often 100 when I make 50 mile commutes with my A/C blasting in the Florida heat…no complaints.

          • I rented a Prius once, never again:
            -Ask the engine to do anything and it’s way to noisy. In general the entire car was noisier than I thought it would be.
            -Underpowered. It could barely pull the coast range at speed (not very tall mountains, passes are 2kish feet), forget passing anyone in the passing lanes. Did OK on the flats, I lived in Orlando for a year and it is the definition of flat so I can see how you don’t know what your missing. My biggest mission while I lived there was just try and find a hill, any hill.
            -Not comfortable seats for me or the person who went with me.
            -I expected to be able to travel farther on battery power since it says, I believe, 30 miles(?) on battery power. What good is battery range if the engine kicks on automatically when you hit 5mph… If a car can’t maintain 5mph on the road it’s generally because it’s dead and needs a tow.

            After a four day rental the Prius experience left since a bad taste in my mouth I have no intention of ever crawling inside another one.

        • I have an old (2008) Prius that doesn’t plug in, and get about 43 miles per gallon in a mixture of highway and city driving, and have no trouble doing 70 (the speed limit) on the highway, although it revs high going uphill.

          In general, hybrids that use gasoline as the main power source with battery backup can achieve low gasoline consumption without transferring pollution elsewhere. Once a car is plugged in, the electricity it consumes requires fossil fuels to be burned elsewhere, unless it is generated by nuclear fission.

      • But plug in hybrids still require gasoline to travel any distance greater than 40 miles. If gasoline is eliminated like A OF and the Socialist Democrats want, your plugin hybrid will only be good for 40 miles…a useless toy

        • Well, I doubt gasoline will be eliminated.
          BTW, 40 miles would get me to work and back everyday. That is no toy.

          • But 40 miles won’t get most people to work and back in the Bay Area or the LA basin with how heavy traffic will affect range. So…still a toy only slightly better than a Golf Cart

          • Rich mens toy, I do 100KMS each way and at highway speeds with either a/c or heat no Ev will do that drive, I go past EVs every day, Teslas and volts on the inside lane doing 90kph while the real cars are in teh other 2 lanes doing 120.

          • Commute from Santa Rosa to San Francisco 54 miles (one way) 108 miles round trip
            Commute from Novato to Concord 34 miles (one way) 68 miles round trip.
            Commute from Sonoma to Richmond 42 miles (one way) 84 miles round trip.
            My home is in Santa Rosa but my work location is Sacramento so my weekend commute is 93 miles one way.
            My current commute (temp assignment) is 18.6 miles one way so 37 miles round trip with no side trips or stops it would only Just work with no room for alterations and no stops along the way.
            Still insufficient…

            And that 23 miles takes an hour average so just how much charge remains at your destination for your trip home??

        • The internal combustion engine is notoriously inefficient. You’re lucky if you get 20 percent efficiency out of it. 75 % of the energy goes straight out the exhaust and the radiator. An electric motor can be produce an efficiency in the 95% range. If you measure the overall efficiency from well to wheel, depending on how the electricity is generated, an electric car runs at about 40 percent efficiency while an ICE driven car is 17 percent efficient. While I’m not an eco nut, I hate to see our precious fossil fuels being needlessly wasted. Bring on the electric car and burn our fossil fuels in a high efficiency combined cycle power plant to generate the juice.

          • For all it’s inefficiencies, it sure as hell is useful and central to the commuting needs of the overwhelming majority of first world populations.

          • And tie ICE will get you 250 miles before you need to refill (5 minutes) while the hybrid will get you 35 – 40 before you will be glad you have the ICE alternate. An electric will get you 200 IF you can spend twice to 4 times the price of the ICE but still requires hours to recharge for the next 200.

          • Burn fossil fuels in a combined cycle power plant to generate electricity that will require $billions of power plants, $billions of transmission lines, $billions of distribution upgrades to charge a battery that needs to be replaced every 10 years? Why not burn the natural gas in vehicles and save a few $trillion of capital over the next 20 years? I know, combined cycle gas plants are twice as efficient as a NG powered vehicles. But the economic and environmental advantages still favor NG vehicles over EV’s (Don’t believe the EIA BS analysis).

          • Trebla – Actually, your efficiency number on all electric vehicles is grossly low .. it is closer to 9+0% efficiency in translating stored electrical energy to mechanical energy at the wheels. Lithium ion batteries are virtually 100% efficient (energy out vs. energy in) and virtually all electric motors run somewhere between 95% and 99% efficiency.

            Even hydrogen fuel cell vehicles, which are significantly less energy efficient that battery electrics run somewhere between 60% and 70% efficiency.

            As for internal combustion engines, most run at 25 to 30% efficient. As you wrote, most of the chemical energy in hydrocarbon fuel is simply wasted as heat to the atmosphere.

        • What part of “depending how you drive it” did you not understand? Just because it doesn’t suit your driving needs does not make it a “toy” when it does fit the driving needs of others. The average commute for most urban and suburban drivers is less than 40 miles. For them, a hybrid would be perfectly fine as a commuter car. Rural commuters who have to drive long distances to get to their job sites not so much. Either way, the government shouldn’t be subsidizing it.

          • I suppose if your commute to work is less than 20 miles one way, and you do not need to make any side trips on the way home, and you don’t need to use it after you get home, and you have a 240 volt dedicated circuit at home to recharge it (480V if you have a Tesla), and you have an alternate vehicle at home to use while it’s recharging, then it could be considered a useful toy.
            Remember Hybrids will become useless as toys if AOC and the GND come about and eliminate hydrocarbon powered ICE cars. Your Hybrid will become an electric car with a 35-40 mile renge period.

          • Bryan you are talking nonsense. while 40 miles is the electric range of a hybrid, they still also have a much longer gas range. so as far as your belabored examples that show you don’t know what you are talking about go:

            1) if you happen to need to take a side trip on the way home that would take you beyond the 40 mile electric range, well that’s why you have gas power to lean on as well. you’d be screwed with an All electric, so I can see referring to the all electric vehicle as a “toy” or a “glorified golfcart”, but the hybrid can do everything a regular gas powered car in regards to range because it’s not limited to just the electric range.

            2) if you need to use it after you get home, again, you have the gas power to take over where the electric leaves off.

            3) you don’t need a dedicated circuit. Yes, it’ll take longer to change – but that can be accomplished while you sleep.

            As far as AOC and the GND goes, if that ever comes to pass, the usefulness or not of hybrids will be the least of this countries problems.

          • John,
            Exactly my point
            hybrids are only useful BECAUSE they have the ICE available to make them more than just 40 mile limited toys.

            What do you do with your hybrid if AOC and ther GND act to eliminate fossil fuels?
            Your hybrid becomes an electric only with no ICE back up and is only good for 40 miles. Hope you have a recharger at work

            We definitely need to keep hydrocarbon energy sources a part of the mix until they are no longer viable or cheaper options become available.

            an $80,000 Audi or $120,000 Tesla to get the range are not viable options.
            Fossil Fuels are still king

          • John,
            Exactly my point
            hybrids are only useful BECAUSE they have the ICE available to make them more than just 40 mile limited toys.

            so you admit they aren’t toys (thanks to having ICE). so stop calling them what you admit they are not.

            What do you do with your hybrid if AOC and ther GND act to eliminate fossil fuels?

            I don’t currently have one but if I did I’d still be able to commute to and from work with it. What do you do with you 100% ICE care after AOC and their GND act to eliminate fossil fuels? use it as a lawn ornament? See you didn’t think through you question, now did you.

            Your hybrid becomes an electric only with no ICE back up and is only good for 40 miles. Hope you have a recharger at work

            Don’t need one. Like the vast majority of urban and suburban commuters I have a less than 40 mile round trip to work.

            We definitely need to keep hydrocarbon energy sources a part of the mix until they are no longer viable or cheaper options become available.

            on that we agree.

      • Oddly over long ranges , a normal car is more fuel efficient because it does not have to drag a ton of batteries around for when they would be used .

        • Not oddly, that is not true.

          A typical ICE powered car has an engine and transmission that weighs many times that of an automotive electric motor .. and you are also forgetting the weight of the hydrocarbon fuel and fuel tank. Typical weights for a sedan or small SUV is 20 gallons of gas – or 130 pounds, plus another 60 or 70 pounds of tank – at least 200 pounds above the empty weight of the vehicle. The battery pack on a Tesla Model S is about 1,000 pounds.

          Considering the total weight of the fueled vehicle, an all electric vehicle like Tesla Model S weighs only a few hundred pounds more than does a typical ICE-powered sedan of similar capacity with a full gas tank. Considering the vast increase in vehicle efficiency and cost of operation and cost of maintenance, a Tesla Model S is a huge bargain.

      • There is nothing “green” about electric cars. they cannot even be built without fossil fuels.

      • Joel, I have one vehicle. A 7.3 liter Ford super duty with over 200,000 miles. I live in an 11,000 lb. fifth wheel and move around. How much diesel will I save and what electric vehicle can I buy that will allow me to save it.

    • Ever driven one?
      The answer is simple ∴ because they’re FUN to drive.
      That’s the other reason why people want them.

      Just saying,
      GoatGuy ✓

      • Ever driven a V8? They are fun to drive.

        Not completely practical in all situations, but even idling with a V8 is a lot of fun. (Try idling with a Telsa… YAWN)

        Now why I am completely open to the idea of being able to enjoy your motoring, I feel you are also reinforcing the point that electric cars are NOT being purchased as practical day to day vehicles, but by people who want something ‘FUN to drive’.

        Or, to put it another way, purchased by people who have enough disposable income to purchase a second (or third) car JUST for giggles.

        Or, to put it another another way, ‘Rich People’.

        And why there is nothing wrong with being rich, this argument does completely compliment the one being placed in the original article – EV subsides support the financially well off, and if you can afford to purchase a vehicle JUST for the giggles of driving it, then you can probably afford to purchase it WITHOUT having Mr and Mrs Tax Payer give you a discount.

        Just saying.

        • Yes, the “YAWN” factor has a lot to do with the concept of actually DRIVING an automobile.
          I recall years ago the geniuses at CarTalk (Click and Clack) opining about the impact which Toyota was having on the market. The cars were so reliable that driving one was BORING.

          Fast forward a few decades and after 15 years, our 2000 Aero 9-5 SAAB 5 speed finally died and we were in the market for a new one. Unfortunately, SAAB could not comply as GM bought and buried them for their tech patents. Last Swede standing was Volvo. Found out that Volvo does not sell manual trans in the US. Could not even pick one up in Europe and bring it over.

          Wound up with a V60 wagon with a 6 speed auto. Kinda sporty and handles OK, but no match for the 15 year old turbo tech and suspension in the SAAB. Did test drive a Honda hybrid, but almost fell asleep…

          PS: Did NOT get a TB either…

      • Ever see a Bling person walking near one and doesn’t realize it’s there because they can’t hear it?

        • I recall my late father, a Londoner since a small child, telling me stories of how frightening many people found electric trams because they were so quiet that most people in the hustle-bustle ofa big town/city, didn’t hear them coming until the last moment! We’ve already had one recorded death in the USA ofperson killed by a “driverless” car, whatever next?

        • Ever see a Bling person

          No, but then I tend to stay away from cities in general and the parts of cities where “bling” is a thing in particular. :p

      • Sure fun for 5 mins, then you have to creep around to a charging spot. useless for most people just rich mens toys.

    • Fourth “car.” Gnarly-tired jacked-up golf cart for dragging hay out to the beasts. Cowboy Tesla, no subsidy!

  2. Bribing people to buy cars using taxpayer money is simply virtue signaling at the taxpayers’ expense.

        • Instead of answering the question, you just call people names. Your mother teach you that?

          • Okay, pay attention. We will try and keep this simple.

            The car still costs ‘X’ to manufacture. If we ignore profit margins then we can assume the sell price of the car is going to remain constant. Let us call this ‘Y’.

            So Mr and Mrs Car Buyer are going to pay Y for their car at market rates. However the government comes along and says ‘hey, we want you to buy this car so much, we are going to give you a tax break’. The price is now Y – TB or Z.

            Or, the variation, the government goes to the manufacturer and says ‘hey, we really want you to make these, we are going to give you a tax break so you can make them cheaper.’ They then offset some of the manufacturing expense and work out they can now sell the car at a lower cost and still make the same profit. (X – TB + profit now equals Z… more or less. Your accountant may vary.

            Now the point to pay attention to is the TB part. Again your accountant may vary and exactly how this TB is paid (tax incentives, direct funding, slabs of beer, having their lawn mown every Tuesday) still means that in real terms the overall government budget is now smaller by whatever amount this TB is. They might be transferring cash, they might be reducing the taxes the manufacture or purchaser or both have to pay, but it is either tax money going out, or less tax money coming in. And that reduction in the overall amount of tax money the government has means they have less money to spend on more useful things like brand new F35s.

            Also, and this is the main thrust of the original argument, because only ‘rich’ people are the types buying these sorts of cars, only ‘rich’ people are getting the tax break.

            Now it can be argued that only ‘rich’ people deserve tax breaks because they are the only people who really pay the big tax, but it can also be argued that ‘rich’ people are the ones who should be paying tax in order to help poor people not starve to death on street corners. We are digressing somewhat from simplified tax into social-political view points, but the point is that somewhere tax payer money is either paid directly or not collected from people JUST to help them buy fancy electric cars.

          • Craig from Oz – Nicely put. But there is one argument that can justify some kind of government incentive: An incentive to use an EV in urban areas. There is still pollution (the real kind, not the pretend kind) from FF vehicles in cities. It’s nothing like as bad as it used to be, thanks to the honest efforts of authorities over the years. An honest effort to encourage the use of EVs, where they would genuinely help, would have merit. Unfortunately, honesty in the environmental field now tends to be suppressed by the bullies with the loudest voices.

          • With modern cars, very little of that pollution is coming from cars.
            Most of it coming from industry, and households.

          • MarkW – I did think that cars were the major influence, but without the numbers. Do you have numbers for industry and households vs cars?

          • The wind energy production “tax credit” was operated as an actual handout in many circumstances. Direct cash was offered up front. Sorry, but that’s using taxpayer money. Someone else has to come up with more, some time, to make up for the difference.

          • Jim , just because you can point to once instance where government handing out money (a subsidy) was misnamed as a “tax credit” does not turn all tax credits into subsidies. a true tax credit is simply the government *not taking* more of your money that you earned where as a subsidy is the government giving you money that other people earned.

        • markl;

          An unhelpful comment, and that’s being generous. Also, Jeff Alberts is quite right, a tax credit is not a subsidy. The government not fleecing you of money you have earned (tax credit) is not the same as the government handing you cash you never had (subsidy).

      • Jeff

        A tax credit is exactly the same as a subsidy.

        And remember folks, when the government has to pay you to buy something, you know it’s going to suck.

        • Yes and no. They’re similar (same goals) but not the same (different mechanism). A subsidy is government taxing money from A (the tax payer) and giving it to B (the one being subsidized). A tax credit is the government not taking the money from A in the first place regardless of who B is. And A only gets the credit if (s)he does certain actions (in this case buy an EV) whereas a subsidy goes to B regardless of whether or not there is a market willing to buy B’s product. so similar but not the same.

          • The EV tax credit functions as a direct subsidy to the seller.

            Remember the basic supply and demad curve. The market price of the EV is the sells price net of the tax credit. ie where the supply and demand curve meet. The buyer effectively purchases the car at the market price while the seller receives $7k of proceeds above the market price.

          • Joe, I think we are talking two different credits here. The “Bribing people to buy cars” tax credit everyone else is talking about is the up to $7,500 tax credit that *buyers* get on their income tax. I’m not sure what tax credit you are referring to.

          • John – we are discussing the same credit . It’s true that the buyer gets the credit on their tax return . But the seller is the one getting the real benefit of the credit. – via the buyer being willing to pay 7k more than the market value because the buyer gets the “rebate/ tax credit” from the IRS – in effect the subsidy goes to the seller

      • Money is fungible. Taxes are money.
        When you extend a tax credit to one person and not another, you transfer the burden of supporting the functions that the tax which would otherwise have been collected if not for the tax credit to other tax payers. Those tax payers must then pay more to support the same level of services than they would have without you receiving a tax credit.
        Thus, tax credits are equivalent to a transfer of taxpayer money to the recipient, all other things being equal.
        But you knew that.

        • similar does not equal same. the end goals might be equivalent, but the mechanisms are different (see my other posts on the subject).

        • No, all taxpayers pay more, even those who received the credit, if the delta is built into the personal tax rates. And actually, no one pays more, they just up the debt ceiling. So your great grand kids will pay for it. Or, the congresscritters could simply spend less. Nah, that’s just crazy talk.

      • The tax credit is a subsidy that is being paid by the taxpayers as a whole.

        A second point is the Seller is getting most of the benefit of the buyers tax credit via the higher sales price of the vehicle. The market price of the vehicle is close to the cost of the EV after the subsidy – ie where the supply and demand curve meet. In other words, the seller is able to sell the car for approx $7k more than than the point in which the supply and demand curve meet. Same is true for most all the manufacturing and energy tax credits in the tax code (US title 26)

      • Government’s expenses don’t go down just because they didn’t collect as much money from you.

      • Are you being serious or just do not know how the tax systems works? Giving someone a tax credit means they pay less taxes and therefore someone else must pay more. Of course politicians really don’t seem to care about deficit spending and the Left certainly doesn’t. In their minds money is a common property resource.

    • And the California PUC allows the electric utility to charge all rate payers for the costs of installing charging stations. Yet another subsidy.

  3. So is it the usual “Save the Planet”” stuff, plus vote for me cos I am good.

    Or is it because of the real pollution affecting some cities ?


    • Pollution is bad in Europe. Toyota has a plugin hybrid that you can select to run on gasoline until you get to the city center, then switch over to the battery. And, you can charge your battery with your gasoline engine as you drive to the city. Imagine a big city center without gasoline engines. Zero pollution and very little noise.

      • It isn’t the technology that is bad, it is the subsidy that distorts the market by picking winners and losers over existing technology that paid its own way. It is a penalty against innocent people, usually poorer people who wind up paying more taxes to pay for that subsidy or lose their jobs in a factory the Govt has decided to penalize because of their political bent. Let everything compete on their own merits without any distortion.

        • Pollution devices on automobiles in the USA were only installed as a result of govt mandates. Same for safety features. The car companies fought these changes tooth and nail. Consumers would have gladly bought cars without these features because they would have been much cheaper.
          If safety features were not mandated in all cars, only the wealthy would be able to afford to drive safe cars.
          The marketplace would never have allowed these improvements to occur. Think how dirty the air would be in US cities and how unsafe cares would be without govt intervention.

          • Apples and oranges, sort of. In your example of safety and pollution control, all cars got the same treatment, and it wasn’t directly subsidized by Gov’t. Everyone who bought a new car had to pay the same price for the safety and pollution equipment. With EV’s, it appears that the wealthier folk get more of an ‘incentive’, especially for a Tesla Roadster or Model X. If the subsidy was just for a cheaper smart car EV of some type, that would be one thing, but to subsidize a luxury car is another. I am all for EV’s and especially the range extender EV with a smallish dedicated ICE to charge the batteries. That is the best of both worlds, especially for a multi purpose town car that can take a highway trip for an extended range. I will buy one of those as soon as they make one available in a Jeep 4×4 but I don’t think a subsidy or tax credit is the right way to do it for reasons I already mentioned.

          • Govt mandates come with unintended consequences. Consider the mandated side mirrors. They create aerodynamic drag which reduces overall efficiency and they have blind spots which make lane changes unsafe. The manufacturers, including Tesla, would like to replace the side mirrors with blind spot cameras but they can’t because of govt mandates.

          • To the extent that consumers were demanding safety, the automakers were providing it.
            The idea that only government cares about people is one of the insidious lies of the socialists.

          • Safety features? Like what?

            Safety belts have been standard since I was a kid…even though it was rare for me to be in a state that required wearing them.

            ABS (which is not mandatory but almost universal) and airbags (side-impact is almost standard but not mandatory) were selling points in the late 80s and early 90s. Car companies rushed to adopt airbags after fighting them in the late 70s (40 years ago). Safety became a consumer priority. Now it’s things like rearview cameras and lane-assist that are selling-points.

            The US automakers used to have power. Now they need gov’t assistance.

        • “…It isn’t the technology that is bad, it is the subsidy that distorts the market by picking winners and losers over existing technology that paid its own way…”

          I don’t think people bought Teslas for the tax credit.

          Even for cheaper EVs and hybrids, it seems like they come-out with an MSRP of, say, $40k and a $7.5k tax credit brings the price down to $32.5k…then when the tax credit ends, suddenly the MSRP is around $32.5k.

          It is a sham that has benefitted the wealthy along with carmakers.

      • I don’t quite understand. Rich politicians favor the big cities so you get a car which pollutes the suburbs – so it won’t pollite in the city? That doesn’t save anything – just moves the pollution to politically less favored locations.

        • “you get a car which pollutes the suburbs – so it won’t pollite in the city? That doesn’t save anything – just moves the pollution to politically less favored locations.”

          If “the dose makes the poison,” diluting it does save something.

      • Also imagine city center traffic and blind pedestrians trying to navigate where autos make no sound

      • Joel: “Pollution is bad in Europe”

        Please can you explain what you mean by this for specific locations, with specific pollutants and their sources? Europe is a big and varied place and European air quality has never been better. Turning over the car fleet to EV will make little to diffence to air quality compared to turning it over to current spec ICE vehicles.

      • The table below shows how air pollution emissions have been declining in the UK since 1970.

        POLLUTANT 1970 1980 1990 2000
        Sulphur dioxide 6460 4854 3719 1188
        Nitrogen oxides 2501 2581 2759 1737
        Particulates (PM10) 542 358 309 178
        Volatile Organic Compounds (VOCs) 2172 2338 2603 1596
        Carbon monoxide 8843 7669 7445 4025

  4. RE: “Not only should Congress reject proposals to uncap the EV tax credit, lawmakers would do well to repeal it entirely.

    True dat! Call your congress critters and give them the message directly.

    • Not necessary no bill would ever pass the the Senate nor get signed into law by Trump.

      Bigger fish to fry.

  5. Liam Sigaud, in his article, has a minor typo:

    By favoring certain vehicles through the tax code, the federal government picks winners and losers.

    With the rare exception of a few major infrastructure projects, I’ve never known the government to be able to pick winners. If it needs government backing, it’s a loser QED.

    Many more ventures are started and fail than successful ventures, but the successes are in spite of government, not because of it.

  6. Why is it when it’s something we don’t like, a tax credit is a subsidy. But when it’s something we do like, it’s not. Be consistent people.

    • Good question, Jeff. Made me stop and think.

      In the case of EVs, all vehicles don’t get the same tax credit extended to all buyers. So the government is definitely encouraging a particular action via the tax code. The Feds are favoring an outcome by saying in effect, “If you do what we want you to do, you can keep more of your own money.”

      As best as I can determine that’s not a subsidy, but it is a case of government picking losers, because if EVs were winners there would be no need for a government tax incentive to get people to buy EVs.

      I have to agree with you on being careful when using the term ‘subsidy’. I have no quibbles with the criticisms of government interference in the automotive marketplace via tax policy. The tax credit to buyers has an effect similar to a direct subsidy, but it’s not technically a subsidy, near as I can tell.

    • I’m with you, Jeff. Tax policy ought to be very simple; every year, the government totals up its budget and divides that budget by the number of registered voters and each registered voter gets a bill and pays his share.

      Those who do not pay, of course, don’t vote.

  7. I bought a plugin hybrid minivan this year and will get the 7500 dollar tax credit. I will also get 1600 dollars credit from the state of MD, and 700 dollars to defray the cost of installing my 240 volt charger. These tax credits along with a large price reduction for buying last year’s model off the showroom floor, made this car cheaper than a gasoline SUV.
    My van gets 33 miles on a battery charge and, for a van (Pacifica) gets an astounding 33 miles per galleon on the interstate (36 mpg if I stay under 65 mph). In town driving is almost never more than 33 miles round trip, and the car charges up completely in about 2 1/2 hours after I get home, ready for another trip.
    After driving hybrid, I think it is criminal to drive with traditional brakes, generating heat rather than generation current to recharge your battery. So primitive.
    I have driven this car for about 4500 miles, and have gotten 1/2 my miles from electricity. This despite the fact that a large amt of my driving is now out of town (long trips to see the grandkids), since I am retired and don’t commute to work everyday. On the road using the gas engine, I generate at least 1/5th of my miles from reclaimed inertia, even on roads like the Jersey Turnpike, flat, high speed and no stops or slowdowns. In stop and go traffic or hills, that number is up to 1/3rd.
    I never buy gas unless I drive out of town.
    Everybody should be driving a plugin hybrid. It would reduce gasoline consumption, based on my experience, by about 70% at least, and reduce pollution and noise. There is no range anxiety with a hybrid.
    Then, the energy for your car could be provided in multiple ways (oil, NG, coal, wind, solar, nuclear, hydro) whatever is easiest to be used to create electricity. And, you can still use gasoline, with or without ethanol.
    Our govt throws away tremendous amounts of money away on absurd things, say, like health care for illegal immigrants. What does one F-35 cost, and how much have we spent fighting an endless war in Afghanistan? This is one program that actually delivers a positive. Attacking it is just a silly way to attack the idea of renewable energy. Renewable energy has many other defects to discuss.

    • I would rather have the F35. At least it is useful defending the nation. Your car merely moves pollution around and any fuel economy is because the primary engine is undersized.

      • You have it backwards: primary locomotive force is from the electric motors, the ICE is there to charge the batteries and provide highway cruising power, which is much less than needed when accelerating.

        This design leverages the relative strengths of each technology. Joel gets the high torque of the electric motors, but at highway speeds only needs relatively few horsepower, which a small ICE can provide while still charging the battery.

    • “After driving hybrid, I think it is criminal to drive with traditional brakes, generating heat rather than generation current to recharge your battery. So primitive.”

      Some forecasters predict a big growth in “mild hybrids,” which use a secondary 48-volt electrical system to free the engine from driving many accessories, and which employ regenerative braking to charge the 48-volt battery. They are said to provide 2/3 the benefits of a hybrid at 1/3 the cost.

      • Re ‘mild hybrids’:

        News to me. I hadn’t run across that yet that I recall. Thanks, Roger!

      • Roger, I sort of have sort of a “mild hybrid” with my Mazda3. It has a system the recuperates energy and uses it to run accessories.

        I also once owned a 1974 Honda CVCC Civic. It met all the pollution standards at the time, which the US auto companies were fighting. If I drove 55 mph on the highway it got over fifty mpg. It did lack the safety devices on cars today. I might note safety requirements and pollution controls all increased the weight of the average car significantly reducing or preventing mileage to decline over time.

    • Yes, you are a form of leach, taking Tax payers money and then bragging about it. Were the Tax Payers asked if they wanted to provide you with the money?
      Your Fancy Hybrid, though more economical than a Petrol version is probably not as Economic as a Diesel.
      Pollution is the new “CAGW” scare based on very bad EPA science and bad modelling, I suggest you read Steve Milloy’s investigations on the subject at
      The BBC carried out tests in the UK trying to show how bad busy roads are for people with breathing problems, unfortunately it showed that the ACTUAL breathing ablitity was no different between the busy road and a nice clean park. But all the people tested said they found it harder to breath near the road.

      • Naught wrong with taking advantage of any tax breaks that you qualify for. Indeed one would be stupid not to. Pay more in taxes than you have to is stupid. are you stupid? or do you try to take all the tax breaks you are qualified for? The problem isn’t with the person that takes the breaks (they’re already over taxed as it is, so good on them for taking advantage of ways to lessen their tax burden) it’s with the government for giving those breaks in the first place.

        • Of course I will take advantage of the tax breaks since I am indirectly paying for them, but I can still know and proclaim they are wrong.

        • Paraphrasing John:
          “If you don’t take as much of other peoples money as you can, you are stupid. Indeed, one would be stupid not too.” Real nice preemptive ad hom attack on others, to cover your rationalized personal cupidity, John.

          When attending a college many years ago, I was informed by a councilor that I could collect Social Security monies because my dad had a heart disability. I refused. I told the councilor that Social Security money was intended for old folks and cripples, not able bodied young men. In your world, John, I am stupid. In my world, I’m honest, ethical, and moral. I find generosity of both wealth and spirit has it’s own rewards, never experienced by the avarice afflicted.

          • You weren’t paraphrasing, J Mac, you were strawmanning. Shame on you.

            Taking a tax credit is *not* taking other peoples money. it’s the government *NOT* taking more of *my* money. Letting the government take more of my money than the government is saying they will take (ie not taking the credit) *is* stupid. The government already takes plenty of my money (too much, in fact) as it is, why should I let them take even more of it if I don’t have to? I shouldn’t and I’d be stupid if I did.

            As for your social security example, I don’t know what that councilor was telling you but I don’t see how you would have been eligible for SS payments. Your father could have been eligible (due to his heart condition, assuming he wasn’t yet otherwise eligible). Maybe your mother (through the spousal payments if she meets the requirements to start collecting those). But not you. Now maybe there’s some scholarship program that I’m unaware of for the children of those on social security, if so then yes, you are stupid for passing up on the scholarship money, as scholarships are a finite pool of money that will get spent whether you accept it or not (IE your passing it up just means some other student will get that scholarship instead).

            if you have a problem with tax credits, it’s not the people taking the credits to reduce their tax burden you should be hating on, it’s the government for creating those credits (and for taxing so much that credits even become a consideration).

          • Looking into it further, that councilor gave you bad advice. Dependent children of someone collecting social security disability are only eligible for SS money until they are 18 (unless they too are disabled. since you made it a point that you were able bodied that means 18 would have been the limit for you), unless you were a child prodigy (which judging by your posts in this thread, I highly doubt) by the time you would have started college, you’d be too old to collect any SS money due to your father’s disability.

      • If you want to see leaches:
        1. Look at the Southern Border.
        2. Look at your immigrant neighbors who have brought over their parents and grandparents. They vouch they will pay to support them, and then they go on Social Security, never having worked a day in their life in this country.
        3. Look at the income profiles in this country. The three wealthiest counties (median income) in the USA directly abut Washington, D.C.
        People like me who legally and openly take advantage of government offered tax credits are not leaches.

    • “Everybody should be driving a plugin hybrid.”

      I want a hybrid that I can be hooked up to my home electrical system in a power outage so I can keep the lights on. I’ll buy the first model to offer such an option. This would work much better than a dedicated generator.

      I suppose some enterprising soul could create an add-on to any hybrid that would accomplish the same thing.

      I see where GM has installed a 120 volt plugin on their new pickup truck. I think Jeep also offers this feature. Now all we need are enough 120 volt circuits to run the lights and the tv and a refrigerator for a few of days.

      Advantages of a hybrid over a dedicated generator for powering a home: No maintenance other than adding gasoline; quiet!; can run for days at a time without doing anything other than adding gasoline; and the hybrid can be used for other things when the power is not out.

        • How do apartment dwellers, or homes without garages supposed to “plug in”?”

          Well, that’s not my problem, it’s their problem. If it doesn’t work in their situation then they shouldn’t buy a hybrid for that purpose.

          That still leaves a lot of people that could use a hybrid home generator option.

    • 1) Because government wastes money on things you don’t like, therefore it is morally OK for government to take money from other people in order to spend it on you as well.
      2) Much of your ongoing savings comes from the fact that the rest of us have to pay for the roads that you are using for free.

      • “…the rest of us have to pay for the roads that you are using for free.”

        That is an artifact of a lousy taxation system, especially these so called “User Fees”. Every person in the nation directly benefits from our roads and infrastructure but vehicle owners are unfairly singled out to bear the burden.

      • Sorry MarkW, but show me where joel said the government was taking money from other people in order to spend on him? Tax credits are not government taking money from other people, it’s government *not* taking the money from you (the tax payer) in the first place. Tax credits are also not the government spending on you, it’s the government *not* taking your money in the first place. Disagree with the reasons the government issued the tax credits all you want but don’t lie about what a tax credit is.

    • Brovo, joel. As a nation, we are on the cusp go “getting it”. Most still want to keep their horses and buggy, but in 20 years the consumer will be driving the sale of EVs. As a shade tree mechanic, I am overwhelmed with the simplicity of the EV. They manage to move us with 25% of the parts in an ICE design, and the first place that hits home in the vastly reduced service costs. Battery life is often bandied-about has a high cost, but the typical 300,000 mile Tesla still has its original battery, and they are aiming for a million miles.

      • EVs have their pros (you named a few) but they also have their cons (such as: More expensive to buy, shorter range, long charging times, inconvenient to charge for those who live in apartments where there’s no easy access to an outlet, etc). Until some of those cons can be mitigated, eliminated or replaced by better pros, EVs will remain a niche product (barring government intervention such as banning the sale of ICE cars). Once the consumers see the pros as outweighing the cons then and only then will they be driving the sales of EVs. whether that’s in 20 years time or not remains to be seen. EVs have been around since the 1800s after all, and have remained a niche product since the ICE automobile was introduced for plenty of reasons, many of which still apply today.

  8. What I find interesting is the whinging of Greens and other supporters of these subsidies when they come to an end or are curtailed. It always seems to occur “just when the market is taking off”. What I want to know is what defines when a “market” has taken off or no longer requires the subsidy. It always seems to be “next year” or some such. Starting in 2008 in The States for EVs, one would think 11 years would be long enough.

    Apparently not.

  9. The economic distortion to subsidized EV’s and renewables in general wind up subsidizing affluent people at the expense of poorer people who also pay taxes but can’t even afford an EV, but to make matters even worse, they are charged even more for the electricity they don’t even get to use in an electric car they don’t get. Subsidies are the worst form of ‘welfare’ because they reward the wrong people who need it the least and usually incentivize the product we need the least as well. EV’s, food to fuel, and renewables such as low density wind and solar are all examples of this, which at the end of the day don’t solve the problem they are trying to cure at the expense of the people who can afford it the least.

    • You’re right on the economic distortion part of your argument. But the EV credit is funded by general income tax revenues, and according to the last several years of IRS statistics, you have to be in the upper half of income earners to even begin to pay net federal income tax. The entry cost of electric vehicles, with the subsidy, is low enough that if you earn enough to pay net federal income tax, you can take advantage of the subsidy yourself if you want to.

  10. As usual, it is the poor paying for virtue signalling of the rich.

    There outta be a law.

    • That’s not really the case – see my post above about who pays income taxes. At the federal level at least, the $7,500 EV tax credit is basically high income earners funding the subsidy for themselves. And if you really want to take a hard look tax the tax code, it’s basically a scheme by which the middle class virtue signals by redistributing money from the wealthy to the middle class (child tax credit, mortgage deduction), the old (interest on Social Security and Medicare), and the poor (Medicaid, food stamps, welfare, refundable tax credits).

    • Here in the UK, the landowners, like former Prime Minister David Cameron’s father-in-law, who owns large swathes of the northern county of Northumberland, reportedly earns in excess of £300,000 per annum through taxpayers’ subsidies on their energy bills! Sort of the reverse of Robin Hood, whereby he robbed the rich to give to the “poor”, but in this instance, robbing the “poor” to give to the already rich!!!! AtB

    • The really poor aren’t paying income taxes, in many case they’re receiving money (Earned income tax credit) from the government on tax day instead.

  11. The complaint that the more affluent people get the tax credits is interesting but I think in the long run unfounded.
    My expectation is that the 2nd hand market will allow less affluent people to buy EV’s and PHEV’s at a steep discount, just like it allows many people to buy gasoline cars at a big discount from the cost of a new car. I bought years ago a used Lincoln Continental with 15,000 miles on it at a very large discount years ago. Those used cars were selling like hotcakes. I kept it for about 15 or 20 years. The brake lines and gas lines just began to rot out.
    The used market is something that central planners never think about.
    Here is a true economic story illustrating this blind spot of central planners.
    In Germany before WW II, the govt decided it would try to emulate Henry Ford and build a car which could be afforded by an average working man. In typical central planner style, they designed a car, the VW, with attention to every single detail that could reduce costs. Even so, it was a leap for the average German to buy one. (Buying on time was not a thing in Germany.) So, the German govt started a saving program to allow Germans to save up money to buy a VW. This is so different from our current system. A guy wants a car, but has to wait 5 years while he saves the money for it, instead of buying it in installment payments while he uses the car and then keeps the care for another 10 years. No wonder they invaded other countries!!
    The German govt never thought about the 2nd hand market. They imagined everybody would be buying a new car. Reflect.
    In the event, all the money that was saved up by Germans before and during the war disappeared after the end of the war. Nobody was sure where it went. Not a single VW was sold to the public until well after the war was over.

    • The second hand market for EV is a very different issue , these would the first gen of EV with shorter rangers and longer charge times , and the real killer will be batteries. Replacement costs will be far more than the car is worth ,even if possible which may not be the case .

      • There have been so few EVs sold, to date (it’s a rather niche market, despite the tax credits) that any second hand market for them will be small and inconsequential for a long time to come (on until the first hand market manages to grow beyond being a niche market, whichever comes first).

    • The extent that new car purchases are subsidized has no impact whatsoever on the price of second hand vehicles.

  12. General Motors is expected to cross it before the end of 2018.

    “it” being the 200,000 sales of EVs.

    They have. This post is from last November.

  13. We ended up selling my dad’s second brand new Ford Fusion because we are unable to store the car for 4-6 months. His car had less than 4000 miles, less than 3 months old and depreciated by 50%. The recommendation for storage is to leave it plugged in. Well below is what happens when you leave an electric car plugged in. This was my dad’s first Ford Fusion.

    • Renee, I am curious why u couldn’t set up a timer to charge your dad’s car once a week for 12 hours while in storage? Are there some other factors at work here that you don’t mention?
      I enjoyed ur first fried fusion story and so I truly am just curious about how this saga is going.

  14. As the owner of two modern diesel cars and able to choose what I buy based on quality and economics here is my take on the type of vehicle we should consider.
    1, It does not matter whether it is ICE or battery the planet is not affected by your choice.
    2. If someone is prepared to pay you several thousand $$ to buy a vehicle that suits you, go for it.
    3. All travel requires energy, only the ignorant claim their travel is less energy consuming than others.
    4. Reliability and overall cost of ownership is key.
    5. It is wise to have multiple options to suit multiple conditions.
    6. Hybrids are a good option for reducing town driving noise and possibly local pollution.

    I recently drove a Toyota hybrid all over NZ it was the most relaxing driving experience I have ever had.
    Don’t allow blind allegiance to any vehicle fuel preference stop you considering all options.

    • Rod what type of Toyota hybrid was it?
      I had a 2008 Camry Hybird that my daughter now owns. Everyone loved it and so far it has been reliable up to the 160,000 kilometre mark. Some would say it was a boring car but it drove well and got 50 mpg on the highway.

  15. car buyers can qualify for up to $7,500 in “tax-payer funded” subsidies when buying an electric vehicle.

    There, corrected that one for you!

  16. And the irony is the rich are merely ‘added ‘ an EV to their fleet , no buying one instead of something else .

    • And your proof of that assertion? I know a few people who, when it can time to replace their old (and only) car bought a hybrid *instead of* an ICE vehicle, which rather shows your absolute assertion to be nonsense.

  17. I read a report from the US Army Captain who started up VW (post war) in 1945. He found that the savings still existed but connecting accounts to the owners (and the authority to do so) was above his pay scale. He commented that the peoples car was a real concept not just nazi propaganda.

  18. The unrealistic price tag of EV’s brings quite some perks to their owners. Reserved park-spots, access to restricted city zones, tax deductions. Normal that they will lobby for even more return on investment 😉

    Their usual profile seems to be, charging at home (try to do this in a 12 stores apartments block…), short commute, charging at the office, trip to the airport where valet service takes over at 1000+ bucks/week, back home.

    Obviously not the same lifestyle as the majority of taxpayers who fund the subsides.

    Envision the charging infrastructure and maintenance required by a sizeable operation, Stuttgart airport for example, where presumably 400 (600? undisclosed…) employees/sub-contractors come by privately owned vehicles.

    Reason why EV’s are by design a life facilitating commodity for those who decide where your tax-money goes.

  19. Green subsidies for cars, PV etc are the greatest transfer of wealth from the poor to the rich since the Sherrif of Nottingham rode for Prince John.

  20. The UK was Europe’s largest market for PHEVs, due mainly to the generous government grant of up to GBP4,500, now no longer available. A survey in late 2018 found that many, possibly the majority of, PHEVs were never, ever plugged in. The main culprits were thought to be users of company cars, purchased by a company simply for the grant, whose petrol or diesel is paid for (in whole or part) by their employer, but would have to plug into their own domestic electric supply if overnight charging was undertaken.
    Strangely nobody had managed to envisage that scenario prior 2011 when the grant system was started.

  21. Perhaps this is the case already (not sure since I have never bought an EV), but it would make sense to me if the amount of the credit the taxpayer received was dependent upon their Adjusted Gross Income.

  22. The actionsof Tesla over the years have destroyed the advantage of an electric car. Because batteries were so expensive($45,000 for Tesla’s first smallroadster) Telsa buildexpensive vehicles, to hide the cost of the batteries – high dollar cars have large profit margins. With a $7500 price reduction , these cars were affordable to the wealthy few. Batteries have come WAY downin price and sohave EVs. But automakers continue to build high dollar cars as EVs. If Paul Elio (three wheeled car) had any sense he would have designed his two passenger vehicle as electric – cost would havebeen around $15,000 with a battery pack good for over 150 miles and rechargeable fairly fast. AN electric car is, or should be, far less complicated than a gas powered vehicles with thousands and thousands fewer parts.

  23. We should all pay close attention to the posting of Joe Ebeni (June 11, 2019 at 4:40 am):
    “… are roads to be paid for, as gas tax revenues decline?”

    Joe has identified what is probably the most important problem of electric vehicles…..who is to pay for the roads that these vehicles run on? (This presupposes that the tax(es) on motor fuel go to their intended purpose and are not simply dumped into the “general revenue” pile…..)

  24. One point in favor of EV and PHEV’s which I never see brought up is the ease of obtaining energy for these vehicles. Any thing that can produce electricity can be used for fuel for them. And, the fuel can be transported fairly easily.

    I have been watching and downloaded a bunch of data.
    The French interconnector runs on the average at 1.5 GW but can go to 2.0 GW. Over an hour, that amounts of 1.5 E6 kwh. The conversion is 36.6 kwh per gallon of gas, so each hour France exports the equivalent of about 40 thousand gallons of gasoline to the UK. That would take at least 4 large tanker trunks to haul, every hour. So, on a daily basis, that would be 96 trucks dispatched across the Channel. They could increase that by 33% just by running the interconnector full blast. Over the course of just one year, that would amount to the equivalent of 47,868 tanker trucks sent across the channel from France. And, they have to come back empty.

    I am an amateur. If anybody is interested, they should check my math.

    I know a lot of people say that the grid could never handle a lot of plugin in vehicles. Maybe so. But, a PHEV can easily charge overnight on a 120 volt outlet and it is hard to see how that would overload the grid at night in the USA. PHEV’s allow you to plug it in and schedule when the car charges. People could have assigned times to charge their cars to avoid overload, if that were necessary.

    In England the power demand drops from 35 to 20 GW at night, so there is plenty of slack at night in the grid. 220 volts are standard in europe, and could charge my car in under 3 hours.

    I think a lot of the negative attitude towards electric cars comes from the all EV car with numerous issues with recharging on the go. None of those issue matter to a PHEV.

    Anyway, owning a PHEV has really changed my attitude to this technology.

  25. Don’t talk to me about “efficiency” until you’ve added into the calculation how long I have to work to pay for ALL of my road transport.

    If I have to own two vehicles, because the EV won’t do everything that I need – whether it is doing long trips or crashing heavy loads, then take that into account.

    If it cost extra to purchase and depreciates faster , then that must be accounted for.

    Conversion of fuel into motion is not the most important criteria.

    I’m also willing to bet that those banging on about efficiency do not apply that criteria to their time…. if they did, they would not be wasting it, posting here.

    • If I have to own two vehicles, because the EV won’t do everything that I need – whether it is doing long trips or crashing heavy loads, then take that into account.

      That rather depends on the individual. Everyone is different and what your automotive needs are and what other peoples automotive needs are can and will be different. The vast majority of car owners aren’t routinely making heavy hauls or taking long distance trips.

      for those who routinely commute short distances (say 40 miles tops round trip) and only rarely take long trips or haul heavy loads, it *could* make sense for you to own an EV and rent an ICE for those rare occasions when you want to make a long trip or haul a heavy load (much like people don’t own both a car for their everyday use and a U-haul truck for moving stuff but instead they own a car and rent the U-haul on those rare occasions when they need it to move stuff).

      Where as, on the other hand, if you routinely take long trips and/or do a lot of heavy hauling, then an EV doesn’t make sense for you and you should stick with ICE vehicles for ownership.

  26. Do tax payers get to pay to dispose of all those failed batteries too ?
    You can only hide the true costs for awhile .

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