> 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...
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.
Basically the math works like this:
An internal combustion cars cost X tons of carbon to produce. An an EV costs Y tons of carbon to produce. If you need a new car, it will probably require the same amount of carbon to produce an EV as a combustion car. But if you can drive a used car and extend its life 5, 10, 15 years, you save all the carbon of producing the car (which is where the majority of the carbon cost comes from).
> 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.
I love investing in technology. However, there's probably more efficient ways of doing it. Every dollar spent to help the rich could have been spent helping the poor, or the environment, or funding research.
Obviously if you play with the numbers (CO2 per mile driven, # of miles in life of car, CO2 per new car, expectation for expected reductions in total CO2 reduction by waiting if you want to get fancy) you can get it to tilt in either direction.
Using the carbon offset market, you could offset 760 Tonnes of CO2 with $7500. That's the carbon equivalent of driving an ICE for over 2 Million miles.
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.
IIRC to get the full $7,500 it needs to be a full electric with a battery large enough for X miles so the Bolt wouldn't qualify (for all of it).
> 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.
You also need a tax bill of at least $7,500 to take advantage of the full credit. If your tax bill is only $5,000 then that would be max you could get back.
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.
There is a 200k cap on the credit. Meaning mass market EVs do not receive the credit. It exclusively benefits low volume, high margin EVs. Which are exclusively marketed to the rich.
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.
http://www.taxpolicycenter.org/briefing-book/whats-differenc...
Also, you don't need to take it all one year. Tax credits carry forward up to 10 years.[1]
[1] Disclaimer, I am not an accountant
That accounts for 3% annually.
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.
Sure, things today may be a wash in terms of overall emissions in many areas, but as time goes on and dirty power plants are shut down and cleaner sources brought online, the emissions due to EVs increases.
I'm seriously evaluating buying an electric car like the Bolt (though the cheap interior is a bit of a turn-off for a longer commute) or the Ioniq EV (much nicer, though with less range) since many employers are offering EV charging at work. That'd make my out-of-pocket operating costs basically negligible (other than occasional air filter and tire rotations), which is nice.
I'd love to see the tax credit turned into a point-of-sale reduction in price so more people can benefit, rather than just those with a >$7500 tax bill.
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...
Seems the bigger driver of the $300 is the need to rely on a car.
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.
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.
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...
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...
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.
Ultimately, it was trunk space that made me choose the Prime. We have one car and occasionally go camping and having more storage in the car was more important than the fifth seat or longer electric range.
If that is so why are republicans proposing to cut the estate taxes?
hypocrites.
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 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.
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.
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.
There are many other reports by many other groups...
Also consider the costs of using tax payer money to pay for/subsidies infastructure/reasearch in the fossil fuel industry.
The lack of a carbon cap. And also the fact that large ships and buildings are allowed to burn oil sludge without particulate filters.
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.
One day we will wake up and the US Petrodollar will be the emperor's new clothes.
I'm with you on the subsidies though.
One thing to keep in mind though is that we may be nearing the time in which the market could handle this because renewables are getting very cheap. I'm not sure if we're at the point where if you dropped all oil subsidies that renewables would be cheaper (maybe not? I haven't done the math) but we should be getting close if we're not already there. At that point the market could, in theory, move to the one with the higher profit margins while still not caring about external costs.
https://www.forbes.com/sites/drillinginfo/2016/02/22/debunki...
Does it cease to be a subsidy if I'm dumping the waste in a river and the government is hauling it away from there, rather than collecting it at the factory gate?
Seems to me anyone who's opposed to government subsidies would also be opposed to profiting from negative externalities.
The Nissan Leaf and Chevy Volt aren't particularly upper class cars. Neither is the Model 3.
Lots of fine vehicles available for $15,000, $15,000 is an awful lot of gas (and you save on insurance and financing with a cheaper vehicle, so the lower maintenance on the electric isn't the only consideration).
Just because something is priced in a range that would be affordable to most professionals, liberals or conservatives, does not mean it isn't associated with the elite.
This toilet paper is made of gold... but do you think its the "elites" that are buying it?
http://wsimain.wallstreetinsani.netdna-cdn.com/wp-content/up...
I know 4 people who purchased used Nissan Leaf's for under 10,000 with the tax credit in California. They all make over 6 figures. My conservative neighbor makes less than $60,000 per year, and has a truck that costs that much.
That's not a big number by developer standards but it's more than the median household income in the US.
(Having said that I'm for the credit and have already benefited from it twice.)
Even with the tax breaks that include middle class earners benefit the rich more just by the nature of how deductions work. The rich tax payer would have had this deducted income taxed at a higher bracket than the middle tax payer would thus a bigger absolute savings on their tax bill.
That's why crossovers, SUVs and half-ton pickups with multiple rows of seating are so popular among less wealthy new car buyers.
Buying a commuter vehicle that can do little else well is definitely an upper class(es) thing.
/s
Wake up.
* State / Local tax disproportionately benefits richer states (which tend to have higher income taxes). That's also going away.
The real issue IMO is that the standard deduction is going up, and the top tax rate is going down. The overall effect seems to be a tax-increase for me and a tax-decrease to those who are richer than me.
They probably should close the backdoor Roth loophole, and a few other corporate loopholes (Irish Double Sandwich or whatever its called).
https://www.edmunds.com/fuel-economy/the-ins-and-outs-of-ele...
Between 2015 and 2016, US median household income rose 3.2% from $57,230 to $59,039, according to a new report released by the U.S. Census Bureau on Tuesday.
So, yes, the median household income is right in line with being able to purchase a 20k vehicle.
That being said, I think you're on the right path as only 35% came from renewables (15%) or nuclear (20%).
So the 1% is accurate if the power generation remains static but renewables and nuclear are growth sectors. A bunch of reactors are allegedly coming online in the next decade. Wind and Solar are also growing quickly.
1. https://www.wsj.com/articles/which-state-is-a-big-renewable-...
Edit: And also, I just checked and Texas does NOT do very well on CO2 emissions per capita.
Edit: Also I did some more checking and Texas is not leading the country in renewable energy, it is 22nd
So setting aside whether this is fair or unfair, people that owe more taxes clearly get a bigger benefit from the credit.
https://www.irs.gov/pub/irs-pdf/f1040.pdf
But lots of people don't end up paying $7500 in income taxes.
I take it as a given that we want to continue to have cheap energy as we transition to renewable resources. Our economy and much of our quality of life are dependent on the incredible abundance that cheap energy has provided, so I'm not in favor of throwing the baby out with the bath water! If we need to defend our cheap energy supplies sometimes, that's probably OK.
The kinds of subsidies I'm interested in hearing about are where oil or gas is getting special treatment compared to other businesses. I'm not in favor of special treatment for most businesses, but I'm especially disinclined to unlevel playing fields.
I'm in favor of the adoption of renewables and somewhat in favor of subsidies and breaks for renewables to encourage it. I'm not in favor of special privileges for oil and gas, over and above what's afforded other industries. However, instead of penalizing oil and gas with respect to other industries, I'd prefer subsidies and breaks for renewables. Cheap energy is critical to pretty much everything.
> The bulk of energy subsidies in most countries are due to undercharging for domestic environmental damage
I understand it's an accepted part of the word subsidy but it always feels dishonest when people treat "lost revenue" and actual money given to industries the same and then combine them into a huge number that is 95% theoretical losses that are difficult to quantify.
Do you consider $31K to be luxury? Or are you saying that because you aren't really familiar with the market?
As of the end of 2016 Tesla's cumulative sales were ~160k units. Nissan alone has produced over 300k of the Leaf.
The Bolt exceeded the Model S in sales last month selling just under 3000 units.
> There is a 200k cap on the credit.
Meaning if you sell more than 200,000 cars you no longer get the credit. GM sold 10 million ICE cars in 2016. If they were all EV 9,800,000 would not have received the credit.
That's false.
> It exclusively benefits low volume, high margin EVs.
That's also false. It benefits high margin vehicles regardless of volume and high margin does not necessarily mean luxury.
> Meaning if you sell more than 200,000 cars you no longer get the credit.
That's also false. Crossing the 200k mark starts a phase out process that takes a year.
So if GM managed to produce and sell 10 million ICE cars in the United States in 1 calendar year, the buyers would all receive a tax credit.
As yet, no manufacturer has reached 200k sales in the United States. Again Nissan leads the pack but has yet to reach the 200k mark.
Letting companies deduct expenses like everyone else is not a subsidy.
It's like it's become part of the common mythos, that US oil companies get massive cash subsidies that are the sole reason they're not beaten by renewables, but the moment you apply any scrutiny it falls apart.
(Environmental concerns are legit, but the lack of better regulation is a non-standard usage of "subsidy" and people go further to claim that tax-deductions-everyone-gets are subsidies.)
I don't think that failure to do so the same thing as a cash subsidy.
Many '11-'12 Leaf owners are already complaining about significantly reduced ranges on their vehicles. What happens after 60,000 miles if your battery starts rapidly going under 9 bars?
Keep driving with terrible range anxiety? Plan your routes with chargers in mind? Have a stopless commute now require you to stop and charge, making trips even longer?
Replace the battery pack?
http://www.greencarreports.com/news/1111264_new-life-for-old...
Whoops, that's going to be $6,200.
> Keep driving with terrible range anxiety?
If we're bringing all of this up; we must consider the reliability increase as well.
There's starving kids in Africa. They have it worse than kids in the US but they aren't more than tangentially relevant to a discussion on hunger in the US.
Your European fuel taxes are of similar relevance to this discussion about fuel and transportation taxes/subsidies in the US.
6.14/gal a wonderful example of an amount of taxation I never want to see on a gallon of anything short of liquid cancer in the US. I'm convinced that we can reach a far more efficient way to implement carrots and sticks.
What dollar value do you assign to the human and economic cost that any one pound of CO2 will produce over the next century? How did you come by this number?
If you haven't, then you're just going with your gut feel. Gut feel is a terrible way to judge whether or not policy is good, or not.
What if the economic cost of burning that gallon of gas is $10? Would applying that externality to the price at the pump still churn your stomach?
If you don't want to assign a greater or equal cost to it, then the most efficient solution for the market will be to keep polluting, causing net harm. Robbing Peter to fill Paul's gas tank.
Yeah you're gonna need a credible source on that claim.
Please do correct me if I am wrong.
It gave them plenty of funds for sure (and only for a limited time) but saying it's a significant enough portion to the point of lending credence to the claim being discussed? I have trouble buying that without a source.
While it's a subsidy; the benefits don't stop at the first purchase. As long as the subsidy continues, prices for used EVs will stay below prices of new EVs.
I'd like to learn more about that dynamic of used car pricing. Do you have any pointers?
Here are some thoughts I have which might introduce subtleties:
* At some price level, there is a floor on "good condition used car that will safely take you from A to B",
* A used EV also price-competes with all used cars, and perhaps even with new non-EVs.
And, did they buy a new one? MSRP is $30,680: https://www.nissanusa.com/electric-cars/leaf/versions-specs/...
What was the out-the-door price for your parent’s 2017 Leaf?
EDIT: Seems like my information is out of date. I'll just edit my misinformation out (ie: most of the previous post)
False [0].
[0] https://group.renault.com/wp-content/uploads/2014/09/fluence...
Page 91, Figure 49: "Comparing carbon footprint of EV and ICE vehicles".
Up to 85% of the carbon footprint of a car comes from driving it. Heck, even a typical hybrid during its lifetime saves roughly 150% worth of its weight in CO2 emissions. Taxis easily double that figure.
Though I can't find a reliable number for how many years that actually is and I'm not sure if the average person who owns an EV would even keep it that long...
A PZEV (very low emission ICE vehicle) is the sweet spot right now in terms of overall environmental impact. It will be a few years before EVs are the clear winner.
So the question is what is the dynamic interplay between different markets for used IC vehicles? Should we be shipping 1995 Camrys to less-developed countries so they can junk their 1985 Camrys?
And then of course note that the 1995 Camrys probably get worse gas mileage than the 1985 Camrys because they have are heavier due to safety features....
Meanwhile the definition of "Camry" has changed - they are a lot larger, more powerful and more refined now. Note, for example the engine sizes going up as the MPG gets better.
Owning a Tesla (the current fad) or Prius (the previous fad) has long been about looking like you are environmentally conscious rather than actually being environmentally conscious. True lovers of mother nature ride the bus, train, or ride a bike.
Owning a Tesla, from what I can tell, is about operating a truly excellent vehicle that happens to be electric.
Just a quick thought from someone that actually went shopping and drove both: The MB S-class beats the Model S in terms of luxury feel. Hands down. The Model S is faster. And quieter. But it does not feel as good as a MB at all. Before you ask, no, I ended up buying neither. I bought a Subaru Forester and an airplane for the same money.
So now EVs are some kind of evil temptress?
I think I can do without reading that source now.
This is crazy, man. I'm just saying it costs less carbon to keep a used car. I'm not accusing EVs of "being an evil temptress".
