The EV tax credit is dead – here's what happens next

ZeroGravitas 229 days ago | |

What people don't realise is that the bans that are discussed as big government overreach are actually for the benefit of large corporations to coordinate.

They each know that without time boxed regulation they'd all try to defect and let the others take the early losses leading to the entire industry collapsing.

It's fixing a prisoners dilemma.

hollerith 228 days ago | |

In contrast, I prefer the least restrictive laws and regulations that achieve the goal.

Our nation's continuing to emit a little CO2 from automobile tailpipes is not so dire a danger that we can't meet our goal with a sufficiently drastic tax on fossil fuels, enabling those few consumers and organizations that benefit the most from emitting CO2 from automobile tailpipes to continue to emit a little.

It is hard for policymakers even to imagine all the ways an outright ban on something will incur costs -- and most of the time, they shouldn't even try.

Ekaros 228 days ago | |

I think we should at same time also do total ban of private use of any fossil fuels. No more gas or oil or other fossil fuels. Only renewables and biomass. No private company or person is allowed to burn any fossil fuel inside economic borders.

JohnFen 229 days ago | |

That would be a disaster unless we build public transit systems that are actually good first.

Schiendelman 223 days ago | | |

I looked at your comment history because we agree on a lot!

This is an interesting one. Public transit can pretty much only be built after there is demand. Because we limit growth so much, there are very few places where we have allowed growth that would support transit.

If you were to overturn land use regulation as a whole, you would get dense places, and then we could get more transit...

rayiner 229 days ago | | |

Keep your eye on the climate change ball. We have a perfectly acceptable drop in replacement for gas cars in the form of EVs. This is not the time for your urbanism fetish or massive social engineering.

JohnFen 228 days ago | | |

It would be a disaster without that because it would mean that a ton of people, mostly lower-income people, would essentially no longer be able to have cars at all. They'd still need to get around, thus the public transit.

It has nothing to with urbanism or social engineering, it's just about the need for transportation.

> We have a perfectly acceptable drop in replacement for gas cars in the form of EVs.

No, we don't. Not yet. There are still serious problems around charging that remain showstopper issues for many, mostly lower-income, people.

rayiner 228 days ago | | |

70% of households even in the bottom income quantile have a car, and it’s 88% in the second to bottom income quantile. There’s no reason with modern battery technology these cars can’t be as cheap as gas cars. And building charging infrastructure is a thousand times easier than building public transit.

Meanwhile, public transit keeps people poor by limiting their ability to move around for better jobs and housing. It’s a huge unnecessary tax on poor people to try to yoke them to public transit in the name of climate change mitigation.

JohnFen 228 days ago | | |

OK, then let's build a good charging infrastructure first. It just seems to me that getting public transit in a good place is a much easier and cheaper task than putting a good charging infrastructure in place. If I'm wrong about that, I don't mind.

My point is that if we take away people's gas cars before having an alternative that works for everyone, that's bad. And we don't have an alternative that works for everyone yet.

triceratops 229 days ago | |

This is a terrible idea and I love it!

I like the goal: no more gasoline cars. And if governments can grow a pair and set a realistic end date for them it would work out great. A suggested timeline: no gasoline cars manufactured after 2028, no new sales after 2030, complete road ban after 2037 unless you buy carbon offsets etc.

The roadmap I suggested above is already highly aggressive and will generate massive pushback. Doing it overnight would be disastrous. No politician will do it while Americans remain in love with their gasoline tanks.

pcdoodle 229 days ago | |

That way only the rich can drive! Put the rest of the cattle of public transit. /s

triceratops 229 days ago | | |

I'll believe this "ackchually cars are essential for poor people" nonsense when the biggest selling car in America isn't a massive, expensive pickup truck.

It's financially disastrous for poor people to take a loan to buy a depreciating asset that sits parked 95% of the time. And requires monthly expenses for insurance and parking.

Moving to EVs means middle- and upper-middle class people have a decision to make: spend money on switching, or join everyone else in public transit.

rayiner 228 days ago | | |

In America, even most poor people have cars. In the bottom income quantile, 70% of households own a car: https://data.bts.gov/stories/s/Transportation-Cost-Burden-Tr.... In the bottom 20-40%, it’s 88%. And in the lowest income quantile, households spend over $6,000 per year on transportation. It’s not “financially disastrous,” because the alternative is paying much more money in rent and losing the flexibility to pursue job opportunities in different places. Lack of geographic flexibility to pursue housing and jobs is a huge burden on carless people, and traps people in failing communities.[1]

The middle income quantile spends $11,000 per year on transportation. The median US car payment is $749 new and $529 used. The sooner we force middle class people and up move to EVs—which they can afford to do—the sooner we can create a robust market for used EVs for the bottom quantile.

[1] One of the biggest differences I noticed between Baltimore, where I lived, and rural Oregon, where my wife’s family is from, is that people in Baltimore are trapped in dangerous neighborhoods with no job prospects. Their lack of mobility turns them into wards of the state. People in rural Oregon are just as poor, but they can move around looking for housing and work. E.g. someone who loses their job can move in with family in the middle of nowhere and still commute to find part time work or pursue job leads in the towns.

triceratops 228 days ago | | |

> The sooner we force middle class people and up move to EVs—which they can afford to do—the sooner we can create a robust market for used EVs for the bottom quantile.

Completely agree.

> And in the lowest income quantile, households spend over $6,000 per year on transportation.

And that's a much bigger impact on personal finances, proportionately, than higher-income people.

> because the alternative is paying much more money in rent and losing the flexibility to pursue job opportunities in different places

Because that's how American cities are built. Destroy yourself financially (and healthwise - 1h/day in the car is awful) driving, suffer through terribly long commutes on a bus route that drives everywhere, or rent shitty "luxury" shoeboxes near work. I agree it's not practical to fix it in the short-term. I just resent middle- and upper-middle class people opposing government incentives to switch to EVs because "it'll hurt the poor". Like no, the poor are screwed either way, you just don't want to pay up.

rayiner 228 days ago | | |

> Because that's how American cities are built

It’s not just “American cities.” Even in Tokyo—which has transit better than what Americans could ever aspire to build—getting around on public transit takes much longer than driving. And it can take even longer if you change jobs and your workplace is no longer near the same train like as your previous workplace. Even with Tokyo’s amazing infrastructure, people using public transit there don’t have as much geographic flexibility in finding jobs and housing as my wife’s lower income family members in rural Oregon and Idaho.

floxy 228 days ago | | |

>The median US car payment is $749 new and $529 used.

Most cars are apparently owned outright / not currently financed? 66% according to this source at least:

https://accountinginsights.org/what-percentage-of-cars-on-th...

triceratops 223 days ago | | |

Cars on the road != car purchases. 70% of new cars are financed. It could be as high as 40% for used cars, but there isn't high-quality data for that.

thebruce87m 228 days ago | | |

I keep getting told that EVs have massive depreciation, so can’t people buy one if these massively depreciated vehicles?

floxy 228 days ago | | |

For the modestly priced vehicles, the $7,500 tax credit is a huge contributor to depreciation that people seem to overlook. When I purchased a Nissan Leaf back in 2022, the sticker price was like $28,000, and the price after the $7,500 rebate was $20,500. So of course, if you were to turn around right away and try to sell it on the used market, you wouldn't be able to sell it for more than $20,500, since buyers would be crazy to buy it used from you, when they could buy a brand new one for $20,500. So that like 27% depreciate just due to the tax credit. And then for the more luxury EVs (like Audi, Mercedes, etc), there is the fact that luxury vehicles already depreciate more than less expensive cars (ICE included). And the battery tech keeps getting better, so fewer people want a 200 mile version when the newer versions have 300 mile range. So there is less of a market for $100k MSRP vehicles three years later that are going for $40k, since people are also worried about luxury priced repairs / maintenance, when they could get a new $40k Chevy, with a bigger battery and new warranty, etc.