2021 Auto News USA automobiles

Lifting the veil on electric vehicle subsidies

Credits: www.bostonherald.com

Electric vehicles are the future. Everyone will want one because they’re emission-free, ecologically responsible and more affordable every year. That’s why GM, Volvo and other manufacturers will soon be making only EVs.

Or so we’re told.

Some people’s driving habits and incomes certainly make buying an EV an easy choice.

But why do the rest of us need mandates and subsidies to “persuade” us to buy EVs, instead of internal combustion engine vehicles (ICEs)? Who’s actually getting the subsidies — and who’s paying for them? What other costs and unintended consequences are hidden from view?

President Biden wants to require all new light/medium-duty vehicles sold by 2035 (or sooner) be EVs. Vice President Harris wants only ZEVs (zero-emission vehicles) on America’s roads by 2045. Various states have already passed or are considering similar laws. Some would ban the sale of new gasoline and diesel vehicles by 2030.

A 2021 Tesla Model S Long Range can go 412 miles on a multi-hour charge; its MSRP is $80,000. A Model 3 costs around $42,000; the Model Y all-wheel-drive $58,000. Similar sticker-shock prices apply to other EV makes and models, putting them out of reach for most families.

To soften the blows to budgets and liberties, Sen. Chuck Schumer (D-NY) wants to spend $454 billion to build 500,000 new EV charging stations, replace U.S. government vehicles with EVs, and finance “cash for clunkers” rebates to help at least some families navigate this transportation transformation.

Politicians are being pressured to retain the $7,500 per car federal tax credit (and hefty state tax rebates) now scheduled to lapse once a manufacturer’s cumulative vehicle sales since 2009 reach 200,000. EV drivers also want other incentives perpetuated: free charging stations, access to HOV lanes for plug-ins with only the driver, and not having to pay gasoline taxes that finance the construction, maintenance and repair of highways they drive on.

Not surprisingly, a 2015 study found the richest 20% of Americans received 90% of these generous EV subsidies. Lobbyists are clearly more valuable than engineers for EV manufacturers and drivers.

Under this Robin-Hood-in-reverse system, the subsidies are financed by taxpayers and generations of their descendants — including millions of working-class and minority families, most of which will never be able to afford an EV.

Any cash for clunkers program will exacerbate the problem. By enabling sufficiently wealthy families to trade fossil-fuel cars for EVs, it will result in millions of perfectly drivable cars and trucks that would have ended up in used car lots being crushed and melted instead.

The average cost of previously owned ICE vehicles will increase by thousands of dollars, pricing even them out of reach for millions of lower-income families, which will be forced to buy pieces of junk or ride buses and subways.

Perhaps even more ironic and perverse, the “zero-emissions vehicle” moniker refers only to emissions in the USA — and only if the electricity required to charge and operate ZEVs comes from non-fossil-fuel power plants. Texans now know how well wind turbines and solar panels work when “runaway global warming” turns to record cold and snow.

With many politicians and environmentalists equally repulsed by nuclear and hydroelectric power, having any electricity source could soon become a recurrent challenge.