November 7, 2017

A free-market detour on the electrified road to Nirvana?

When President Obama first took office and presided over the "Stimulus Bill" purportedly to kick-start economic growth and counter the nascent recession, one of the mountain of spending programs came in the form of an electric vehicle tax credit. Paid to EV buyers, it was really corporate welfare, designed to incentivize automakers into developing mainstream electric powered vehicles for a citizenry that was, at the time, yearning to be green in the face of a "looming climate change catastrophe."

Those heady days of wunderkind planet-saving schemes seem a distant memory today, as mainstream media barely mentions climate or CO2 any longer. But the EV tax credit is back in the news because, since Democrats insist that any reduction in tax rates imposed on Americans must "pay for itself" in spending reductions or tax hikes elsewhere, the draft tax plan is set to eliminate the credit altogether, in less than 2 months. (Ironically, there were no such demands for the aforementioned Stimulus Bill to be anywhere close to revenue neutral. Curious how that only applies to the bills that reduce government power.)

I'll get my Schadenfreude on with the Reason headline: Republicans' Tax Plan Crashes Jerry Brown's Electric Car Fantasies

If Republicans succeed in getting rid of the feds' $7,500 tax credit for ZEVs - which far outstrips California's additional $2,500 rebate for the same product - Brown will have to devote far more of the state's resources toward reaching 1.5 million ZEVs by 2025.

California is already spending $140 million a year on tax rebates for hybrid and electric vehicles, enough to provide 56,000 people with full-ZEV tax credits. If the federal tax credit were to go away, Brown would have to spend another $420 million to maintain the same subsidies for those 56,000 prospective buyers.

Electric car manufacturers, who sell about half of their electrical vehicle fleet in California, can see the writing on the wall, with many issuing statements urging Congress to reverse course on eliminating the tax credit.

It's hard to imagine Washington taking a principled stand on any issue, much less this popular sop to "protect the environment." But it could happen. Especially since the GOP might pass the bill with little or no Democrat support. But I'm putting down a marker that it won't be included in any final measure that might be signed into law. More likely, it will be spared in exchange for the ending of all state efforts to ban gasoline powered cars entirely.

But it is a fascinating issue to watch as it plays out.

Deleterious Anthropogenic Warming of the Globe Economics and Markets Oil and Energy Technology Trump Agonistes Trump Revolution We're from the government, and here to help. Posted by JohnGalt at November 7, 2017 2:54 PM

Pile on the points, this game is not over.

The Republican Tax Bill Exacerbated Tesla's Drop Yesterday

As for the game's not being over, I need to change my news feed. Still plenty of CO2 & Climate in my sources.

Posted by: jk at November 8, 2017 9:45 AM

You're sources must be on the fringe. Here's proof of my perceived change in coverage: https://www.mediamatters.org/blog/2016/03/18/climate-change-gets-trumped/209392

Posted by: johngalt at November 8, 2017 3:01 PM | What do you think? [2]