Electric Car Incentives Are Under Attack

By · April 11, 2017

Chevy Bolt charging

The affordability of new electric cars like the Chevy Bolt are affected by available consumer incentives.

Edmunds, the car-shopping website, released a report last week claiming that the market for electric cars will “crash” without the current $7,500 federal tax credit for consumers buying an EV. That was not an unexpected position for Edmunds, which has published disparaging stories about EVs dating back at least six years. Nonetheless, Edmunds underscores an important point: The market for clean and green plug-in cars would be adversely affected by consumer incentives going away—especially in a time of low gas prices.

According to The New York Times, those incentives are indeed under attack. At least nine states have introduced bills that would repeal tax credits for electric cars, let them expire, or levy new fees on those who own EVs. And as Edmunds points out, there are also concerns among advocates of electric cars over the fate of a $7,500 federal tax credit on the vehicles, an important catalyst for sales.

At the state level, a Colorado bill working its way through the state’s legislature would end income tax credits—worth up to $5,000 each—for EV buyers. The measure is publicly backed by Americans for Prosperity, a group founded by billionaire brothers Charles and David Koch, who made their fortune in the petrochemical business.

Utah’s House of Representatives recently voted against extending the state’s tax credit for electric vehicles. Other states, including Illinois, Pennsylvania and Tennessee, already allowed their incentives to expire.

As many as 10 states are now charging up to $200 a year for an electric vehicle or plug-in hybrid owners—and nine more are considering the same tactic. The argument is that taxes for road maintenance, usually levied via taxes at the gasoline pumps, are not being collected by EV drivers who plug in at home to fuel their vehicles.

Here’s the silver lining in these dark clouds: Key states continue to recognize the importance of zero-emissions vehicles in combating air pollution and climate change. In late March, California regulators voted to push full speed ahead with its greenhouse-gas emissions standards and zero-emission-vehicle (ZEV) program for 2022 through 2025. This comes as the US Environmental Protection Agency threatens to relax federal fuel economy requirements.

Meanwhile, in New York buyers of electric and plug-in hybrid vehicles are set to receive a $2,000 rebate. “We’re very excited to see this kind of rebate launched in New York,” said Gina Coplon-Newfield, in an interview with The New York Times. Coplon-Newfield directs the electric vehicle program at the Sierra Club.

“Are we worried about what the federal government will likely try to do? Yes,” she said. “And we’re concerned that many similar bills are coming out in many states at the same time.”

We will continue to update info about incentives on our page about EV credits, rebates and perks.

New to EVs? Start here

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