Electric vehicles are not nearly as good as current cars

Electric vehicles are not nearly as good as current cars

J. Winston Porter, Guest Columnist Published 10:29 a.m. CT July 11, 2019

In 2008, when Congress approved tax credits, Electric Vehicles ( EVs) were believed to be the “next generation” of alternative-fuel vehicles.     

Yet, despite a massive investment over the past decade and, notwithstanding special tax privileges, EVs have neither a sufficiently low price nor enough customers.  If the most prosperous nation in the world cannot afford them, who can?

J. Winston Porter (Photo: Special to Clarion Ledger)

Not Germany, evidently, which is the largest car market in Europe.  German Chancellor Angela Merkel set a goal in 2010 to deploy one million EVs on German roads by 2020.  As of December 2018, there were fewer than 200,000 EVs in Germany.  EVs account for just 2% of Germany’s car fleet.

Similarly, EVs have captured less than 1% of the total American car market.

Not surprisingly, the use of EV tax credits is a phenomenon characterized by a measure of hypocrisy. Almost all EV owners in the United States are people or corporations with high incomes who don’t need a tax credit.  Studies show they are motivated to buy an EV for other reasons such as HOV-lane access or desire for a high-end vehicle that happens to be electric.

For these EV owners, the credits — which range from $2,500 to $7,500 depending on battery capacity.  The credits reduce government revenue, but do not increase EV sales.  From 2011 to 2017, the EV credits cost the U.S. taxpayer $2.2 billion.  And Congress’s Joint Committee on Taxation estimates the cost is expected to reach $7.5 billion between 2018 and 2022.

The tax burden is felt most heavily by middle- and lower-income Americans who are unable to afford EVs.  A study by the Pacific Research Institute found that about 80 percent of the tax credits were claimed by households with an adjusted gross income of more than $100,000.  

Although there are more than 1.1 million EVs on the road in the U.S., they represent a small fraction of the more than 270 million registered cars, with about half of those in California.   EVs contribute only marginally to reducing air pollution and carbon emissions. Substantial amounts of electricity are used in manufacturing EVs.  And, in large parts of the country, coal provides the electric power used in recharging EVs.

What’s more, battery chargers are often missing in places where people need them -- like parking lots and garages of apartment buildings.  As many EV owners are learning the hard way, charging an EV can be difficult in the best of circumstances. This inconvenience reduces the number of consumers willing to substitute a plug-in EV for a gasoline vehicle. 

Yet instead of grappling with these issues, some members of Congress want to reconfigure the EV tax credit and extend it for another ten years.  An Ernest & Young study estimates that extending the tax credit would cost $15.7 billion over ten years.

The tax credit should be dropped and, as a matter of fairness, EV owners be required to contribute to the highway trust fund.  A bill introduced by opponents of the tax credit would establish an annual tax for EV owners, which would generate billions of dollars for the repair and maintenance of the nation’s roads and bridges. 

Like the dream of electricity that’s too cheap to meter, the reality of a world run on plug-in EVs generated from renewables continues to recede, despite expensive tax credits and highly subsidized research and development.

Basically, switching the U.S. car fleet to more EVs won’t be easy. In recent years, the fuel efficiency of gasoline and diesel cars has increased dramatically.  Some models get more than 40 miles per gallon and can go 500 miles on a tank of gas.