With the EV Tax Credit Threatened, Where Do Green Car Sales Stand Today?

General Motors doesn’t want it gone, highly indebted Tesla certainly doesn’t want it gone, but House and Senate Republicans would love to see the $7,500 EV tax credit die a quick death. In a sweeping tax proposal introduced last week, the credit’s nowhere to be seen.

The problem, according to many green car and auto industry proponents, is that the U.S. EV market would quickly join the tax credit in going belly-up. There’s a movement afoot to save the incentive (and the fledgling market along with it).

Assuming the credit goes the way of disco (and state-level incentives aside), electric cars would be forced to stand on their own environmental merit. It’s something free-market capitalists would love to see, but would it really spell doom for the segment? That depends on who you ask. But it might be helpful to take a look at where the segment stands right now.

In a month where total U.S. auto sales fell just over 1 percent — and in a year where only one month bucked that trend — 0.5 percent of the 1,348,625 vehicles sold in October were battery electric vehicles. That’s just under 6,800 full electric vehicles out of more than 1.3 million, according to data from Hybrid Cars.

Leading the way was the surging Chevrolet Bolt, which now sells twice as often as its faltering plug-in Volt stablemate. Compared to October of last year, EV sales rose 26.3 percent. Year-to-date, EV sales are up 24.9 percent over 2016.

But remember: the segment’s market share remains 0.57 percent for the year so far, up from 2016’s 0.45 percent. One model — the Ford F-150, accounts for about 5 percent of U.S. market share.

Plug-in hybrid vehicles saw an 11.6-percent boost in volume, year-over-year, in October, with year-to-date sales up 30.2 percent. Sounds great, but October’s plug-in hybrid market share amounts to 0.49 percent. For the first 10 months of 2017, PHEVs count for 0.5 percent of all vehicles sold in the country. That’s up from 0.38 percent in 2016.

Ignoring hybrid vehicles, as they aren’t even eligible for a partial EV tax credit, that leaves the market share of vehicles impacted by the possible credit elimination at 1.07 percent.

The country-wide introduction of the Bolt has skewed the statistics downward (it accounts for nearly 41 percent of last month’s EV sales), but until recently the vast majority EVs and PHEVs sold in the U.S. carried a hefty sticker price. The Tesla Model S and X, both down in sales for the month, soaked up nearly 30 percent of the EV segment in October.

Are those who drive green (and have plenty of green with which to do it) really going to forgo the Volvo XC90 Plug-in or Tesla Model S for an ’09 Impala? Not likely. But those who feel the urge to drive green and aren’t made of money — those who could pay in the mid-to-high $20k range for an EV, but not the mid-to-high $30k range — might be dissuaded.

In the PHEV segment, the Toyota Prius Prime, Chevrolet Volt, and Ford Fusion Energi make up more than half of the plug-in hybrid market share, each starting north of $30,000. The mystery surrounding the impact of the possible tax credit loss is that we simply don’t know how many future buyers fall into the “We can just barely afford this EV we’re planning on buying, but the incentive made it possible” category. Environmentally, what would be the impact (in terms of greenhouse gasses and fuel resources) if those scorned EV buyers trade in their old car for a more fuel-efficient one instead? Few electricity grids are 100 percent clean, after all.

What if some of the hundreds of thousands of Tesla Model 3 reservation holders say “screw it,” opting instead to wait for Mazda’s compression ignition gas engine?

China’s not going away, nor is Europe, so the electric car dream won’t die a global death if EV sales fall in the United States. Other states might create a tax credit of their own, or possibly increase the existing dollar figure. The loss of government incentive would certainly compel automakers to redouble efforts to lower production costs, thus lowering window sticker prices.

It’s not certain that this proposal is the end of the world.

[Images: General Motors, Tesla]