WaPo: Kill The EV Tax Credit!

Bertel Schmitt
by Bertel Schmitt
wapo kill the ev tax credit

An op-ed piece in The Washington Post praises the wisdom of Congress that refused to renew the 45-cent-per-gallon tax credit for corn-based ethanol and the 54-cent-per-gallon tariff on imported ethanol, thereby exposing alcohol to the rough treatment of the market. Also not extended was the tax credit for installing a charger at home or in a commercial location.

The WaPo thinks killing the $6 billion incentive to turn corn into fuel, and letting EV owners buy their own charger was righteous, but only a half-measure. Congress should have finished the job and should have finished handing out $7,500 tax credits to buyers of EVs. The WaPo thinks it’s a waste, and the technology is going nowhere.

“Evidence is mounting that President Obama was overly optimistic to pledge that there would be 1 million EVs on the road by 2015. Electric cars are not likely to form a significant part of the solution to America’s dependence on foreign oil, or to global warming, in the near future. They simply pose too many issues of price and practicality to attract a large segment of the car-buying public. More prosaic fuel-economy innovations such as conventional hybrids, clean-diesel cars and advanced gasoline engines all show much more promise than electrics.”

What say you? Kill the credit or let it live?

Join the conversation
9 of 107 comments
  • MrIncognito MrIncognito on Jan 03, 2012

    The problem with subsidies arises when the government tries to make specific products cheaper rather than set goals or encourage behaviors. Subsidies on ethanol are a waste largely because other methods of producing fuel are more efficient. If the government were to introduce subsidies for cars and fuels based on efficiency or lack of greenhouse gas emissions, this would accomplish the social goal much more efficiently. Command economies do not work; the government is too slow and susceptible to corrupt practices to manage an economy, and it shouldn't try to. On the other hand, there are huge costs associated with consuming gas that aren't currently paid by the consumers of the gas. The price of gas should reflect the cost of production and consumption, and the more the government can do to keep the price of gasoline near it's real cost, the more efficient the market will be. Keeping the price at the pump low is a cheap political ploy. The harder the government works to keep the price per gallon low, the more taxes will have to come from other areas. Let gas rise up to $5/gallon or more and you won't need to subsidize alternative fuels or electric cars.

    • See 1 previous
    • Dan Dan on Jan 03, 2012

      @fred schumacher Command economies always work, at destroying efficiency and output. The WW2 command economy worked in the sense that a much larger command economy successfully outproduced much smaller and even more rigid command economies. China developed out of a command economy, in that the command economy was dismantled by Deng and China then began to develop. A radio monopoly most certainly isn't a command economy because the defining feature of state management is enforcement at gunpoint.

  • Marvin McConoughey Marvin McConoughey on Jan 03, 2012

    Congress performed wisely in deleting the ethanol credits. They put upward pressure on food costs, gave car drivers lower quality fuel, and increased auto development and manufacturing costs. The subsidies cost money to apply for, money to administer, and money at the gas pump. Ethanol subsidies were a transfer of tax dollars to the states with high corn production from the states with little such production.

  • Carlson Fan Carlson Fan on Jan 03, 2012

    "More prosaic fuel-economy innovations such as conventional hybrids, clean-diesel cars and advanced gasoline engines all show much more promise than electrics.” Sorry WaPo, but you obviously don't get it. Non of the things you mentioned will do crap to get the US off imported oil or help global warming in the near future either. People drive way too much in the US and high mileage ICE vehicles combined with cheap subsidized fuel only encourages more of that behavior. FAIL! EV's encourage lifestyles that reduce the amount of time(miles traveled) people spend in their cars and run on power produced in the US. WIN!

  • FJ60LandCruiser FJ60LandCruiser on Jan 04, 2012

    So after all the political blustering of energy independence we have lost countless acres of food crops, driving up our food prices astronomically, so that we can pour 10% ethanol (and God knows how much water) into our gas tanks. And let's not even get started on the "FlexFuel" vehicles that run on E85 but get terrible fuel economy when they do so, so the cost savings of the subsidized ethanol was a total wash. As for the Government's obsession with electric vehicles: if they're so good, why can't they be produced and sold at a profit--and why do we need to throw thousands of dollars of tax incentives at the damn things to move them off of the lots. And I'm not buying a manufacturer conspiracy or ignorance on the public's behalf. Electric cars just suck, and only the Government seems to think they're a good idea, enough to pour billions of subsidies into them. Hybrids are no better, why install thousands of dollars' worth of expensive batteries strip mined from the earth to make a crappy family econobox no more efficient than powering it with a diesel engine? Oh, that's right, hybrids with their little green leaves and toxic batteries are much more eco-friendlier than diesels which are powered by Satan's fuel according to environmentalists. I'm going to go out on a limb here and go with the European model of saving fuel: diesel. Hand out a 5000 tax credit to whomever buys a small diesel wagon, throw in another 2 grand if it's biodiesel friendly and has a manual transmission.

    • See 2 previous
    • Pch101 Pch101 on Jan 04, 2012
      @Pch101 We grow ethanol corn on farmland once used for other “unimportant” things You didn't bother looking at the spreadsheets, I take it. Both in absolute terms and on a per capita basis, we produce more grain for food consumption than we did before. We produce more meat. More oils and fats. More fruit and veg. There isn't a shred of evidence to support your claim, while there is plenty to refute it. http://www.ers.usda.gov/Data/FoodConsumption/FoodAvailSpreadsheets.htm#pop