By on August 8, 2014

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One of the bloodiest battlegrounds in the electric car wars is the topic of government subsidies for EV purchases. In the American case, it’s the $7500 federal tax credit for EVs and the various state incentives including California’s current $2500 rebate. In Europe and Asia, a variety of EV promotion schemes have frequently been the subject of acrimonious debate.  Much of the disagreement arises regarding the perceived “fairness” of rebates: defenders of subsidies generally claim that they help put EVs in the hands of middle-class consumers, with critics charging that they only serve to line the pockets of the wealthy. Now one California lawmaker wants to revamp the state’s subsidy program by capping the income level for households receiving EV rebates.

The LA Times reports that State Senator Kevin de Léon of Los Angeles has introduced a bill that would restrict who is eligible to receive EV subsidies by income level. Under California’s current statute, anyone who purchases a new EV is eligible for a $2500 cash rebate on top of the $7500 federal subsidy. De Léon’s bill, which has passed the California Senate and now waits to be reviewed by the Appropriations committee, would authorize the state’s Air Resource Board to limit eligibility for the program by income. It would also increase the incentives available to middle-class and lower-income consumers. This would include $1500 for junking a “high polluting” vehicle, and $3000 for purchase of a “clean air vehicle,” in addition to the $2500 already on offer for an EV. In addition, incentives would be weighted so that residents in areas with poor air quality (such as Los Angeles) might be eligible for more money.

De Léon and the bill’s other supporters cite research showing that under California’s current system, 90% of EV subsidy recipients are households making over $100,000 a year. Almost half of Tesla Model S buyers make $300,000 a year. By shifting rebate money away from those who arguably don’t deserve it and would buy expensive cars like the Model S anyway, de Léon and the environmental groups supporting him believe they can put more EVs within reach of the middle class. It would also save money in what has turned out to be an underfunded program: thousands of people are currently on a waiting list to receive rebates after program funds ran dry. If the Air Resource Board wants to increase the portion of zero-emission vehicles on California roads to 15% of the vehicle fleet by 2025, it will certainly take more effort. As of now, EV’s make up a little more than 1% of new vehicle sales in California, with plug-in hybrids adding an additional 1%.

Although de Léon’s intentions are admirable, they’re also misplaced. California is currently the headquarters and sole manufacturing location for Tesla, the hottest EV brand on the planet. Although a rep for Tesla was quoted as saying that the company has no official position on subsidies and that “there is a fair argument that wealthy people have less of a need for rebates than others,” there’s no point in being coy. If rebates help move more Teslas off the showroom floor and into the garages of consumers, it’s a huge win for an economy that has led the country in high-tech manufacturing for decades. It’s no secret that Tesla’s bitterest critics have come from some of the states that poured hundreds of millions of dollars into attracting and subsidizing their own auto plants. The debate over EV subsidies is largely an extension of that same regionalist backslapping, where committed state boosters (especially in the Southeast) are more than willing to spit fire on industry rivals behind a fog of poorly articulated “principles.” Giving back a small rebate to some of the state’s biggest taxpayers is hardly more odious than diverting education funds for industrial recruitment.

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93 Comments on “California Bill Would Cap EV Subsidies By Income...”


  • avatar

    “Almost half of Tesla Model S buyers make $300,000 a year. By shifting rebate money away from those who arguably don’t deserve it and would buy expensive cars like the Model S anyway, de Léon and the environmental groups supporting him believe they can put more EVs within reach of the middle class”

    The government should no more subsidize EV and Hybrids than they should send checks to owners of 6.2-L HELLCATS.

    If you have to subsidize something it means it isn’t successful on its own merits. If the free market is allowed to work, TESLA would have gotten investors and built/sold their cars on their own merit.

    That’s why they could pay back the government so easily – wherein the Chevy Volt is a FAILURE that wouldn’t sell without the constant subsidy since – unlike the Model S – it’s a small car with a craplastic interior…

    And let’s not mention FISKER.

    I was sucked in by the hype around the Model S and completely amazed by the car – in the very beginning. Elon is a genius at smoke & mirrors.

    #1 He made it seem that the Model S would be “affordable” by offering a low-end model lower than $60,000 with a government rebate for those who weren’t paying AMT.

    #2 He sent PERFORMANCE versions to test drive rather than the base model (that’s like using a HELLCAT as a test drive for all Dodge Challengers)

    #3 He blitzed the media and email with a 24/7 quick-response-to-criticism campaign. I’m still getting emails over my purchased stock like every other day.

    But now that the hype has warmed, you realize:

    The model S ISN’T affordable unless you normally buy $80,000 cars. These vehicles are toys for the rich – allowing them to skate through HOV lanes whether they have a load of family members, car poolers or not.

    END THE WELFARE.

    CALIFORNIA has lost millions of residents over the last decade because it’s an out-of-control welfare state. YOU CAN’T have an open border policy AND a Welfare state… the middle class leaves and all you have left is the poor and the rich. Income gap spreads.

    Meanwhile, STUPID MSNBC wants to criticize Rick PErry for dropping taxes on businesses – which ATTRACTS them to Texas and brings in factory work…and they simultaneously want to CLOSE THEIR BORDER to illegal walk-ins – while the Federal government does nothing about it- allowing more illegals in.

    Rich people ALWAYS benefit from welfare because of “subsidy capture”. It means that they can pay their workers less and they’ll just have to supplement their income with welfare. If there wasn’t so much welfare, they’d have to pay their workers more or they’d quit.

    In this case “subsidy capture” also means that while those California residents can’t hope to buy even a base Model S, the rich will swoop in to take advantage of the discounts, subsidies and HOV lanes.

    Don’t confuse free market with Crony Capitalism…

    Free the Market and all our problems will take care of themselves.

    • 0 avatar
      sco

      Where to begin. First lets be factual – CA population in 2003 = 35,484,453, in 2013=38,332,521. Yes people move in to CA and leave just as in any other state and yes the income gap is spreading in CA just as everywhere else. And yes there are state budget problems as there are in any number of other states, blue or red (if one can really even define a state in such a manner including CA which is blue at the coast and very red inland). This sort of CA-bashing gets no one anywhere esp on a car site.

    • 0 avatar
      AJ

      Right on!

  • avatar
    DeadWeight

    California, the new suckhole, pushing businesses and residents out of their insane state,with harebrained scheme after harebrained scheme, born of a lack of sufficient revenue to support what is an unsustainable state budget (only to grow worse at a rapid pace), which itself was conceived and nurtured to defective (Ponzi-fied) maturity as one ginormous harebrained scheme.

    When dot.com v2.0 pops, and it will, there will be no where to run nor hide, whether in Silicon Valley or Stockton or Sacramento.

    You do have lovely weather, San Diego. No one can ever take that away.

    • 0 avatar

      +1 MILLION

      ask them why TEXAS is doing better than they are.

      • 0 avatar
        Dr. Kenneth Noisewater

        http://gas2.org/2014/05/09/texas-offer-2500-tax-credit-alt-fuel-vehicles/

        For the first 2000 eligible EVs/plugins.

      • 0 avatar
        George B

        Big truck, Texas has a robust state constitution that severely limits the power of state government. More government functions are pushed down to the local level. The result is both people and businesses can easily move to a place that has the level of government services they want to pay for. I doubt that Texas has a better class of government official, but the constitution and local competition keeps them on a shorter leash.

      • 0 avatar
        guevera

        Texas has a poverty rate of 16%. California has a poverty rate of 13%. Neither state is doing well, but it would seem Cali is doing better than Texas in that regard.

        • 0 avatar
          Landcrusher

          Guevera,
          The thing about statistics like that is that they tell you nothing. Even with a source and full methodology disclosure (which modern humanities academia is VERY fond of hiding) and confidence the stats are honestly reported, the stats are very often designed to mislead.

          I can assure you that the poorest Texans aren’t being reported, likely same for Cali, and that you can work minimum wage in Texas and live much better than than my middle class parents did in the years before I was born. They were by no means poor, either.

  • avatar
    S2k Chris

    It sorta warms my stoney, cold, right-wing heart when the liberals get all bent out of shape trying to reconcile their conflicting policies, or even better, when those policies cause an outcome that is undesirable to them. “Let’s get people to buy electric cars!” “Wait, the way we got people to buy electric cars is to give rich people tax breaks!” “I want to save the earth, but I hate rich people, what do I do?!?!”

  • avatar
    jandrews

    Hey look – a terrible regulatory idea proposed by California liberals. Who would’ve thought.

    Firstly, when you perpetrate class warfare, favoring those with less, you effectively tell those with the most to spend and invest “you are less worthy because you have more” – incentivizing them to do their business elsewhere.

    Secondly, subsidies are supposed to operate supply-side by doing one of two things: either encouraging people (anyone, everyone willing) to do business within an industry by diminishing a price barrier, or to ensure a minimum price of a product by buying excess that would flood the market (see: agricultural subsidies). Either way, subsidies are NEVER based on the consumer’s means, because that misses the whole point

    Lastly, just my humble opinion, subsidies shouldn’t be something the government is in the business of anyway. If electric autos don’t create enough of a value proposition to lure business away from petrol powered ones, then they’re not ready for prime time and the companies producing them have more work to do. They’ll sell on their own when they’re worth the price.
    ‘t

  • avatar
    Landcrusher

    Senator de Leon has a good point. Rich people don’t need a subsidy.

    :)

  • avatar
    Sky_Render

    Ever visit California? That place is so expensive that a family making $100K a year is barely Middle Class.

  • avatar
    Master Baiter

    $100K is middle class for most of California’s population.

    $300K, or 3X middle class is hardly rich; more like upper middle class in LA and the Bay Area. You can easily pay $1M for a 3 BR ranch around here. Rich people have yachts and polo ponies. $300K doesn’t get you anywhere near that.

    In the long run, CA is screwed, as the population seems to think electing different Democrats is the solution. Fortunately, I only need to eek out another 10 years or so in this loony bin before I retire in the southeast.

    • 0 avatar
      DeadWeight

      I have a cousin who is a pediatrician in her 3rd year of practice who lives in the Oakland Bay area, and she has told me that, and I quote, “I love it here because it’s a much more walkable city than most, which I prefer at this stage in my life, but I honestly doubt that I could ever retire comfortably here even given my projected lifetime earnings.”

      The cost of living in any otherwise desirable area of California is going to kill the state (complete the task, since it’s a process underway), unless there’s some intervening divine miracle that no one can anticipate.

      Moonbeam Administration is high as a Grateful Dead Head in its very loud boasting of a “healthy current budget,” too, since it is using some accounting that would make Madoff blush in arriving at those bottom line figures.

      • 0 avatar
        bball40dtw

        My sister goes to school in Monterey, CA. Before she left, she was excited for the progressive paradise of a small liberal school, near the ocean and San Francisco, where she could study enviromental policy. After a semester, she is grappling with the real world costs of living out there. Since she is going to the Peace Corps, she just has a year until she is sent to somewhere more affordable, like Honduras, Ecuador, Nicaragua, or Columbia.

        • 0 avatar
          28-Cars-Later

          Idealism does not always translate into reality.

          • 0 avatar
            bball40dtw

            She’s starting to realize that. She has also realized that her older brother will send her cash and a case of Founders All Day IPA or Porter just because. That is a case of idealism becoming reality.

    • 0 avatar
      redav

      I have noticed certain trends in media & politics. “Middle class” means nothing–it is a term that people like to hear, and so it is used to build popular support/agreement, but it’s never used to refer to an actual group of the population. People project themselves onto it, whatever their conditions may be.

      An interesting corollary is that most people are mostly ‘normal,’ and that income/wealth doesn’t make them different people. People with higher paychecks aren’t evil, neither are people who make less. They just have different means to buy stuff.

      The term “rich” suffers the same problem. Many think of the “Lifestyles of the Rich and Famous.” But that’s not even the 1%; it’s more like the 1% of the 1%–they’re outliers and serve only as a representation of the idea of being rich. In fact, the ‘rich’ are merely those who make more than us. I make more than the average Joe, and while I think of myself as rather normal, I have to accept that most of America would think of me as rich, albeit I don’t see myself that way. Similarly, even America’s poorest are much richer than most of the world (hence immigrants do hard labor in terrible conditions for such low wages–it’s still better than where they came from).

      • 0 avatar
        Master Baiter

        “…income/wealth doesn’t make them different people.”

        While I mostly agree with what you’re saying, there are cultural differences between the classes that can’t be ignored. My idea of a good time is sampling reds at a nice winery in the mountains. Other’s idea of a good time is pounding beers and smoking cigarettes in the parking lot before a Raiders game. I have no desire to hang with those people. Doesn’t make me better…just saying.

        • 0 avatar
          bball40dtw

          Well, you are probably better than Raiders fans. I’ve been to Oakland–Alameda County Coliseum for a Raiders-Lions game, and I think I was safer in various hot zones the US Army decided that I was going to enjoy.

          For the record, I had a better time at various wineries in the Livermore Valley the day before.

  • avatar
    petezeiss

    So, ignore any social iniquity and glaring technological inadequacies, just move those Teslas?

    J. Emerson, you’ve succumbed to Religion.

  • avatar
    Landcrusher

    On another note, I caught lots of flak for espousing the principle that telling people a tax is for one thing, and then using it elsewhere is wrong.

    Now Mr. Emerson believes it wrong for Alabama to “invest” it’s education funds to attract new businesses.

    I have to ask. Do you agree with my principle, or do you object only if the money is misused in a way you disagree with?

    Edit: Of course, I disagree with the idea of using ed funds for incentives.

  • avatar
    Fred

    I guess I’m the odd one here as I’m moving back to California from Texas in a few years when I retire. Don’t believe everything you hear on Fox news, both states have their political obstacles to overcome.

    • 0 avatar
      LALoser

      You got that right Fred. I have been working in the DFW area for the last 90 days or so. Can’t wait to get out next week….if they sign the turn over papers…

  • avatar
    SCE to AUX

    Teslas don’t need subsidies to move them, but it’s also unlikely middle class people will be buying one anyway, even with a subsidy.

    The real stakeholders in this argument are the Leaf and Volt, whose sales have benefited the most from subsidies.

    Since the liberal tree-huggers’ goal of subsidies was to save the earth, why does it matter whether the saving is done via Tesla, Nissan, or GM (which are selling in roughly equal measure now)? I suppose that by slewing the subsidies to middle income people, you’ll end up fielding more cars like the Leaf and Volt than Teslas, and therefore get more EVs on the road.

    • 0 avatar
      Pch101

      “Teslas don’t need subsidies to move them”

      Sure they do. Raise the price of the vehicle in order to make up for the loss of the subsidy, and demand will decline. The net result of the subsidy for the OEM is to lower the price of the car, which reduces the company’s losses. The ultimate beneficiary of the subsidies is Tesla.

      • 0 avatar
        285exp

        Nobody’s raising the price of the vehicle, they’re just not getting the state to help rich people buy luxury items, and I rather doubt that the people who are in the market for a Tesla S are really going to be deterred by a $2500 price increase. People in other states are buying the things without the state kicking in, I’m sure the folks in California can manage too.

      • 0 avatar
        Landcrusher

        PCH,
        Tesla is likely getting much of the value of the subsidy, but not all. It doesn’t work that way.

  • avatar
    Pch101

    “Giving back a small rebate to some of the state’s biggest taxpayers is hardly more odious than diverting education funds for industrial recruitment.”

    More to the point, it doesn’t actually cost anything.

    It’s a matter of juggling numbers around in order to get to a net result. If High Income Taxpayer #1 either (a) has a tax bill of $1X, or (b) has a tax bill of $1.2X that is then reduced by a rebate or credit equal to $0.2X, then he still ends up with a net tax liability of $1X. The difference between scenarios (a) and (b) is that (b) motivated an additional activity by the taxpayer that scenario (a) did not.

    • 0 avatar

      This doesn’t make sense to me. It seems to me that hi income taxpayer has either one liability or the other. Either way, if he buys the Tesla, he gets the 7k (or whatever it is) subsidy from the rest of the taxpayers. Can you try rephrasing it?

      • 0 avatar
        Pch101

        The point is that the tax rates get set based upon a net revenue target. The system of credits, deductions and rebates is used to motivate behavior on top of hitting the target.

        Much of the tax code is structured around behavior modification. Overcharge on the top line, then provide opportunities to reduce the bottom line of the tax bill by participating in economic activities that the government favors.

        • 0 avatar
          Fred

          What you describe is why the tax code is such a confusing mess.

          • 0 avatar
            Pch101

            One man’s mess is another man’s home mortgage interest, 401k or charitable deduction.

          • 0 avatar
            DeadWeight

            “And then a reasonable person proposed a flat tax, allowing individuals and businesses alike to literally compute their income tax obligations in mere minutes, using basic math, and file their income tax returns on a postcard size return…

            …and hundreds of thousands of accountants, attorneys and other ‘tax professionals’ drew their daggers and unleashed their lobypbyists , and made the most direct threats and bribes towards the legislators, whilst baring and gnashing their gnarly fangs & wailing & hissing.”

          • 0 avatar
            DeadWeight

            “And then a reasonable person proposed a flat tax, allowing individuals and businesses alike to literally compute their income tax obligations in mere minutes, using basic math, and file their income tax returns on a postcard size return…

            …and hundreds of thousands of accountants, attorneys and other ‘tax professionals’ drew their daggers and unleashed their lobbyists , and made the most direct threats and bribes towards the legislators, whilst baring and gnashing their gnarly fangs & wailing & hissing.”

          • 0 avatar
            Pch101

            It’s ironic that many of those who favor a flat tax because of its simplicity don’t understand what a flat tax is.

            A “flat tax” refers to the elimination of tax brackets. With a flat tax, every taxpayer is taxed at the same percentage rate.

            Having a system of deductions, credits, etc. is a separate matter. Those items serve as reductions to income, which determine the “income” that is subject to taxation.

            It is possible to have a flat tax system with fifty gazillion deductions, credits and the like. It is possible to have a progressive tax system (higher rates for the wealthy) with no deductions, credits, etc. The number of tax brackets and the variety of deductions, etc. are different matters.

          • 0 avatar
            DeadWeight

            Pch, you have this habit of presuming things that you should not.

            My understanding of and support for a flat tax (as a % of income) is of the type that eliminates all deductions and other carve out exemptions, whether at the individual or corporate level.

            Hence, my reference above to the incredible simplicity of computing taxes under a flat tax system versus the one the now have, which creates the need for so many accountants, tax attorneys and other “industry’s’ professionals (and that would cause them to fight it tooth & nail).

          • 0 avatar
            Pch101

            So if the dealer tells you that you can’t get the sunroof and air conditioning without the undercoating, you believe him.

            You’re being bamboozled by advocates for the wealthy whose goal is to lower their own taxes by raising yours. Their objective is to cut the rates of the top brackets that most people will never have to pay, while getting people like you to support a tax cut for the wealthy with a “simplicity” argument. This is a classic con game, in which they mislead you by getting you to stare at the wrong thing.

            The existence or elimination of credits, deductions, etc. and the progressivity of the income tax system are two separate matters, as I explained. A system can have both, one of them or neither.

        • 0 avatar
          Big Al from Oz

          @Pch101
          I love the way you change your arguments.

          eg; Much of the tax code is structured around behavior modification.

          How come you claim the chicken tax doesn’t affect pickup buying and production behavior then???

          A bit of a chameleon are we? I suppose your chicken tax view doesn’t support this argument.

          You really pose salient arguments!

    • 0 avatar
      jim brewer

      Yes, of course it costs something. Its the functional equivalent of a direct expenditure. Quite a few tax credits are directed at upper income individuals or corporations. For example, solar tax credits.

      The idea that it is “not real money” is just really pernicious. Aside from the issues of tax policy it is really hard to write a tax credit that can be useable but not abused. This is how the Teaparty geniuses in Arizona handle their version of alternative fuels tax credit: http://www.sfgate.com/politics/article/Arizona-Taxpayers-Fuming-Over-200-Million-2720374.php

      • 0 avatar
        Pch101

        You’re not getting the concept.

        Let’s say that Government X needs to collect $1 billion in revenue. In that instance, tax collections are the same whether the government hands out bills that total $1 billion, or whether it bills everyone $1.2 billion while offering $200 million worth of tax reductions. In either scenario, the government still collects $1 billion.

        The difference is that in the second scenario, there will be some taxpayers who will jump through hoops in order to get the $200 million in rebates, etc. The additional activity generated in return for the $200 million is what the government wants in this example: It gets the money, plus the activity.

        • 0 avatar
          jim brewer

          Right. The government has revenue needs that have to be met overall. As you point out, these tax credits add a lot of complexity to the system.

          • 0 avatar
            Pch101

            In a system that taxes income, there is always going to be the need to define what “income” is. Income does not equal gross revenue, and there need to be rules for determining the difference. That isn’t always easy, but it’s preferable to the unfairness of taxing top-line revenue.

      • 0 avatar
        Landcrusher

        Interesting, that’s exactly the opposite of what the tea party stands for. Why do you blame it on them?

      • 0 avatar
        mypoint02

        “This is how the Teaparty geniuses in Arizona handle their version of alternative fuels tax credit: http://www.sfgate.com/politics/article/Arizona-Taxpayers-Fuming-Over-200-Million-2720374.php”

        Might wanna check the date on that article as it predates the Tea Party movement by about 8 1/2 years.

      • 0 avatar
        Jeff Semenak

        “Teaparty geniuses in Arizona”
        From the article header…
        Published 4:00 am, Wednesday, December 20, 2000
        I’m amazed that tea-party activists in Arizona were passing a law in early 2000. Since no one would have known what the tea-party was until it formed in 2009.

        Try again foolish person

  • avatar

    My brief googling suggests that the cost in Europe of EV subsidies per ton co2 mitigated is enormous–at least 900 euros.

    http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP201102.pdf

    This suggests that if the goal of EVs is to mitigate CO2, the subsidies are a huge waste, becuase you can mitigate most co2 emissions at far, far lower costs.

    Of course, there are the geopolitical and air pollution health effects to consider.

  • avatar
    canddmeyer

    There shouldn’t be any subsidies.

  • avatar
    redav

    I understand and appreciate the arguments that subsidies should not be given to the wealthy because they don’t need it. I also understand and appreciate the arguments that people shouldn’t be discriminated against based on their income.

    Would it be more ‘fair’ (whatever that happens to mean) to concentrate EV subsidies on those who have a greater need for them? Sure, I can agree with that. Would such subsidies be as effective in achieving their goal? No, I think the range of barriers to people buying EVs is much more complex than a price tag and/or subsidy.

    I’m no social economist, but it would seem better to assign subsidies based on the car, how it meets the goals of the program and how useful it is to everyone. If it’s an uber-luxury or some other highly specialized car, it probably shouldn’t have much of a subsidy. If it’s meant as utilitarian daily driver suitable for anyone, then give it the max subsidy. I don’t like the subsidy to be a tax write-off (where you must pay a certain amount in taxes to get access to it).

    • 0 avatar
      S2k Chris

      “I understand and appreciate the arguments that subsidies should not be given to the wealthy because they don’t need it. I also understand and appreciate the arguments that people shouldn’t be discriminated against based on their income.”

      What simpletons don’t understand is that you don’t give a subsidy to a person because they need it, you give it to them to incentivize them to do something you want them to do that they likely would not otherwise do. Basically, them doing “X” is advantageous, and more advantageous than subsidy Y costs that you pay them to do X. What THEY need or don’t need is irrelevant, it’s about what YOU need. It’s like saying I won’t pay Best Buy for that $500 TV, Best Buy is rich they don’t need my $500. That’s probably true, but nevermind Best Buy, is it worth $500 to YOU to buy that TV? If yes, buy it. If not, don’t. The impact on BB is irrelevant.

      And on the subject of subsidies, as an admitted right-wing nutjob, I get the whole “hate government spending” thing, I really do, but look at the whole equation! What does the government spend to keep gas plentiful and (relatively) inexpensive? Who of us right wingers wouldn’t love to tell the Saudis and Iranians and the Russians to go piss up a rope, we don’t care about your oil any more? Wouldn’t it be better to give $7500 to Americans to buy American cars (Tesla and Volt, screw that weirdo Leaf ;)) built by American workers in America by American companies? Or would we rather try to keep the camel jockeys from killing each other long enough to keep sending us oil? Screw that, man. Like I said, I hate it when the gov’t spends money, too, but I can’t see how incentivizing EV and alternative fuel vehicle ownership ISN’T a step towards energy independance, and that’s EXACTLY the sort of government spending that should be done.

      • 0 avatar
        darkwing

        Remember, to keep your right-wing nutjob card, you have to look beyond the emotional arguments to the costs and benefits. (AKA “hating the poor” and/or “being racist”).

        By that logic, I think it’s hard to argue that alternative energy down the road is more destabilizing to anti-American interests than cheap domestic energy today. So wouldn’t that money be better spent locally?

    • 0 avatar
      dtremit

      See, that’s the thing; the “need” for EVs isn’t really individual. Sure, some folks might save on commuting costs by driving an EV. But in reality, they’re not practical without a garage, which most people who would actually see a quality of life increase from spending that money elsewhere don’t have.

      The need for EVs in California is collective — in theory, the state needs fewer polluting cars to reduce smog levels. It oughtn’t matter who gets them, rich or poor. A rational preference would be for those who can replace the most miles of gas-fueled driving; a rational subsidy cap would probably be at the difference in price between an EV and an equivalent gas model.

    • 0 avatar
      Master Baiter

      We’ll just hire one government bureaucrat for every citizen to interview them before each purchase to decide how much subsidy they deserve.

      We already have low income subsidies for virtually everything we buy, or at least everything the government has their hands in: housing, food, utilities, cell phones, child care, medical care, transportation, internet access and more.

  • avatar
    Andy

    Hoo boy. This will get interesting.

    My $0.02: Let them put their money where their mouths are. If you’re going to be smug about your EV being better than my truck, forfeit the tax credit to prove that you really are a tree hugger and not just looking for a tax break.

    • 0 avatar
      sunridge place

      Yeah, Truck buyers never get tax breaks.

      http://www.section179.org/section_179_vehicle_deductions.html

      • 0 avatar
        Big Al from Oz

        @sunridge place
        You are correct. (trucks are subsidised, but not directly at the car yard with rebates or handouts).

        They get protection via the taxation of competition.

        That’s not very fair is it……..now.

        • 0 avatar
          Landcrusher

          Only they are not subsidized.

          Trucks often benefit from tax exemptions and protectionism. I am unaware of any subsidies.

          • 0 avatar
            Big Al from Oz

            @Landcrusher
            I’ve already provided you a link that defines the word “subsidy”.

            Pickups are protected by a raft of subsidised measures, via, draconian import tariffs, manufacturer tax dollar support, technical barriers etc.

            A subsidy doesn’t mean a physical handout. A subsidy is any instrument that either promotes a particular product.

            A subsidy is also an instrument that deters a product from competing against another product.

            This is measurable in dollar and cents.

            So stop with your second grade definitions and terminology.

          • 0 avatar
            DenverMike

            @BAFO – How is it that pickups like the Tundra, Titan, Frontier, etc are “protected” and “subsidized”, and why doesn’t it help OEMs sell the turkeys?

          • 0 avatar
            Landcrusher

            IIRC, after much demanding by me, you came up with a link to a report where someone defined the term the way you like for the purposes of their report. That’s acceptable if done properly. It does not change the definition. If you want to do so in your post, please do. Just make it clear that’s what you are doing.

            Is it really so hard to use the proper term for what you mean or do you find some need to equivocate in order to keep down your internal dissonance? Perhaps misinformation is your intent? Trying to insult your opponent is right out of the propaganda playbook after all.

          • 0 avatar
            Big Al from Oz

            DiM from Winnipeg,
            WFT?

            Worry about your Canadian issues.

          • 0 avatar
            DenverMike

            @Big AFO – Thing is, and you don’t want to hear it, you can’t have it both ways. You can’t cherry pick which trucks are protected/subsidized. All or none.

  • avatar
    SCE to AUX

    The $7500 Federal subsidy I ‘received’ for my Leaf was not a tax break, since Nissan simply took it off MSRP. So my 2012 taxes/income had nothing to do with it, and naturally I couldn’t claim the vehicle purchase on my taxes. This was Nissan’s way of moving vehicles without their customers worrying about whether they’d receive the entire tax credit.

    But this story is about the state subsidy. When I received mine in 2012, Pennsylvania was having trouble unloading the 500 subsidies they had available. That has probably changed by now.

    Here’s my conundrum:
    I’m not ‘green’, but I like saving money on gas and I’m no fan of pollution (which CO2 isn’t).
    I wouldn’t have gotten the car without a subsidy.
    Philosophically, I don’t believe in subsidies, although the PA subsidy cost only about $0.16/resident.
    I’ll pick up money if it’s on the table.

  • avatar
    jim brewer

    Well I hope they weren’t planning on subsidizing electric cars forever. Why all the teeth gnashing? Concentrating the subsidy on marginal buyers only makes sense.

    • 0 avatar
      Landcrusher

      The existing subsidy is well designed to increase the number of marketable electric car purchases.

      Any scheme to aim that at only marginal buyers will likely either fail the accuracy test or fail to be an adequate subsidy. Someone always finds a loophole unless the regulations are so goofy that the poor need a lawyer to benefit.

  • avatar
    TW5

    Federal subsidies are already phased out for upper-income buyers. Income phaseout for California subsidies is appropriate.

    However, the EV credits have quite a few problems. The middle class citizens, for whom the credits are intended, rarely consider electric vehicles. The benefactors of these subsidy programs are the nearly-rich upper-income households of the top 2%-10%, who are wealthy enough to afford electric vehicles, yet “poor” enough to get most of the credit benefits.

    If the government is serious about reducing fuel consumption, rather than propping up EV companies, they will expand the credit/subsidy programs to cover any vehicle that meets a certain threshold or uses an alternative fuel.

  • avatar
    jim brewer

    Whoever said these were intended for middle class citizens? It would have been obvious at the outset that these were intended for the mildly affluent (Nissan Leaf) to the very affluent(Tesla).

    There are lots of unintended consequences with these tax subsidies. The more aggressive the subsidy the more wayward results you are likely to get. For example, in the fifties, France taxed cars by horsepower. Other European countries taxed by engine displacement. Fifty years later, as between Germany, France, Italy and Britain, who has the high performance car market?

    Assuming California wants to sharpen the system, for the next few years I would phase out the subsidy between say, $250K and $300K AGI. The top half of the market that would buy a Tesla anyhow doesn’t get the subsidy.

    I would consider moving more to a per mile subsidy. The average gasoline vehicle effectively receives a per mile subsidy of around two cents per mile. To modestly promote electric, you would have to offer a 3 cent per mile subsidy Probably the owners would have to get their odometers checked along with their annual inspection. The subsidy would be administered with the motor vehicle tax, in the form of a credit against annual registration fees. I would make the credit “refundable” (i.e. you can get a check back) only up to $100 bucks. The advantage would be: The subsidy would be more available to used car (i.e. middle class) buyers. The subsidy would indirectly encourage third-party repair and maintenance of these vehicles as they fall off their warranties, but still get driven. They would mildly encourage the sale of more durable vehicles which has an important environmental impact. It would be administered through a tax program that is not so overburdened with these gimmicks. It would mitigate the effect of the loss of the subsidy to the wealthier drivers.

    • 0 avatar
      Landcrusher

      Jim,
      You keep saying “subsidy”, I don’t think it means what you think it means.

      I suppose you think there will be a subsidy for gasoline?

      • 0 avatar
        Big Al from Oz

        @Landcrusher
        Maybe you are the one who doesn’t understand what subsidisation is.

        I’ll explain subsidisation using Matchbox cars as an example.

        Now suppose Mommy and Daddy give you an allowance of a quarter per week.

        You want to buy a pickup truck. There are several manufacturers, ie, Corgi, Matchbox, Hotwheels, etc.

        Only the Matchbox is manufactured in the US, you want the Corgi manufactured in the UK.

        You get online and find out that a Matchbox is valued at $2.00 and a Corgi is $1.80 + a 45c tax. Let’s for argument sake call the tax the “Chicken Tax”. What is this tax used for? The impact does the tax have in the toy pickup market?

        The problem is the Corgi isn’t available, because the tax makes it unprofitable to be sold at your nearest Toy Store and imported into the US.

        But you want the Corgi pickup. You finally decide to buy the Matchbox truck.

        Is the Matchbox pickup subsidised by the lack of the Corgi’s availability?

        If the Corgi was available at $1.80 you would have bought it, but you were effectively forced to purchase another product.

        So, you being a 2nd grader jump up and down with tantrums, etc. This doesn’t atone the problem.

        Another scenario, based on the story above, same companies and countries of manufacture.

        Except this time the Matchbox pickup in the US is the only pickup that has a 25% rebate by the government if you buy it? The Hotwheel’s and Corgi’s don’t receive the 25% rebate?

        Is the rebate then considered a subsidy?

        • 0 avatar
          DenverMike

          @Big BAFO – One problem with your little example is the Corgi Co would exercise the option to wrap up final assembly in the US. And the 25% drops to around 2% or less, depending on how much volume there is to defuse the expense of final assembly. Could be a couple pennies per truck if they can keep the assembly line going nonstop. The biggest problem would be lack of true demand. That’s kinda essential.

          Then it’s no different than US consumer seeking other niche products or autos, not sold here. Like Peugeot, Renault, Tata, Chery, etc. Most Americans couldn’t be interested in obscure stuff in the slightest, but yes there are some odd/weird US consumers that would love the opportunity to own/drive them. But too many of those aren’t looking to buy them new. And the OEMs that don’t sell here, may not be remotely interested in selling to American cheapskates, bottom feeders, etc, especially fleet.

          • 0 avatar
            Big Al from Oz

            @Winnipeg DiM or wherever you claim to come from today,

            As many others have stated to you.

            Provide links to support your drug induced trolling.

            You really are a winner (sic) or loser.

          • 0 avatar
            DenverMike

            @Missing Link BAFO – What exactly do need a “link” on? Like EXACTLY..

            It’s no different than if you claimed Bigfoot exists, then demand I “provide a link”, proving he doesn’t exist!!!

            It’s your conspiracy theory, not mine. I can’t help you. But do seek help…

        • 0 avatar
          Landcrusher

          Subsidy
          : a grant or gift of money: as
          a : a sum of money formerly granted by the British Parliament to the crown and raised by special taxation
          b : money granted by one state to another
          c : a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public

          Why is it you feel the need to call a tariff a subsidy? Why not call a subsidy a tariff?

          I’m not responsible for your state of mind. You have been played a game upon, and it was not by me. You won’t believe me when I tell you the truth, so go figure it out for yourself. You might have to search objectively to find objective truth.

      • 0 avatar
        jim brewer

        Yes indeed, there is a subsidy for gasoline powered vehicles. roads are about half paid through general revenues.

        • 0 avatar
          Landcrusher

          Jim,
          That wouldn’t be a subsidy, actually.

          What you may have heard is something to the effect that the building of roads behaves like a subsidy for auto use over mass transit.

          Let’s say you put a board on two dowels and roll it. The dowels act like wheels. You don’t then go to a store and ask for a wheel when you want a dowel.

          You can properly say that the building of roads acts like a subsidy for automobiles, but if you say only gasoline ones, or put a number on it, you are bound to be wrong.

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