By on November 3, 2015

2016_nissan_leaf_18

Electric car sales in Georgia have halted after that state stopped offering incentives and started charging a $200 annual fee to recoup lost gas tax revenue, the Atlanta Journal-Constitution reported.

New electric vehicle registrations plummeted 89 percent from June to August after the state stopped offering a $5,000 tax break on top of the $7,500 federal incentive. Georgia’s incentive was one of the most generous in the country.

Georgia’s electric purge could portend a future in highly incentivized states, such as California and Colorado, where electric incentives and sales are still relatively strong.

According to the International Council on Clean Transportation, countries with direct incentives (such as tax breaks, or one-time bonus payments) have considerably higher EV sales than countries without incentives, however that isn’t always universally true.

“A counter-example is the UK, where despite relatively high incentives electric vehicle sales are still very low,” Dr. Peter Mock, Managing Director of ICCT Europe, said in a statement.

Earlier this year, British Columbia announced it would bring back clean vehicle incentives after allowing the credit to expire in 2014 and sales exploding in other provinces. Sales of hybrid, plug-in hybrid and electric vehicles rose in BC without the credit, but not as fast as sales in Quebec and Ontario.

A clean energy proponent in Atlanta said that while repealing the tax credit for EVs could save the state $66 million in 2016 and $190 million by 2020, but that spending on fuel would rise by more than $188 million over the next 16 years, lowering spending by consumers, according to a study by Keybridge Research.

“This important study shows that the ZEV credit is a smart investment for the state of Georgia, as well as Georgian consumers and businesses,” Robbie Diamond, President and CEO of Securing America’s Future Energy, said earlier this year according to Cleantechnica.

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60 Comments on “Incentive Money Gone, Electric Car Sales Have Dried Up In Georgia...”


  • avatar
    probert

    When I look for future trends in advancing civilization, I always look to the south.

  • avatar

    The real lesson here is that if you go from one of the most generous incentives in the country to the least friendly ($200 fee) overnight you can kill a market.

    Phasing out the incentive over a period of time and reducing the benefit gradually would have allowed fora softer landing rather than a train wreck.

    I suspect killing the market was the motive behind the sudden reversal.

    • 0 avatar
      hreardon

      I don’t fall into the camp who believes that government incentives to help drive behavior is 100% evil, but I would also argue that if your market collapses without any direct subsidy then there was never a real market for that product/service to begin with.

      What this helps prove is that, at least in some markets, payment and getting “the best deal” is far more important than the brand/vehicle/technology, etc. If you need/desire basic transportation and live in an urban environment where your commute is ~30 miles or less, a heavily subsidized $159/month deal on an electric car would be pretty darn appealing.

    • 0 avatar
      CoreyDL

      You’re very right Mr. W. The ol’ boil the frog slowly approach works better on consumers, from almost any angle.

  • avatar
    APaGttH

    What a shock.

    .
    .
    .
    .
    .
    .
    .

    Thank you! Thank you! I only do one show a night.

  • avatar
    Superdessucke

    Raise gas prices to be in line with the rest of the world and this won’t be an issue, trust me.

    • 0 avatar
      28-Cars-Later

      Despite merits the fact is these do not meet most people’s needs. Until battery technology improves the future is a mix of hybrid and improved ICE. I would have said diesel up until recently but war has been declared on this superior technology.

      • 0 avatar
        FormerFF

        I wouldn’t say that diesel is a superior technology for light vehicles. For most drivers, hybrids provide a better return on investment, hardcore expressway drivers excepted.

        • 0 avatar
          28-Cars-Later

          I agree, the only other benefit to a diesel is long into the ownership experience the cost of battery replacement doesn’t occur.

          • 0 avatar
            bball40dtw

            I would bet that, on average, the cost keeping up a diesel engine vehicle is more than a Ford/Toyota hybrid. Remember that the first 10 years/100k miles of the hybrid system are covered under warranty.

            Here are my estimated maintenance costs for my C-Max’s first 100k miles:

            Oil changes/tire rotations: $386
            New tires at 40k miles: $700
            Total: $1086

            Maybe I’ll have to replace the cabin air filter as well. Not sure yet.

            When I recently took my C-Max to the dealership, they said that my brakes had almost no wear. I won’t have to replace pads or rotors until over 100k miles. I would spend more money on DSG fluid changes on a VW TDI by 100K miles than I did on tires for my C-Max.

    • 0 avatar
      Sigivald

      Yeah, but why should we do *that*?

    • 0 avatar

      Despite high gas prices and incentives, EV’s have been slow to come to market in Europe.

      One of the primary reasons is high gas prices. Counter-intuitive maybe if you look at one factor in isolation, but easily explained if you realize that high cost of energy dampens overall economic activity.

      If we artificially raise the cost of gasoline through taxation the economy will tank. Trust me.

      • 0 avatar
        APaGttH

        …If we artificially raise the cost of gasoline through taxation the economy will tank…

        This, exactly this. You may ride a bike to the local farmer’s market to buy you’re locally sources tomatoes and arugula, while wearing a woven hemp shirt, but everything in the world is tied to a price of a barrel of oil. Whether it be due to raw material costs (fertilizers, plastics, medicine) or whether it be indirect costs (fuel for shipping, logistics, climate control storage, operational costs to produce) it all comes back to the consumer.

        Sure that arugula may have been local raised on an organic farm, but farmer Fred likely was driving a tractor to tend that field, and that is a hard cost that he/she is going to pass along.

        Hey I don’t care man, I ride the bus and I grow my own food. Public transit already runs largely in the red and is heavily subsidized by the taxpayers (for the record, I’m a huge fan of public transit) if the cost of a barrel of oil goes up, operational costs go up and public transit can’t pass those costs back to the riders in an easy fashion – so they bleed even more red ink, As for living off the grid, how do you think those organic seeds got to your door in the first place, along with other materials.

        Everything is dependent on how expensive a barrel of oil is.

        • 0 avatar
          krhodes1

          Oddly enough, we have methods where we can tax private use of a resource but not tax business use. See sales tax exemptions for resale as a prime example. Putting diesel in a bus? No tax. Putting diesel in your 3500HD commuter truck? Pay up the wazoo.

          Fuel at realistic prices would cure an awful lot of ills in our modern society. Don’t like it? Arrange your life to live more efficiently. $10/g gas wouldn’t impact me in any meaningful way.

        • 0 avatar
          FormerFF

          I would gladly pay an additional 20 cents per gallon for better roads.

          • 0 avatar
            28-Cars-Later

            You could pay and extra five dollars per gallon and you won’t see better roads.

          • 0 avatar
            bball40dtw

            28 is right. That $5 would go to everything but roads. In Michigan, we prop the state budget up with sales taxes on gas in addition to the gas tax. I was in Kenya this year and they had some roads that were better than the roads in the Detroit area.

      • 0 avatar
        hreardon

        “If we artificially raise the cost of gasoline through taxation the economy will tank. Trust me.”

        Correct. Look, a large Starbucks coffee is more expensive that the equivalent 16 oz. of gasoline.

        Everything is dependent upon inexpensive energy fueling growth/economic development/modern society. In isolation – higher gasoline prices would provide an incentive toward alternatives, but the alternatives need to be equivalents that don’t have the same kinds of trade offs that current EVs have.

        High gasoline prices haven’t translated into a mass consumer adoption of electrics in Europe.

        The spike in gasoline prices in 2007-2009 fueled the most rapid shift in consumer preferences *away* from gas guzzling SUVs anyone could have imagined. It was far more effective than CAFE regulations or anything else the government could have done. Likewise, lower fuel prices today have led to a major shift BACK toward SUVs that, arguable, are slightly more efficient than 10 years ago, but what it demonstrates is that people are surprisingly rational.

    • 0 avatar
      George B

      Superdessucke, I would argue that the best government action would be to simply use taxes to raise revenue and not to try to influence behavior. Government is spectacularly incompetent at such things. Let consumers figure out what vehicle works best for their own needs. There is some merit to raising fuel excise taxes to pay for road construction and maintenance, but goal should be to cover expenses.

      • 0 avatar
        05lgt

        This exactly. The first incentive to get rid of is the ridiculous capital gains not taxed as income incentive. The revenue will improve, and big government won’t be incentivizing investment. Yay.

    • 0 avatar
      raph

      Are you saying the rest of the world only comprises Europe?

      In the UAW it’s 2.00 bucks a gallon
      In Australia it’s about 3.80 a gallon
      In Canada is about 3.30 a gallon
      In Brazil it’s about 3.25 a gallon

      For example.

      In the EU it’s probably around 6 bucks a gallon on average but in trade they get cool perks like state healthcare, free higher education and so on which is never going to happen in the US.

      He’ll they wouldn’t even spend the new tax money on surplus, it would just go to more pork.

    • 0 avatar
      jkross22

      Yes, government knows best.

  • avatar
    CoreyDL

    Also that LEAF has a rubbish paint job.

  • avatar
    MK

    Yes, how dare the little people make decisions based on their own economic self-interests. We need to tax them so they don’t have a choice!

  • avatar
    FormerFF

    That $200 fee is about four times what it should be. The state of Georgia has a 12.5 cent excise tax on gasoline, if you figure 12,000 miles at 30 mpg for an equivalent car, then $50 is fair.

    • 0 avatar
      CJinSD

      Does the state get its share of the federal gas tax, because that’s an extra 18.4 cents per gallon. The average car is driven 15,000 miles a year in this country. That’s $154.50 in annual gas tax revenue lost. Compare EVs to the cars of similar weight and road wear instead of efficient econoboxes, and you’re probably well over $200 a year.

      • 0 avatar
        05lgt

        The day a southern state only gets it’s fair share of a federal tax is a long way off.

      • 0 avatar

        15,000 Miles/Yr is an overstatement and the number is going down (millennials don’t drive/own cars like the baby boomers did).

        https://www.fhwa.dot.gov/ohim/onh00/bar8.htm

        http://www.usatoday.com/story/money/business/2014/02/09/why-america-stopped-driving/5290379/

        So $138 for the average gasser per year. $200 for every EV.
        As miles driven per year go down, the disparity will continue.

      • 0 avatar
        FormerFF

        I get the impression that you’re equating EV = Tesla. I live in metro Atlanta, and around here EVS are overwhelming LEAFS, which weigh 3300 lbs, 400 lbs more than does a Sentra. I see an electric Focus as often as I see a Tesla, which is to say rarely.

        Nearly all the LEAFs around here are on 12,000 mile per year leases, which is why I used the figure I did. Look at the resale ones on cars.com, they don’t collect a lot of miles. It’s hard to rack up a lot of miles when you can only go 70 miles per day.

        I sincerely doubt the Feds are withholding funding from Georgia highway projects because it has too many EVs. If the Feds want to levy a tax on EVs, that’s their business, no reason for the state to collect the money, especially considering that the $200 goes to the state’s general fund and isn’t earmarked for roadbuilding.

        • 0 avatar
          mcs

          Shhh! Don’t tell my leaf it can only go 70 miles. I take it on a 100 mile round trip 3 times a week and if it knew it could only make it 70 miles, I’d have to push it the last 30.

  • avatar
    CJinSD

    >>A clean energy proponent in Atlanta said that while repealing the tax credit for EVs could save the state $66 million in 2016 and $190 million by 2020, but that spending on fuel would rise by more than $188 million over the next 16 years, lowering spending by consumers, according to a study by Keybridge Research.

    “This important study shows that the ZEV credit is a smart investment for the state of Georgia, as well as Georgian consumers and businesses,” Robbie Diamond, President and CEO of Securing America’s Future Energy<<

    This is how stupid people that believe in alternative energy are. 2020 is five years away. The President and CEO of Securing America's Future Energy says that wasting 190 million dollars over the next five years is worth it because it would lead to as much as 188 million dollars in additional consumer spending over the next sixteen years. Is he an imbecile, or is everyone responsible for the existence of charlatans like Securing America's Future Energy an imbecile too?

    • 0 avatar
      CarnotCycle

      “Is he an imbecile, or is everyone responsible for the existence of charlatans like Securing America’s Future Energy an imbecile too?”

      I bet Robbie pays himself a healthy six figures to scribble his little pressers and quotes. The Church of Carbontology is going to have their little Carbon Confab in Paris at end of this month. Think Robbie Diamond has a ticket, airfare, and little side vacation planned while there? Oh, of course. Think Robbie Diamond paid for any of it? Oh, no.

      Robbie Diamond is no imbecile when it comes to ‘Securing Robbie Diamond’s Future.’

      • 0 avatar
        CarnotCycle

        Oh, this is too good. I had to look Robbie up at his Securing blah-blah site (acronym = SAFE, awww!).

        “Prior to his roles with SAFE and the Electrification Coalition, Diamond served as Deputy Director of Community Outreach on Senator Joe Lieberman’s 2004 presidential campaign. Before that, Diamond was a Director at the Washington firm Fontheim International LLC, working in all practice areas of the firm. Prior to coming to Washington, he worked with senior executives at Seagram Spirits and Wine Group on special projects.”

        One can almost see Robbie’s porcine visage squeal as he gets down on all fours, for him the more natural state, to begin wallowing in his mud that is your money.

        These are the people (figuratively speaking) who will save us from ourselves with ‘policy.’

        • 0 avatar
          CJinSD

          As demonstrated by Georgia’s car buyers, the people that purchase or lease electric cars are far more interested in getting their hands on other people’s money than they are in driving electric cars. He is their spiritual leader.

  • avatar
    RideHeight

    Abstract:

    Rats have exhibited a significant aversion to pressing a lever that presented them with a mild electrical shock despite enthusiastically and repeatedly pressing the same lever earlier in the experiment when doing so rewarded them with food pellets.

    We conclude from this that there is no innate drive in rats to press levers for the sheer hell of it.

  • avatar
    SCE to AUX

    The final switch to close for me to lease my former Leaf was the incentives, particularly the way Nissan handled it as a simple price discount for a lease.

    I do not support incentives, but I’ll pick up money on the table.

    Reminder to the Tesla/EV haters: Removing incentives will hurt EV sales in general, but not Tesla sales much (until the Model 3 arrives). A $1 coupon makes a bigger dent at McDonald’s than at a steak house.

  • avatar
    Freddie

    Huge subsidies have put a handful of EVs on the road. I wonder if we’d get a bigger carbon reduction bang for the buck by spreading out those incentives to encourage the purchase of any high MPG vehicle (say, 40 MPG city or better) regardless of the technology used.

  • avatar
    mchan1

    Wonder why there’s no feelings against the state tax credit for EVs considering that it’s funded by taxpayers’ dollars?

    Sure, people can ‘help the environment’ as well as help the auto makers by buying/leasing EVs but still… those buyers are subsidized by other people.

    If people don’t care about the tax credit, why don’t they just give out money every day/week to strangers just for the sake of it??

    That’s essentially what people are doing when the state govt or federal govt gives out the tax credits for EVs (and hybrids/diesels in the past) or do they really don’t understand that??

    Worse… those people don’t care as long as they’re getting some money back which helps finance their EV purchase/lease!

    The tax credits could’ve been used for something useful like fixing up the infrastructure of local hwys/roads/bridges.

    If you want to buy the EV/hybrid, so be it.
    At least buy it with your own money!!

  • avatar
    stevelovescars

    According to the AAA (http://fuelgaugereport.aaa.com/todays-gas-prices/), GA has among the lowest gasoline prices in the country, so the incentive to drive an EV is a lot less without incentives. It’s nearly $0.80/gallon less than in CA.

    My thought is that gasoline prices are artificially low when one considers the other costs we pay. Adding these externalities into the price of gas isn’t some crazy liberal idea, it’s basic economics. Much of the trillions of dollars in federal debt we all carry is the directly related to our dependence on fossil fuels.

    I’ve heard few people decry the use of taxes to raise the price of cigarettes, but the whole argument for those “sin” taxes were similar. We as a society have a tremendous cost to cover the side-effects of smoking. Increased cost and education have reduced the rate of smoking in this country and I think we are all better for it. Granted, transportation offers a lot of benefits to our society, unlike smoking, so this isn’t a perfect comparison. My point was more that raising the cost of fuel a bit won’t necessarily crater the economy… we’re already paying for it in other ways.

    Selling more EVs eventually reduces the cost through more economies of scale, more electric cars means less fuel consumption and less pollution. Less fuel consumption increases our country’s independence and reduces costs for environmental damage, wars, corruption, and health side-effects, amongst other things.

    We have tremendous “incentives” and handouts to oil companies already. Why not shift some of these to consumers to help shift our transportation options to more sustainable options?

    • 0 avatar

      I’ll buy your arguments for the need to become energy independent, reduction of pollution by encouraging EV’s and diverting incentives away from fossil fuels to cleaner alternatives. All great arguments I can get behind.

      Can’t agree with the sin tax argument. Taxing fuel will harm the economy, cheap energy is essential to our economy. Another (humanitarian) argument against additional gas taxes is that it punishes those who cannot afford to buy an EV. EV’s are comparatively more expensive and are out of reach from the poor. The wealthy can avoid the gas tax by buying a EV, but the poor blue collar worker will pay the penalty making him/her artificially poorer, its like a poverty trap.

      More taxes are rarely to the consumers or economy’s benefit.

      • 0 avatar
        05lgt

        JPWhite,
        How would you feel about a closed loop energy tax that put every dollar collected from dirtier sources into subsidies and incentives for cleaner ones? Yes, I’m talking a carbon exchange. The consumer cost is minimized but present and still gets the benefits you can get behind.

        • 0 avatar

          If I understand you correctly, no I don’t see that being fair. It would be the poor paying carbon tax and the rich benefiting with subsides and incentives.

          I’d prefer to see tax-breaks and incentives removed from fossil fuel endeavors and put into clean energy endeavors instead.

          • 0 avatar
            Master Baiter

            That would make sense if existing ICE cars were actually dirty.

            CARBON AND CO2 ARE NOT POLLUTION! THEY ARE IN FACT ESSENTIAL FOR ALL LIFE ON EARTH.
            .
            .

          • 0 avatar

            @MB

            If cars aren’t dirty I invite you to close up your garage tonight with the car running and you in it for a good hour. I’ll duplicate your experiment at my home using my LEAF. Let’s both report back here tomorrow on how clean our car exhaust is.

            ICE cars pollute, you can’t seriously say they don’t. They may not pollute us with unicorn farts, but they do pollute with particulates, NOx and CO amongst other toxic substances. ICE cars contribute to smog in cities which isn’t particularly healthy either.

          • 0 avatar
            CarnotCycle

            @JPWhite

            In answer to @Master Baiter (giggle), you said:

            “Cars pollute, you can’t seriously say they don’t. They may not pollute us with unicorn farts, but they do pollute with particulates, NOx and CO amongst other toxic substances. ICE cars contribute to smog in cities which isn’t particularly healthy either.”

            Ol MB’s original point was carbon and CO2 are not toxic pollutants, but critical pierces of organic chemistry and (for CO2 at least) a fundamental organic molecule of the observable universe. And the dude is correct. Single oxides, particulates, and smog (which is another way to list the first two items) are nasty things, addressed in Clean Air Act.

            But EPA classifying something like CO2 as ‘toxic’ is nigh-on stupid. If you stand in a room full of nothing but nitrogen long enough, you’re toast. Is nitrogen toxic? Thousands of people suffer a horrible death from acute water contamination every year, it’s called ‘drowning.’ H2O toxic, no?

            C’mon, man.

  • avatar
    calgarytek

    Government of Quebec Electric Vehicle Purchase/Lease Rebate incentives. The max you can get is $8000.

    http://vehiculeselectriques.gouv.qc.ca/english/rabais.asp

  • avatar
    jimbob457

    $50 oil and $2.00 gasoline have pretty much destroyed the incentive to give major tax breaks to EV’s for the next 10 or 20 years. If you really look at the current tax incentives, they really make no sense even given $100 oil when you figure in pollution externalities.

  • avatar
    brentrn

    Reliance on a fuel tax for funding roads will soon be obsolete. As the numbers of alternative fuel and electric vehicles increase it will be wiser to switch to a road usage tax. Annual review of mileage can be correlated to a tax/mile charge. This would also remove the revenue losses from hybrid/high mpg vehicles.


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