By on December 8, 2017

nissan leaf charging electric car

On Wednesday, 22 mayors issued a letter to members of the House and Senate conference committee that’s attempting to finalize a rushed tax plan before the end of the year, saying the $7,500 electric vehicle tax credit allows them to better pursue clean-energy initiatives within their cities. The current versions of the bill has the House eliminating the credit, while the Senate has voted to keep it. So far, no automaker has reached the credit’s 200,000-vehicle threshold, and the industry — now backed with mayoral might — has pressed the U.S. government to maintain the incentive.

Alright, so it isn’t the power play that will turn the tide. But it does show that there exists a large group outside of manufacturers and EV fans that wants to keep the credits in place. 

The primary issue is that electric vehicles, on average, are still more expensive than traditional internal combustion automobiles. Supporters of the credit believe that, by offering the incentive to shoppers, the initial cost is sufficiently offset to a point that makes purchasing an EV possible for a majority of Americans.

In the letter, the gaggle of mayors claim electric vehicles have created over 200,000 automotive jobs in the U.S. while also providing a thrifty and cleaner alternative to gas-burning cars.

“The lifetime cost of ownership of an electric vehicle is significantly lower than that of a traditional internal combustion engine vehicle,” reads the letter. “According to www.fueleconomy.gov, an online resource provided by the U.S. Department of Energy’s Office of Transportation & Air Quality, an owner of a Nissan Leaf electric vehicle saves approximately $4,000 in fuel costs over five years while spending approximately $600 per year for vehicle charging costs. Owning an electric vehicle provides working American families with financial savings that they can put towards other needs.”

While the majority of the 22 mayors represent large and midsize cities occupying the American coastline, a handful hail from more central locations like Louisville, KY, Aspen, CO, and Columbus, OH. However, even if every mayor resided in the EV crazy state of California, they would still find their opinions shared by groups beyond its borders.

Automotive News reported that a similar memo was sent to Senator Orrin Hatch (R-Utah) and House Representative Kevin Brady (R-Texas) from the Electric Drive Transportation Association. The group represents automakers, suppliers, energy companies, and technology firms interested in advancing electrification.

It states that “congress designed the credit this way to promote multiple manufacturers’ investment and to allow the plug-in electric drive vehicle manufacturers to achieve commercial-scale production and the attendant reductions in per unit costs, while maximizing consumer options.”

[Image: Nissan]

Get the latest TTAC e-Newsletter!

Recommended

63 Comments on “Mayors Join Auto Industry in Fight to Maintain EV Tax Credit...”


  • avatar
    sgtjmack

    Well, if the average Leaf owner saves $4k, then there’s the savings. Why does the entire nation need to pay for them to drive a new car? I have said it countless times, the manufacturers need ti make the cars less expensive, not more expensive because the government is paying part of the bill. This is just like colleges raising tuition costs because the government has raised the amount of money given to students for college.

    If this swims, it is time to take the floaters off.

    • 0 avatar
      RangerM

      Didn’t I recently read on TTAC that California would “ban gasoline engines”?

      Seems to me the problem is already solved (at least in California). Are the mayors there aware of this?

      I see no need to subsidize California government’s policy from North Carolina.

    • 0 avatar
      Splorg McGillicuddy

      So you’re saying we should eliminate all oil industry subsidies, right?

      • 0 avatar
        Sobro

        Please enumerate the subsidies the oil industry receives that other mining and manufaturing industries do not.

        • 0 avatar
          dartman

          Oil Depletion Allowance. (Thank you very much)

          • 0 avatar
            civicjohn

            good try Dartman, with the drive-by comment. Let’s list a few other minerals (as well as timber) that fall under this law:

            (A) sulphur and uranium; and (B) if from deposits in the United States—anorthosite, clay, laterite, and nephelite syenite (to the extent that alumina and aluminum compounds are extracted from it), asbestos, bauxite, celestite, chromite, corundum, fluorspar, graphite, ilmenite, kyanite, mica, olivine, quartz crystals (radio grade), rutile, block steatite talc, and zircon, and ores of the following metals: antimony, beryllium, bismuth, cadmium, cobalt, columbium, lead, lithium, manganese, mercury, molybdenum, nickel, platinum and platinum group metals, tantalum, thorium, tin, titanium, tungsten, vanadium, and zinc.
            Also, gold, silver, copper, and iron ore, brucite, coal, lignite, perlite, sodium chloride, and wollastonite.

            There’s more, but good job zeroing in on OIL – pathetic.

      • 0 avatar
        civicjohn

        Please explain what these subsidies are.

        • 0 avatar
          dartman

          Impressive–you know how to use Wikipedia. Yes, the oil depletion allowance is applied to other minerals and timber, this does not obviate the fact that it is a subsidy to those industries, including oil and gas.

          My thank you was not a drive-by but a sincere thank you as I am one of those fortunate recipients of the depletion allowance.

          I also received a 30% tax credit to install a solar system on my home that allows me not pay for electricity–now in my third year, the system cost has been recouped by almost 70%. Another great subsidy that benefited an industry and me an individual, directly; What a Country! Thanks again.

    • 0 avatar
      civicjohn

      Amen. I live in one of the states (TN) that doesn’t have a state income tax and has to balance the budget every year. The SALT debate within the current mashup tax bill Congress is trying to pass, while misguided in many ways, hopefully will at least carve that down significantly.

      I know, these states with income taxes “create jobs and innovation” that a poor state like Alabama (or even TN) can’t even come close to match. Well, balance your darn budget, get your generous pension plans fully funded, stop being so darn generous when you know you’ll never be able to sustain it, get your house in order.

      The fact that Tesla Model S owners got a $7500 credit is repulsive to me. Now, Tesla is way behind on pushing out the Model 3 and while they have 500,000 deposits, one might think that number will dwindle if the tax credit goes away. Even the fanboys know you can’t get a Model 3 for $35k, not gonna happen, they’ll ship what they can produce and it will include options, many of them software turn on or turn off options. No information on whether they have worked out the kinks on the production line, the bonds are rated junk status, they’ve introduced the semi and the roadster, but they can’t get the Gigafactory to kick out battery packs with regularity. So, Elon camps out on the roof and cooks hot dogs. Give me a break. Now he’s going to send a Roadster to Mars…actually I think what he’s done with SpaceX is phenomenal – landing a booster on a barge is some serious stuff – but I hear they may be merging SpaceX with Tesla. Tesla has also had much success (don’t know about the profitability) in building power stations to keep wind/ solar power generated and keep the grid up. If I were in charge, there would be 3 companies, cars, power, and SpaceX. TSLA’s never shown a profit, and the game of selling EV tax credits is about over.

      Let it be known that I’m a short player with TSLA, just because it is so damn easy. However, I do think EV cars are the future and I want them to succeed, but what stunt will Elon do next, a zip line through Fremont flying past the production line? My advice, ship some freaking cars and knock the crap out of us short players.

      • 0 avatar
        dartman

        Welfare Queen- Tennessee; #3 after MS and LA relying on federal government “subsidies” to fund their government. 39.9% for TN. Tell me why the good citizens of CA should subsidize your racist broke-dick excuse of a state that refuses to pay its own way?

        https://files.taxfoundation.org/20170123145044/FedAidtoStates-011.png

  • avatar
    sgtjmack

    Well, if the average Leaf owner saves $4k, then there’s the savings. Why does the entire nation need to pay for them to drive a new car? I have said it countless times, the manufacturers need ti make the cars less expensive, not more expensive because the government is paying part of the bill. This is just like colleges raising tuition costs because the government has raised the amount of money given to students for college.

    If this swims, it is time to take the floaters off.

    • 0 avatar
      jpolicke

      Excellent point. Why do you need a $7500 inducement to save $4000?

      • 0 avatar
        Big Al from Oz

        jpolicke,
        Australia had a goverment subsidised scheme for LPG (propane) conversions.

        $1500 was offered for a $1800 conversion. All this had done was inrease shoddy work and raise the price of conversions by well over $1000. Another negative is LPG prices rose disproportionately.

        Help an industry survive, but it now appears US EVs are reliant on this handout. Another US vehicle is heavily dependent as well.

      • 0 avatar
        here4aSammich

        $4000? Nay may good sir. The letter is written to make you think that much is saved. But read it closely. The owner saves $4000 over 5 years in fuel cost while paying $600 per year to charge. $600 a year for 5 years = $3000. That’s a $1000 net savings. Your mileage may vary.

  • avatar
    jpolicke

    Rather than reciting the benefits of EVs to Congress, the mayors might try selling them to their own citizens. Also, rather than demanding that Washington pick up the cost, there’s nothing stopping these mayors from offering local incentives on EVs such as waiving sales tax, local income tax credits, or offering preferred parking. This would directly benefit their own constituency.

    • 0 avatar
      hreardon

      And frankly, jpolicke, that is the way that government is supposed to work in the United States: we have 50 little ‘experiments’ when it comes to things like tax policy, social norms, religion, business friendliness, education, etc. If you don’t like how things are going in one state you are free to move to another that more closely aligns with your beliefs, desires, norms, etc.

  • avatar
    Rick Astley

    Are any of the mayors clamoring for this in states which have publicly stated that the drop in gas tax revenue is hurting their infrastructure and that they need to generate other forms of tax revenue to shore up the revenue shortfall?

    Here in Seattle they’re talking about keeping the gas tax (We’re already the 2nd highest state gas tax in the nation, no sense in battling against that addiction!), and adding a pay-per-mile scheme under the premise that it’s the EV’s who aren’t “paying their fair share” to keep the roads up to snuff.

    • 0 avatar
      civicjohn

      I believe Seattle decided that they needed to have a new tax on Singles earning $250k and couples earning $500k?

      It was my understanding that was against the state constitution – didn’t they lose that battle?

      • 0 avatar
        Scoutdude

        Yes we had some Seattle residents that were asking to be taxed and the City was more than happy to accommodate, however they do not have authority to enact such a tax so it was over turned.

        • 0 avatar
          hreardon

          If those individuals feel that they should be paying more, there is absolutely nothing stopping them from making additional payments to their local or state tax collection authority.

          Oh wait, they want *other people* to pay….got it.

      • 0 avatar
        redmondjp

        That battle is far from over – it will be appealed all the way to the state supreme court – 100% chance of that.

        Seattle politicians think that every dollar earned belongs to them (because you didn’t build that).

  • avatar
    SCE to AUX

    I detest the code word “working families”.

  • avatar
    CombiCoupe99

    I do not support my neighbors EV purchase – that’s HIS responsibility.

    End the tax credit.

    • 0 avatar
      Landau Calrissian

      I do not support my neighbors sending their children to a public school – that’s THEIR responsibility.

      • 0 avatar
        CKNSLS Sierra SLT

        Landau-

        sending children to school is for the “greater good”. If they don’t get an education they would be breaking in to your house to support themselves.

        Comparing school taxes to an “EV tax credit” is more than a “bit of a stretch”.

      • 0 avatar
        civicjohn

        OK – but you’re going to have to get rid of the teachers union first.

        Good luck with that.

      • 0 avatar
        hreardon

        I like to think that most readers and commentators on TTAC are above average intelligence, and these kind of back-and-forth jabs are just the lowest form of argument.

        I think everyone understands the core of the argument: there are things that are for the public good (eg: education, potable water, decently maintained roads) and there are those items that benefit a relative few.

        In the case of EV credits, they have traditionally gone to benefit early adopters (eg: those who skew into significantly higher income brackets); In the case of Tesla, we’re subsidizing $70,000 “luxury cars” while sales at the lower end have seen tepid growth because the mass market isn’t yet ready to adopt them due to features and price.

        I think we can all understand the argument that less pollution is better than more and that there is and will continue to be a growing place for EVs in the market place. If we start arguing in terms of “I’m not paying to support X public good” or “why should I subsidize the Kalifornia Lefties?”, then our Republic is in real danger. The discourse should not be directed at the individuals so much as: what do we value as a people and should we support?

        In the specific case of EVs, while I support the cause and support the government helping a nascent industry with great potential, I do not support unlimited subsidies and I believe that the free market will indeed solve this problem once the features and economics make sense. Subsidies (in general) skew markets and prices and create imbalances and should be used *very* carefully due to the aforementioned as well as natural human tendency to become lazy and complacent.

    • 0 avatar
      SCE to AUX

      Your position is easy to say, and makes for a nice sound bite.

      Everybody supports subsidies that help themselves, and oppose those which do not.

      But I hope you don’t use gasoline, electricity, natural gas, milk, public education, public television or radio, use roads, drive a vehicle made in the US, own a home, have children, or give to charity. All are subsidized in some fashion.

      Remember the prospective Toyota-Mazda factory? It’s seeking a $1 billion tax incentive package, and the state governments you elected are willing to give it.
      https://www.thetruthaboutcars.com/2017/11/toyota-mazda-factory/

      I’d like to eliminate subsidies also, but it’s impossible.

  • avatar
    dont.fit.in.cars

    Keep it…only if in return we have a national ram an EV off the road day.

  • avatar

    The money spent encouraging people to buy BEVs could reduce CO2 emissions far more cost effectively by insulating homes and/or switching home heating from oil to heat pumps, or even to natural gas.

    But the EV subsidies ***may*** have a public health payoff in certain smog-ridden cities such as DC or LA.

    • 0 avatar
      Dan

      70% of NOx and 80% of VOC emissions aren’t coming from cars at all, and the great majority of that car pollution comes from 20 year old beaters. Recent cars with functional cats are for all intents and purposes smog-free.

      Replacing harmless CO2 with lethal PM2.5 pollution is just one more thing that we can thank the greens for.

    • 0 avatar
      Big Al from Oz

      David,
      My belief has always been to remove all oil heating and replace it with natural gas. The infrastructure would be subsidised.

      The US NE is a good place to start. Thousands of US jobs would be created, all of them paying for US natural gas.

      This would be a one off subsidy providing lasting and an economically beneficial system in place ……. and a massive reduction in emissions.

    • 0 avatar
      civicjohn

      You might want to review the percentage of EVs on the road in those cities, I don’t believe they are making much of a dent.

  • avatar
    silentsod

    I bet these 22/35,000 city mayors are really pumped they got as much support as they did.

  • avatar
    azmtns

    I notice that Phoenix mayor, Greg Stanton, has signed the letter. He is also running for Congress. Hmmm.

  • avatar
    jacob_coulter

    How about paying for the tax credit themselves?

    I love the mayor of Aspen, Colorado asking for subsidies on the city’s resident vehicle purchases. Let’s also see what the mayor of Beverly Hills needs.

  • avatar
    deanst

    Just take a survey of what the mayors actually drive. If the majority don’t drive EVs, tell them their hypocrisy is noted, and show them the door.

  • avatar
    stingray65

    99% of the EV tax credits go to the top 5% income earners, so basically it is about helping rich people virtue signal by subsidizing their new EV.

    As this lobbying illustrates, once a subsidy is in place it is almost impossible to get rid of. Don’t be surprised if these mayors, tree-huggers, and Elon start lobbying to get them extended to the first 500,000 units, etc.

    EVs purchases are almost entirely additions to the fleet size since they are usually purchased as 2nd or 3rd commuting cars, which when combined with fossil generated electricity means they have minimal at best positive impact on greenhouse gas emissions and other pollutants.

    Yes other industries also get subsidies, which in an ideal world would also be eliminated, but most of these other industries are also net taxpayers because they actually earn profits. EVs are money losers, Tesla pays no taxes. EV owners do not contribute to paying for roads and bridges because they don’t pay fuel taxes.

  • avatar
    tonyd

    How about making technology agnostic. Change the definition of gas guzzler to 30 mpg combined. 100 X (30 – combined mpg) per year road use tax.

    civic 30-35 zero
    fusion 1.5t 30-27 300
    fusion hybrd 30-42 zero
    escape 1.5t 30-26 400
    f150 2wd 2.7 30-21 900

    So ford adds 48v – electric ac – stop-start to fusion and escape and gg tax goes to zero.
    cut fuel demand to what we produce here and tell all ME to go F themselves.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • FormerFF: “Neither of the two were willing to move on price” I’ve bought a couple of used cars in...
  • WildcatMatt: I saw one of these yesterday and thought it looks quite like a 3/5 scale Chrysler Pacifica (the old one,...
  • Secret Hi5: Base SE trim Konas are available on rental lots. I drove one about 200 miles last month. Can’t...
  • ToolGuy: Unless someone has been carefully and systematically painting on a salt solution in little circular patterns...
  • Art Vandelay: also like 25 percent of the EV fee is for charging infrastructure which also is funded via, you guessed...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States