Biden Planning to Pour $100 Billion Worth Of Rebates Onto EVs

Matt Posky
by Matt Posky

The Biden administration expanded on its $174 billion proposal to boost electric vehicle sales on Thursday, suggesting that the United States government make it rain money on those purchasing EVs.

Technically a part of the $2.3 trillion infrastructure plan, which has been expanded to include jobs and numerous environmental projects, the proposal makes a lot of special exemptions for alternative energy vehicles backed by large financial commitments. $100 billion will be set aside for new consumer rebates, potentially opening up the door for manufacturers that have already exhausted their quota of federal tax credits linked to zero-emission cars.

Politico shared a U.S. Transportation Department email sent to congressional staff outlining additional details of the plan. The memo included allocating $15 billion to add another 500,000 EV charging points to the national network, $20 billion for electric school buses, $25 billion for establishing emissions-friendly public transit solutions, and an additional $14 billion in miscellaneous EV incentives. While the White House has not committed itself to explaining exactly how the funding will be broken down, the DOT email said the brunt of the money will go toward encouraging Americans to swap to electric vehicles and more energy-efficient appliances.

This comes after several years of Democrat leadership, aggressively advocating for EVs and influencing the markets as much as would be needed to achieve the desired outcome. Senate Democratic Leader Chuck Schumer was pitching a modified version of Cash for Clunkers that would have offered $454 billion (over ten years) to people trading in an older, gasoline-powered car for a modern electric one. The president also floated a highly similar Car Allowance Rebate System while campaigning in 2020.

“These are the most critical investments we can make for the long-term health and vitality of the American economy and the safety of the American people,” Joe Biden said last July. “Here we are now with the economy in crisis, but with an incredible opportunity not just to build back to where we were before, but better, stronger, more resilient, and more prepared for the challenges that lie ahead … And there is no more consequential challenge that we must meet in this next decade than the onrushing climate crisis.”

Though Biden and Schumer are just a couple of examples drawn from an incredibly deep well of politicians. Reuters noted that Michigan Senator Debbie Stabenow and Representative Dan Kildee have been working on a bill to restore and expand the Obama-era EV tax credit system — which they elaborated upon in a recent interview.

From Reuters:

Kildee wants to skew the credit in favor of vehicles with more affordable vehicles with longer range, to “democratize the electric vehicle market.”

He said they are “looking at ways to make the credit more accessible to middle- and lower-income families, potentially even making the credit refundable.”

Kildee said EVs are “where the market is going — full stop. The only question that we have to answer is are these going to be vehicles made by American workers.” Kildee said they could also introduce a credit for used EV purchases.

Stabenow said it was important to give automakers incentives to produce electric vehicles in the United States.

“China has committed $100 billion to grab this market — both battery cell production but also in other component parts of electric vehicles,” Stabenow said. “We better take it seriously.”

While your author is generally skeptical of social engineering, there’s plenty of evidence to suggest that the original Cash for Clunkers program was not environmentally sound. Adopting a blind push into electrification, as China has, may also have unintended consequences. China’s heavy incentivization of EVs backfired as consumers started pulling out of the market, unsure of what the next round of regulations or incentives would look like. Subsequent cuts to subsidies then crippled the auto market and started negatively impacting some of China’s biggest auto brands.

We expect to see Republicans pushing back eventually, however they seem to be preoccupied with President Biden’s recent executive orders pertaining to gun control. As many are calling the actions unconstitutional, it’s likely to receive the brunt of the media focus. It could be days before they’ll able to organize comprehensive criticisms against the infrastructure/EV proposals. But we’re betting the response will be rather meek until the current administration better explains how the credit process is supposed to work and which entities will be eligible. As things currently stand, the only censures to be made are that it sounds like a heck of a lot of money to swell a plan we’ve tried already.

[Image: Welcomia/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Jeff S Jeff S on Apr 13, 2021

    What's wrong with Matlock? Still in reruns on Me TV. At least Matlock had a plot and a script which is more than most of today's network shows.

  • Joevwgti Joevwgti on Apr 14, 2021

    Doesn't seem we have to choose, here. You can do EV subsidies, and continue to handle the other problems commenters have listed. Though, I do find climate a rather important focus. Schooling doesn't matter much, if you can't breathe. I would think we're a ways off from that, but it does seem that dire.

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