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

Matt Posky
by Matt Posky
biden planning to pour 100 billion worth of rebates onto evs

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]

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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.

  • MaintenanceCosts We hear endlessly from the usual suspects about the scenarios where EVs don't work as well as gas cars. We never hear the opposite side of the coin. From an EV owner (since 2019) who has a second EV reserved, here are a few points the "I road trip 1000 miles every day" crowd won't tell you about:[list][*]When you have a convenient charging situation, EV fueling is more convenient than a gas car. There is no stopping at gas stations and you start every day with a full tank.[/*][*]Where there are no-idling rules (school pickup/dropoff, lines for ferries or services, city loading, whatever else) you can keep warm or cool to your heart's content in your EV.[/*][*]In the cold, EVs will give you heat from the second you turn them on.[/*][*]EVs don't care one bit if you use them for tons of very short trips. Their mechanicals don't need to boil off condensation. (Just tonight, I used my EV to drive six blocks, because it was 31 degrees and raining, and walking would have been unpleasant.)[/*][*]EVs don't stink and don't make you breathe carcinogens on cold start.[/*][*]EV maintenance is much less frequent and much cheaper, eliminating almost all items having to do with engine, transmission, or brakes in a gas car. In most EVs the maintenance schedule consists of battery coolant changes and tire maintenance.[/*][*]You can accelerate fast in EVs without noisily attracting the attention of the cops and every passerby on the street.[/*][/list]
  • MaintenanceCosts Still can't get a RAV4 Prime for love or money. Availability of normal hybrid RAV4s and Highlanders is only slightly better. At least around here I think Toyota could sell twice the number of vehicles that they are actually bringing in at the moment.
  • Tree Trunk Been in the market for a new Highlander Hybrid, it is sold out with order time of 6 months plus. Probably would have bit the bullet if it was not for the dealers the refuse to take an order but instead want to sell from allotment whether it fits or not and at thousands over MRSP.
  • AKHusky The expense argument is nonsense. My mach e was $42k after tax credit. Basically the same as similarly equipped edge. And it completely ignores that the best selling vehicles are Rams, F150s, and Silverados, all more expensive that a bolt, MAch e or ID4. As an owner, I'd say they are still in second car territory for most places in the country.
  • Johnster I live in a red state and I see quite a few EVs being purchased by conservative, upper-class Republicans (many of them Trump-supporters). I suspect that it is a way for them to flaunt their wealth and that, over time, the preference for EVs will trickle down to less well-off Republicans.