Tag: subsidies

By on August 13, 2021

Michele Ursi/Shutterstock.com

The current $7,500 Federal electric vehicle tax incentive could get a boost to $12,500 if the “Clean Energy for America” bill ever makes its way to reality – but it’s absolutely the wrong way to go, in my opinion. And, I know – “Who cares what Jo thinks about EV incentives,” right? Right –except that very, very few people in the industry have as much “green cred” as I do, so maybe you’ll want to give this one a read.

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By on August 13, 2021

Despite regulatory efforts often being praised as essential for elevating standards and promoting safety, they’re also an excellent way to funnel money and favors between political and corporate entities in plain sight. This dichotomy is particularly glaring in regard to environmental restrictions, which frequently favor businesses that are wealthy enough to afford to adhere to them and subsidies that effectively reroute tax funding to support various industries.

Considering this, it’s fairly rare to see bigger businesses griping about government assistance. But that’s exactly what Honda is doing with a proposal in Congress seeking to provide additional EV subsidies to consumers that buy vehicles manufactured by union-backed plants. The manufacturer has stated it believes the Clean Energy for America Act is discriminatory by favoring specific automakers and will ultimately restrict the choices available to consumers – which is true.  (Read More…)

By on May 27, 2021

On Wednesday, the Senate Finance Committee advanced the Clean Energy for America Act making a few tweaks from earlier proposals. Changes include raising the federal EV tax rebate ceiling to $12,500 and opening the door for automakers who already exhausted their production quotas.

It’s good news for General Motors, which recently begged the government for just such a handout. But any manufacturer participating in the sale of electric vehicles will find themselves similarly blessed by the updated rules — assuming they make it through the halls of Capitol Hill with the necessary support.

Let’s take a peek behind the curtain to see what the updated proposal entails.  (Read More…)

By on April 8, 2021

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.  (Read More…)

By on March 30, 2021

With President Biden planning to announce an infrastructure proposal that could easily exceed $2 trillion, the automotive industry has come to the realization that some of that money could be used to make its job easier. Following Tesla’s attempt at charming the federal government into making carbon credits more valuable, automotive lobbies, supplier groups, and the United Auto Workers (UAW) union have issued a joint letter asking for financial assistance.

Addressed to the president and congress, the document makes numerous requests for help with electric vehicle adoption rates. Industry groups would like to see Biden sign onto significant government tax incentives and subsidies for both buying and manufacturing electric vehicles. But this isn’t limited to passenger cars, they also want tax dollars used to help offset the prices corporations pay on commercial EVs intended for fleet use. Government grants would likewise be set aside for organizations that retool facilities for electric cars, while federal entities make a vow to buy up new fleets that aren’t reliant on liquid fuel.  (Read More…)

By on February 11, 2021

The European Automobile Manufacturers’ Association (ACEA) is demanding the EU install more electric vehicle charging stations in a letter co-signed with Transport & Environment (T&E) and the European Consumer Organization (BEUC). This marks the hundredth time (rough estimate) an auto lobbying entity has tried to pressure the government into spending a fortune to drastically alter the European infrastructure to support the planned glut of EVs.

But it might be a fair request. Regulatory actions have effectively forced the industry into a corner and it now seems giddy at the prospect of an electrified world. The only real downside is that the charging infrastructure and power grids aren’t ready. ACEA estimates that the EU will need to build one million public charging points by 2024, with hopes of seeing three million installed before 2030.

Let’s see how feasible that is before it’s tried in our neck of the woods.

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By on July 29, 2020

Carlos Tavares, CEO of Groupe PSA, believes the secret to mainstreaming electric vehicles may have something to do with the industry being able to sell them at a profit. The French automaker’s boss has expressed concerns about a segment that’s almost entirely propped up by taxpayers — sounds likes someone might have taken a business course before running a multinational automaker!

It’s not that EVs are bad; they’re just too novel to be a bargain. Tavares believes the high development costs associated with newer technologies have effectively made electric cars money-losers without financial assistance from the government. He thinks their ultimate success (or failure) hinges upon finding a way to make them profitable without being perpetually subsidized by the government while reducing the amount of raw materials required for battery manufacture. As a bonus, he hinted that automakers might have juicer R&D budgets if they prioritized spending  hopefully accelerating the process of making EVs a little easier on everyone’s bank account.

“Affordability will be the challenge for the next five years in terms of costs,” Tavares told the Financial Times this week. “Those breakthroughs need to come from real estate, distribution costs, sourcing all the components of cost structure will have to be combined to bring this affordability.” (Read More…)

By on July 17, 2020

Earlier this week, presumed Democratic nominee for president and former shut-in Joe Biden discussed some of the changes he’d make if elected. While most do not overlap with the automotive industry and would force your author to digress into rants about the perils of unchecked government spending, one item tied to his ambitious $2 trillion climate proposal is related directly to cars — and feels uncomfortably familiar.

Biden appears interested in bringing back the Car Allowance Rebate System (aka Cash for Clunkers) from the last recession, or at least a version 2.0 that accelerates electric vehicle adoption and development inside the United States.  (Read More…)

By on July 6, 2020

fca

Nations like Germany might treat internal combustion engines like a shirtless man lighting up a Marlboro in a neonatal intensive care unit, but some countries still feel that they have a place in the automotive landscape. Italy even plans to put public dollars behind their purchase.

When economies and industries are suffering, governments can sometimes do the unthinkable.

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By on June 18, 2020

On Wednesday, ride-hailing company Lyft announced every vehicle using its platform will be electric by 2030. Since its fleet is comprised primarily of contractors using private vehicles, one might assume the company is planning to offer some financial assistance upon their next purchase. But being sensible rarely means being correct in the postmodern era.

Rather than encouraging its own drivers to make the switch, Lyft plans to work with NGOs, lawmakers, and pressure its industry rivals to make electrification mainstream. Obviously, this will include financial incentives for organizations willing to make the switch to EVs in exchange for a fat wad of cash. That’s what you’re now supposed to focus on. Ignore that Lyft’s announcement literally offers no personal commitment and passes every scrap of responsibility it pretends to be taking on to the government.

Lyft is trying to play the hero, and thinking about it too hard is going to muck everything up.  (Read More…)

By on May 21, 2020

The European Commission is reportedly preparing an economic stimulus package aimed at helping the EU bounce back from economic hardships caused by the coronavirus lockdown — saving some room for incentivized electric vehicle sales.

As you may have noticed in your home country, stimulus package proposals often involve lawmakers attempting to slip something in to aid their favorite causes. While not every nation in the EU feels similarly on all matters, environmentalism has been a reoccurring theme within the union — and has encouraged it to make aggressive decisions when it comes to promoting vehicles.

For decades, the European Union spent billions in subsidies and tax breaks to make diesel fuel cheaper than gasoline. Diesel engines produced less carbon dioxide and opened the door to biofuels, so the presumption was they were better for air pollution. That turned out not to be true, so the continent then pushed hard into subsidizing EVs, with diesel sales crumbling as a result.

Now seen as the only way to save the world from heavy, gas guzzling crossovers that people actually buy in great numbers, battery electric cars are getting their moment in the sun. And it may get a little brighter. The next EU stimulus package is set to include €20 billion ($22 billion USD) for those deciding to purchase an environmentally friendly passenger car.  (Read More…)

By on December 27, 2019

Next year, the European Union plans to adopt aggressive new rules that would see automakers fined if their total annual vehicle sales exceed predetermined carbon limits. Obviously automakers aren’t thrilled with the new fines and higher emission mandates, but France is facing additional criticism for its decision to take things a step further.

France’s parliament has adopted a new law penalizing cars that emit carbon dioxide above a certain threshold while still adhering to EU regulations. Vehicles failing to adhere to the French rules will be subject to a 20,000 euros ($22,240) tax in 2020, nearly twice the current fine. Meanwhile, the country is mulling the possibility of culling EV incentives — an odd move, considering its aim to transition its populace to zero-emission vehicles. (Read More…)

By on December 23, 2019

Prior to Congress taking the rest of the month off to relax and presumably gear up for an impeachment trial, they first had to settle their year-end tax package. Automakers were hoping that would include an extension of electric vehicle tax credits, but it was a doomed proposition.

An extension was initially included in the bipartisan Driving America Forward Act, which manifested this spring, before being incorporated into the Democrat-friendly GREEN Act (Growing Renewable Energy and Efficiency Now). That got it through the House but not the Republican-controlled Senate, which wasn’t interested.

While the current $7,500 EV tax credit remains in place, Tesla and General Motors have both reached their 200,000-vehicle quota. Naturally, they (and other automakers) lobbied for an expansion, one which would have seen a $7,000 credit kept in place until a manufacturer sold 600,000 electric automobiles. Several Republican lawmakers openly shared their distaste for the plan, though few more openly than Senator John Barrasso of Wyoming, who had an opposing bill — called the Fairness for Every Driver Act — interested in reducing subsidies on the grounds that EV credits have already done enough.  (Read More…)

By on December 11, 2019

The European Union has approved a 3.2 billion-euro fund to promote the research and development of battery technology, with cash pouring in from Belgium, Finland, France, Germany, Italy, Poland and Sweden. While Brussels has been on an electrification push ever since Europe fell out of love with diesel, now may not be the best time to double down on EVs.

We recently covered China’s ailing automotive market, noting the poor performance of new energy vehicles (which fell by at least 40 percent vs the previous November). We’ve also covered a survey showing how eager the nation’s consumer base appeared to be to purchase them, with both writer and readership wondering how reliable those figures actually were. Our collective dubiousness appears to have been valid. Despite being the top region for EV sales, new data from Bernstein Research claims about 70 percent of the 1.2 million electric or gasoline-electric hybrid models sold in China over the past year went directly to government or corporate fleets. When the government started removing subsidies, sales plummeted with little private interest to soften the impact.

Europe may be on a vaguely similar path. While worldwide EV sales are up about 13 percent through October, sales in North America are down 2 percent (at 301,000 deliveries), with Europe rising 37 percent (to 395,000). That’s partially due to European cities being closer together (with more charging points between them), though most EU member states also offer various electric vehicle purchasing incentives and tax exemptions. They’ve likewise adopted stricter environmental rules that make EVs more appetizing to own in the future.  (Read More…)

By on October 3, 2019

Tesla’s Model 3 became the best-selling car in the Netherlands last month, edging out the Volkswagen Polo. If you’re wondering how an electric automobile that goes for the domestic equivalent of $47,300 in Europe outsold VW’s $18,650 hatchback, take a look at the United States. Ford’s F-Series is always at the top of the charts here and, while it can be had for under $30,000, most have sticker prices nearly identical to the aforementioned Model 3.

Tesla also has the advantage of the Netherlands’ eagerness to adopt EVs, which has resulted in some heavy incentivizing. Honestly, if this author could bring himself to be surrounded by the Dutch on a daily basis, he’d be tempted by the parking perks alone.  (Read More…)

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