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House Republicans propose to scrap $7,500 electric vehicle credit
- ghouse 9y agoAnd if they scrap oil subsidies too, the market can figure it all out. But looks like most direct and indirect O&G subsidies will remain.
- awinder 9y ago~ rolls eyes ~ if you seriously believe the market magically deals with externalized costs
- deleted 9y ago[deleted]
- BinaryIdiot 9y agoThe market doesn't care about external costs, you're right. One thing to keep in mind though is that we may be nearing the time in which the market could handle this because renewables are getting very cheap. I'm not sure if we're at the point where if you dropped all oil subsidies that renewables would be cheaper (maybe not? I haven't done the math) but we should be getting close if we're not already there. At that point the market could, in theory, move to the one with the higher profit margins while still not caring about external costs.
- smnrchrds 9y agoIf we want to leave it all to the markets, we need to consider the externalities too, e.g. through a carbon tax.
- aoeuasdf1 9y agoWhich doesn't even take into account other serious externalities like smog.
- NeonVice 9y agoO&G companies are able to write off the cost of doing business just like other businesses. They are not "subsidies". https://www.forbes.com/sites/drillinginfo/2016/02/22/debunking-myths-about-federal-oil-gas-subsidies/#cbd6cf06e1cd https://www.forbes.com/sites/drillinginfo/2016/02/22/debunki...
- lostlogin 9y agoIt’s a ballsy move to compare the oil and gas industries to health. There is plenty to criticise about the way the US healthcare system is run, but do people really begrudge treating the two industries differently?
- SilasX 9y agoYes, I do begrudge the dickens out of people who insist that being able to deduct oil exploration costs is an unfair "subsidy" to oil and whose removal would instantly turbocharge renewables by itself. Letting companies deduct expenses like everyone else is not a subsidy. It's like it's become part of the common mythos, that US oil companies get massive cash subsidies that are the sole reason they're not beaten by renewables, but the moment you apply any scrutiny it falls apart. (Environmental concerns are legit, but the lack of better regulation is a non-standard usage of "subsidy" and people go further to claim that tax-deductions-everyone-gets are subsidies.)
- microcolonel 9y agoI'm generally in favour of allowing the market to do its work. That said, in the case of emissions, it is too expensive to attribute and process torts, so the true cost of emissions is rarely ever passed on to even very large polluters who have damaged a lot of property. This is why the original mandate of the EPA is so legitimate. I'm with you on the subsidies though.
- meritt 9y agoCurious if this would impact the yet-to-be-produced Tesla Model 3s or if it would only discourage future automakers from manufacturing EVs?
- maxerickson 9y agoSome of the Model 3s, it is per manufacturer and begins to phase out after 200,000 vehicles. https://www.cnbc.com/2017/07/28/tesla-is-running-out-of-federal-tax-credits-for-car-buyers-edmunds.html https://www.cnbc.com/2017/07/28/tesla-is-running-out-of-fede... So people at the front of the line would be eligible for the full amount. The ongoing drop in battery costs is likely a bigger factor than the rebate though.
- meritt 9y agoRight, I knew it started to phase out (over 6 quarters) after the 200,000th US delivery. My question was more if this proposed legislation could terminate the EV credit entirely, or it would prevent new automakers from taking advantage of it.
- mattbeckman 9y agoAs a Model 3 reservation holder, I was under the assumption that getting the EV credit was not a guarantee.
- rconti 9y agoIt's not, but it won't be phased out until later in 2018 based on anticipated production volumes, and if no government action happens.
- stusmall 9y agoI mean it's kind of the point of tax reform. You eliminate deductions that only wealthier people benefit from and lower the rate over all. You'll see a lot of deductions go away that are good on their own but in aggregate with all the other deductions give us such a massively complex system.
- matt_wulfeck 9y agoThe states and cities that are coming forward with ridiculous EV mandates should be the ones covering the subsidies, not the entire nation.
- fhood 9y agoI disagree. Phasing out new production of C02 producing vehicles benefits everyone and by extension, failing to encourage it hurts everyone. This isn't a localized issue. It isn't like Texas (for instance) can produce as much carbon dioxide as they want, and it will only affect Texas.
- matt_wulfeck 9y agoYet the state you criticize (Texas) is leading the country in green, renewable energy [1] 1. https://www.wsj.com/articles/which-state-is-a-big-renewable-energy-pioneer-texas-1472414098 https://www.wsj.com/articles/which-state-is-a-big-renewable-...
- fhood 9y agoI didn't research, I just picked one at random. Please replace Texas with whatever state you like. That isn't really the point. Edit: And also, I just checked and Texas does NOT do very well on CO2 emissions per capita. Edit: Also I did some more checking and Texas is not leading the country in renewable energy, it is 22nd
- Pfhreak 9y agoYeah! Pollution is a local problem! Definitely address it at the city level. Can we go further? Why not just have specific individuals who care about this funding the subsidies? /s
- dangoor 9y agoI bought a Prius Prime earlier this year anticipating that such a move was possible. This would be a real shame, though, because it does help level the playing field a bit given how much our country invests in oil.
- BoorishBears 9y agoI choose the Volt over the Prime and I'm curious if you don't mind, what pulled you towards the Prime?
- dangoor 9y agoThe Volt was the other serious contender for me (especially given that I live in a state that doesn't generally get the electric vehicles). Ultimately, it was trunk space that made me choose the Prime. We have one car and occasionally go camping and having more storage in the car was more important than the fifth seat or longer electric range.
- kozak 9y agoHow about CO2 taxes on fossil fuels then?
- maxerickson 9y agoOr even just fuel taxes that are sufficient to maintain vehicle infrastructure.
- drofmij 9y agoMy fuel is already taxed - I pay about $0.59 tax per gallon in Virginia.
- vkou 9y agoIn Germany, you'd be paying $6.14 tax per gallon.
- dsfyu404ed 9y agoOk, you get taxed more on fuel. Good for you. There's starving kids in Africa. They have it worse than kids in the US but they aren't more than tangentially relevant to a discussion on hunger in the US. Your European fuel taxes are of similar relevance to this discussion about fuel and transportation taxes/subsidies in the US. 6.14/gal a wonderful example of an amount of taxation I never want to see on a gallon of anything short of liquid cancer in the US. I'm convinced that we can reach a far more efficient way to implement carrots and sticks.
- vkou 9y ago> I'm convinced that we can reach a far more efficient way to implement carrots and sticks. What dollar value do you assign to the human and economic cost that any one pound of CO2 will produce over the next century? How did you come by this number? If you haven't, then you're just going with your gut feel. Gut feel is a terrible way to judge whether or not policy is good, or not. What if the economic cost of burning that gallon of gas is $10? Would applying that externality to the price at the pump still churn your stomach? If you don't want to assign a greater or equal cost to it, then the most efficient solution for the market will be to keep polluting, causing net harm. Robbing Peter to fill Paul's gas tank.
- Cshelton 9y agoIf we just eliminated subsidies in the oil & gas world, I can promise you the economy will move towards renewable extremely fast. Make it a phase out of two - four years..., it would boost sales of EV's and our entire transportation network much more quick than EV tax credits would, AND, it would be a fair market for once! It would spur innovation, create many jobs, we would lead the world once again in regards towards moving to a 100% renewable economy, etc... so many things. The fat, old pigs/politicians of the O&G industry need to be shown the door... It's 2017... we can do this now. Not to mention the extra long term taxpayer savings on currently increasing medical costs...
- rconti 9y agoOf course, electric cars are typically charged via some kind of fossil fuel so to a certain extent they also benefit from these subsidies -- just not as much.
- lostlogin 9y agoNot being reliant on it would have a massive effect on the Middle East. Whatever stability they have now would go. That aspect would need a lot of care, and the West’s track record is not good.
- Cshelton 9y agoSure, but that is something they need to figure out. The world cannot wait on the middle east to stabilize... they don't exactly have a great track record of doing so either..
- microcolonel 9y agoIt's not clear that oil revenues actually improve stability in the Mideast. A considerable proportion of the revenue is quite literally diverted into forces intended to cause states to fail or stagnate.
- kadenshep 9y ago>A considerable proportion of the revenue is quite literally diverted into forces intended to cause states to fail or stagnate. Yeah you're gonna need a credible source on that claim.
- rukittenme 9y agoI have a lot to say on this... > Critics say electric vehicle buyers tend to be wealthier than average Americans and do nod need subsidies. I love how this gets buried at the bottom after an avalanche of criticism. A free $7500 for the rich and an additional $7500 in revenue for manufacturers. Say what you want about the American political system, it is a master class in manipulation. "But the environment!" Assuming someone who buys a $100,000 car is unwilling to spending $107,500 for the same vehicle. Yes the environment would suffer, that is also assuming electric cars (in their current state) are less impactful than fossil fuel vehicles (which isn't the case). In fact, used internal combustion cars should be given a subsidy if you care about the environment. "But the poor can't afford these cars without it!" The poor can't afford it with it. How many bolts do you see driving around? I've lived in Asheville NC, Nashville TN, and Portland OR. I've seen 3 bolts total and hundreds of $100k Teslas driving around. If you're poor, you probably live in an apartment without an electric car charging station. You probably can't afford a new car so you buy used which is exclusively internal combustion. So how does this tax credit affect you at all? --- I'm intensely fascinated by conversations and how they are framed to manipulate opinion. Depending on your political slant, you could have easily framed this as "tax breaks for the wealthy" or "an attack on green energy" or "supporting domestic manufacturers" or "hurting domestic manufacturers". It's all bullshit and I can't stand it anymore...
- BadassFractal 9y agoI'm with you. That seems to be the the reality of politics, it's persuasion wars where it's really hard to get ahold of the facts, and even with the facts it's hard to tell what the better option is.
- JosephLark 9y agoOf course things get framed to manipulate opinion. Now, I actually don't mean this with any snark, but how is what you're doing any different? This tax credit applies to plenty of vehicles sold for much less than $100,000.
- rukittenme 9y ago
- deleted 9y ago[deleted]
- matt4077 9y agoBecause it makes it cheaper to buy that car, which makes it more likely for someone to buy it, which increases sales, which allows Tesla to invest in improving technology such as batteries and also to achieve economies of scale, which would allow prices to come down, which would lower the number of ice vehicles, which would lower the use of oil as an energy source, which would lower CO_2 emissions (and also pollution, international competition for resources, and the volatility of the mideast), which would lower the concentration of CO_2 in the atmosphere, which would allow more of the sun's irradiation heat to escape earth, which would slow the rise of global average temperature, which would lower the risk of widespread famine, death, war, impoverishment, migration, and mild unease that usually accompany major changes in the environment such as a countries' ability to grow food, or weather Austria needs a navy or not. But you kinda knew that already, right?
- fishcolorbrick 9y agoThese subsidies were almost on the way out for GM & Tesla anyway. The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) There is a chart here [1] which shows GM and Tesla hitting the 200k sold mark in about 3 months. Sucks to be Faraday Future, but first-to-market is real. [0]: https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d https://www.irs.gov/businesses/plug-in-electric-vehicle-cred... [1]: https://www.pluglesspower.com/learn/forecasting-the-sunset-of-federal-tax-credits-for-evs/ https://www.pluglesspower.com/learn/forecasting-the-sunset-o...
- PatientTrades 9y agoWhy do articles like this always paint reductions in a negative manner? This is actually a positive. The credit should be scraped immediately. The credit was an initial incentive to help encourage drivers to adopt electric vehicles, and it worked very well. Electric vehicles are everywhere especially in major cities; they are huge in my city San Diego. However, now that they are mainstream there is no reason to continue with tax breaks. Electric drivers will continue to drive them, and their share of the market will continue to expand with or without the tax breaks as more people convert. Lets us that tax money to pay for other important things like paying off our debt or funding sustainable energy solutions.
- danans 9y agoThe correct solution here is not to get rid of the credit, but to introduce a phase out as income rises, so middle class car buyers benefit, but wealthy car buyers don't. But that won't happen because the real goal of the proposal is to support the oil and gas industry, not to remove a subsidy to wealthy car buyers. As the article states, even the auto industry has come out against this.
- d1zzy 9y agoThat's what I don't understand in all such proposed policy changes, the discussion is phrased as A or B (with people arguing on either side) when in practice there are many other possibilities, some win-win others giving an acceptable compromise.
- danans 9y agoIn addition to the down-votes, can someone explain to me why they think a high income phase-out of the EV rebate is not preferable to eliminating it altogether, especially if the objection to the rebate is that it subsidizes car purchases by the wealthy?
- Kyragem 9y ago"Electric car buyers tend to be wealthier and don't need subsidies" If that is so why are republicans proposing to cut the estate taxes? hypocrites.
- logfromblammo 9y agoGood. Both tax and subsidy distort market price and lead to deadweight loss. And you can't realistically argue that some endeavors deserve taxpayer support while others have to rely on access to financial markets to get over the hump in their runway. The treasury department should not be picking winners and losers. Leave that to investors that have to put some of their own skin in the game. The minimum damage to the economy occurs when a tax exactly matches the value of negative externalities pushed out onto the public, to be spent exclusively on cleaning them up, and when a subsidy matches any positive externality that the company hasn't managed to capture yet. It isn't hard to think that any subsidy for electric vehicles should be scrapped, and within the bounds of the same public concern, replaced with a tax on emissions from combustion vehicles, to be used to make those engines already in service less polluting. The tax phases itself out, as people buy new vehicles that pollute less, and as they make already-paid-for repairs and retrofits on older vehicles. With the subsidy, you have to turn it off manually whenever the desired economic effect has been achieved. I have no idea what the motivation is behind subsidizing oil & gas. Encourage people to use engines instead of slave labor? Maybe use gas instead of coal? Whatever the reason is, it may have once favored the best side of a two-sided race, but with additional competitors joining the field, it no longer necessarily helps the best of them. That's why taxing the negative externalities almost always makes more sense, because the tax falls away without further intervention when that competitor exits. Like licensing horses to be inside a municipality, to cover the cost of cleanup when they poop on city streets. When people stop riding into town on horses, and start driving cars, the horse tax goes away without further effort. There is also the possibility that an industry may never get over the hump in its runway. Do you want to keep it on life support forever? And if not, how do you decide when to pull the plug?
- d1zzy 9y agoI can provide one data point: I drive a 20 year old Honda Civic but I'm looking at getting another car (with automated shifting for spouse). With the $7500 federal tax credit + $2500 CA credit I was considering a Chevy Bolt. Now I'm about 99% certain I won't, I'll probably buy a Honda Civic, now that they went back to making hatchbacks. I don't know about environmental impact (I bike to work 4 out of 5 weekdays) but that's one lost electrical vehicle purchase. I could have charged it at home for "free" (I have solar panels) but it's way too expensive without the credits.
- rusher81572 9y agoI love electric cars but I do not think it is fair for my money to be taken to subsidize a car for someone else. I had no say in the matter. The same goes with solar subsidies. If you want an electric car or solar, you should pay for it, not the taxpayer.