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Right, so a Prius plug-in hybrid gets a $2500 tax credit, whereas a Tesla gets $7500. If the idea is to build an economy of scale for electrification of vehicle

Right, so a Prius plug-in hybrid gets a $2500 tax credit, whereas a Tesla gets $7500. If the idea is to build an economy of scale for electrification of vehicles, I don't believe this makes sense. Pushing hard to make everything hybrid would do a lot more good.

zaroth 8y ago
There are PHEVs with batteries big enough to claim the full $7,500. By definition they will be luxury cars because batteries that big are really expensive. But batteries that big are also an order of magnitude less expensive than about 10 years ago. The benefits of battery scaling accrues to everyone, even the small PHEVs and plain old hybrids. The credit is based on how much battery you are buying. The Feds pitch in about 10-15% of the capital and the consumer pays the rest. This is a great force multiplier for a gov’t subsidy program which gets $10b in EV revenue stimulus for every $1b invested. A bigger subsidy for cheaper cars would be an interesting welfare program (why buy cars for poor people though, versus just giving free public transit passes?) but it wouldn’t achieve the force multiplier of encouraging consumer spending the way the current subsidy does by only paying 10-15% of the cost, and paying more the bigger the battery, not just more based on the price of the vehicle. There’s also a lot of infrastructure that you don’t really incentivize (like large scale charging infrastructure) if everything is just plain hybrid, because there’s not enough consumer demand for plugs everywhere. Getting EV above 1% starts tipping the scales to encourage places to install chargers. More chargers allows that next 1% to adopt that much easier. The richer early adopters can afford the inconvenience of a $5k electrical upgrade to their garage, or going out of their way to charge, etc. They are paving the way toward mass adoption. Just a few years ago EVs were decried as entirely impractical and novelties. Now I have one as my daily driver and I would never imagine going back. Hybrids are nice but EV is a paradigm shift. I’m glad the subsidy targets battery capacity and the future it envisions.
- reitzensteinm 8y ago
  Hybrids are in a position where they make economic sense at scale today (in terms of TCO) and are massively better for the environment. It really is a no brainer to convert as much as possible, and this could be achieved with a cost neutral feebate (i.e. tax non-hybrids and subsidize hybrids in equal measure), but subsidy on top of that would be even better. PHEVs can be used as a distributed source of energy, much the way the Leaf is being positioned now, except that the entire battery can be used (if the car knows it has petrol in reserve), meaning that each individually may be of as much use in this regard as a full EV. This will greatly speed up the transition to renewables. The scale of battery production argument makes more sense the other way; start with something that's economic today, then use that scale to enable full mainstream EVs in the future. "why buy cars for poor people though, versus just giving free public transit passes?" People buying brand new hybrids are not poor. You are living in a bubble, and defending public policy that directly benefits you. Why don't you take the bus?

zaroth 8y ago

There are PHEVs with batteries big enough to claim the full $7,500. By definition they will be luxury cars because batteries that big are really expensive. But batteries that big are also an order of magnitude less expensive than about 10 years ago. The benefits of battery scaling accrues to everyone, even the small PHEVs and plain old hybrids. The credit is based on how much battery you are buying. The Feds pitch in about 10-15% of the capital and the consumer pays the rest. This is a great force multiplier for a gov’t subsidy program which gets $10b in EV revenue stimulus for every $1b invested. A bigger subsidy for cheaper cars would be an interesting welfare program (why buy cars for poor people though, versus just giving free public transit passes?) but it wouldn’t achieve the force multiplier of encouraging consumer spending the way the current subsidy does by only paying 10-15% of the cost, and paying more the bigger the battery, not just more based on the price of the vehicle. There’s also a lot of infrastructure that you don’t really incentivize (like large scale charging infrastructure) if everything is just plain hybrid, because there’s not enough consumer demand for plugs everywhere. Getting EV above 1% starts tipping the scales to encourage places to install chargers. More chargers allows that next 1% to adopt that much easier. The richer early adopters can afford the inconvenience of a $5k electrical upgrade to their garage, or going out of their way to charge, etc. They are paving the way toward mass adoption. Just a few years ago EVs were decried as entirely impractical and novelties. Now I have one as my daily driver and I would never imagine going back. Hybrids are nice but EV is a paradigm shift. I’m glad the subsidy targets battery capacity and the future it envisions.

reitzensteinm 8y ago
Hybrids are in a position where they make economic sense at scale today (in terms of TCO) and are massively better for the environment. It really is a no brainer to convert as much as possible, and this could be achieved with a cost neutral feebate (i.e. tax non-hybrids and subsidize hybrids in equal measure), but subsidy on top of that would be even better. PHEVs can be used as a distributed source of energy, much the way the Leaf is being positioned now, except that the entire battery can be used (if the car knows it has petrol in reserve), meaning that each individually may be of as much use in this regard as a full EV. This will greatly speed up the transition to renewables. The scale of battery production argument makes more sense the other way; start with something that's economic today, then use that scale to enable full mainstream EVs in the future. "why buy cars for poor people though, versus just giving free public transit passes?" People buying brand new hybrids are not poor. You are living in a bubble, and defending public policy that directly benefits you. Why don't you take the bus?