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If you only provide incentives as tax credits for buying new EVs, you’re really only getting a small % of a wealthier segment of the population to buy them. And

by jrsj 5y ago

If you only provide incentives as tax credits for buying new EVs, you’re really only getting a small % of a wealthier segment of the population to buy them. And in many cases there are problems; look at GMs current predicament with the Bolt. They have to advise people not to charge overnight and to park outside because their batteries might catch on fire. The EV market sub $40k is still very weak. They’re also impractical for anyone who doesn’t park somewhere they can charge. Now look at hybrids and PHEVs. They can be as much as $15k cheaper out the door, but they still cost a bit more than a traditional ICE vehicle. If your goal is to reduce the emissions of new vehicles as quickly as possible, you should use a more “all of the above” strategy. Incentivize small hybrid vehicles & make them cheaper than similar non-hybrid vehicles, and suddenly the majority of cars priced under $30k being sold would be hybrids and you would cut emissions significantly. Ultimately if you want the market to solve this problem, you need to get the financial incentives aligned. Right now they just aren’t, it’s just pumping up EVs that are still niche & ignoring other more effective short term solutions. FWIW I’d love to see some kind of subsidy for used hybrids & EVs too, many people can’t afford to buy new cars at all but they might consider at least switching to a hybrid if it’s economical.

elihu 5y ago
A subsidy on used sales is tricky, since then you'd just be subsidizing changes of ownership. Unless the seller pays back the subsidy when they sell, you'd have a situation where the optimal strategy is just to trade a car back and forth between two owners a hundred times. I suppose you could make the subsidy only be claimable once per tax-payer, but still the incentive would be to buy an EV and then sell it right away just to get the credit. There are probably workarounds to that too, but it's hard to craft the rules in a way that doesn't create perverse incentives. I think one good way to increase the number of EVs on the road would be to subsidize EV conversions. Converting a gas car to electric is generally expensive, labor intensive, and requires a lot of custom fabrication. If we had an EV conversion subsidy, it might encourage companies to start making low-cost well-engineered kits that are relatively straightforward for a mechanic to install.

by jrsj 5y ago

elihu 5y ago

A subsidy on used sales is tricky, since then you'd just be subsidizing changes of ownership. Unless the seller pays back the subsidy when they sell, you'd have a situation where the optimal strategy is just to trade a car back and forth between two owners a hundred times. I suppose you could make the subsidy only be claimable once per tax-payer, but still the incentive would be to buy an EV and then sell it right away just to get the credit. There are probably workarounds to that too, but it's hard to craft the rules in a way that doesn't create perverse incentives. I think one good way to increase the number of EVs on the road would be to subsidize EV conversions. Converting a gas car to electric is generally expensive, labor intensive, and requires a lot of custom fabrication. If we had an EV conversion subsidy, it might encourage companies to start making low-cost well-engineered kits that are relatively straightforward for a mechanic to install.