CRI News


Don’t Ask the Poor to Pay for Your Electric vehicle
by David T. Stevenson, Policy Director
12/21/2018
 
The Delaware Electric Vehicle Association responded to my article claiming EVs are a very expensive way to reduce carbon dioxide emissions.  Interestingly the response doesn’t really dispute that claim. 
 
I compared the cost difference of an electricity powered Chevy Bolt to a very similar gasoline fueled Chevy Cruze and found the emission savings cost over $1,500 a ton,  The Bolt cost almost twice as much for a very small emission savings.  For perspective, electricity generators paid under $5 a ton for emission allowances in September, and there are a lot of energy efficiency strategies that actually save money while reducing emissions. 
 
The EV supporters simply claimed future advancements may bring the cost down to more affordable levels, and use the mobile phone industry as an example of how that works.  My critics suggested I forgot about this point.  On the contrary, I very much took this into account. 
 
In fact, the EV industry has benefited greatly from the mobile phone revolution.  The same batteries are used in both technologies.  Battery cost has fallen greatly from both technological improvements, and economies of manufacturing scale.  Battery cost has fallen so far it is likely further improvements will come at an ever decreasing rate.  The U.S. Energy Information Agency projects EVs, like the Bolt, will still be over 40 percent more expensive than gasoline fueled vehicles in 2035, considering battery cost reductions. 
 
The EV Association members also claim I stated lower income families couldn’t take advantage of federal tax subsidies.  My point was that they are not doing so.  For the most part, it is higher income families that are actually buying EVs.  The government subsidies are massive.  In Delaware an EV buyer can get up to $11,000 in federal and state subsidies.  The cost of those subsidies is being paid by everyone else, including the poor and middle class, in higher taxes and higher electric bills.  It is a transfer of wealth in the wrong direction.
 
We may get a very good window on how EV sales trend without the $7,500 federal Investment Tax Credit in 2019.  All electric EVs from Tesla and General Motors accounted for 90 percent of sales in 2018.  There is a 200,000 vehicle cap per manufacturer to qualify for the tax credit.  Tesla exceeded the cap last July, and GM passed the cap in November.  EV supporters are trying to eliminate the cap, but have been unsuccessful so far.  Sales may plummet. 
 
Let me be clear, anyone interested in buying an EV is free to do so.  Early adopters typically drive markets for new technologies.  Costs may come down in the future, just like cell phones. However, the cell phone industry grew without government subsidies.  The EV industry should do the same, and the EV industry should get their hands out of our pockets!