A4
THE DAILY ASTORIAN • FRIDAY, FEbRuARY 8, 2019
OPINION
editor@dailyastorian.com
KARI BORGEN
Publisher
JIM VAN NOSTRAND
Editor
Founded in 1873
JEREMY FELDMAN
Circulation Manager
JOHN D. BRUIJN
Production Manager
CARL EARL
Systems Manager
PRO-CON
Is scrapping a $7,500 tax credit for
electric car buyers a good idea?
AP Photo/Don Ryan
A line of electric cars and newly installed charging stations in front of the Portland General Electric headquarters building in 2015.
PRO: Uncle Sam plays taxpayers for
suckers by subsidizing the ultra-rich
CON: Trump’s decision to dump electric
car subsidy would damage global ecosystem
W
T
ASHINGTON — Relatively
vative technology get off the ground,
few Americans have electric
then let it fly on its own. That’s why the
cars. But every American tax-
credit covers each manufacturer’s first
payer has helped pay to buy them and
200,000 sales, then begins to phase out.
keep them on the road.
Tesla and GM are now in the phase-
That’s because Uncle Sam subsidizes
out period, which is why the two auto-
those buying electric vehicles with a
makers are pushing lawmakers to lift the
$7,500 tax credit. Add in-state and local
cap.
government incentives and the “free
Are electric vehicles still in their
money” can easily top 10 grand. And it
infancy? Even when the credit was cre-
keeps flowing in the form of perks like
ated, the concept was anything but new.
subsidized charging stations and access
Electric vehicles debuted in the
to HOV lanes.
U.S.
in 1896. By the early 1900s, they
Who benefits most from these govern-
accounted
for nearly a third of all vehi-
ment giveaways? Primarily people who
cles
on
the
road.
don’t need help buying a car.
The
Ford
Model T changed all of that,
The Congressional Research Service
but electric vehicles enjoyed blips of
reports that filers with an adjusted gross
popularity in the 1970s and ‘90s, too.
income of $100,000 or more claimed 78
Today, the industry is quite
percent of the tax credits in 2016.
Clearly, it’s a subsidy for the
mature, with more than 40 differ-
well-to-do.
ent vehicles available — about
The subsidy has helped prop
a quarter of them with a battery
up electric vehicle sales, but has
range exceeding 200 miles.
done little to reduce carbon emis-
Any rationale for the subsidy
sions or wean America off foreign
is
long
gone. But subsidies are
Nicolas
oil — the two big selling points
notoriously
hard to eliminate in a
Loris
when Congress approved the
town where politicians, lobbyists
giveaway.
and special interests groups thrive
Jonathan Lesser, an economist at Con-
on
trading
favors.
tinental Resources, found negligible cli-
That’s
unfortunate,
because govern-
mate impact from increased adoption of
ment
subsidies
are
no
recipe
for long-
electric vehicles — now or in the future.
term
success
in
any
industry.
Reliance on
Based on the Energy Information
preferential treatment from Washington
Administration’s sales projections for
electric vehicle sales and use, Lesser cal- actually stifles competition and innova-
tion — the things that improve products
culates that “the net reduction in car-
bon dioxide emissions between 2018 and and drive down sticker prices.
It’s time to pull the plug on electric
2050 would be only about one-half of 1
percent of total forecast U.S. energy-re-
vehicle subsidies, as well as subsidies for
lated carbon emissions.”
oil, biofuels and all other energy sources.
Such a small reduction in emissions
Americans drive more than 3 tril-
would have a practically undetectable
lion miles each year and spend hundreds
effect on global temperatures.
of billions of dollars on gasoline. That
Dependence on foreign oil is no lon-
translates into a huge market demand for
ger a problem, but that’s because of the
cost-efficient vehicles and fuel — and
domestic energy boom created by smart
plenty of incentive enough to spur com-
extraction technologies.
petition and innovation in the industry.
When President George W. Bush
And taxpayers should be able to pur-
OK’d tax credits for plug-in electrics in
chase
the car that best suits their means
2008, America was producing 5 million
and
their
needs — without nudging from
barrels of crude oil per day. Today, we’re
Washington
and without having to sub-
producing more than twice that amount.
sidize
purchases
by those better off than
In December, for the first time in more
themselves.
than 35 years, the U.S. exported more oil
Nicolas Loris is an economist special-
and refined petroleum products than it
izing in energy and environmental pol-
imported.
icy at Heritage Foundation, a think tank
The tax credit reflects an “infant
industry” rationale: to help a new, inno-
based in Washington, D.C.
AMPA, Fla. — President Donald
that envisage all electric vehicles on their
Trump can pound his chest for not
roads in the not-so-distant future.
only scrapping America’s partic-
Trump has imposed tariffs on China
ipation in the Paris Climate Accord, but
that are as damaging to American farm-
also for killing the electric car.
ers and manufacturers as they are to the
The administration that favors further
Chinese. However, when it comes to
damage to the global ecosystem with its
advancing the Chinese electric vehicle
unbridled support for fossil fuels in their
battery industry, Trump said nothing as a
solid, liquid and gaseous forms saw Tesla Hong Kong-based firm, Frontier Services
buyers as the first to lose their $7,500
Group, established a $500 million invest-
federal tax credit in January.
Tesla tried to make up for the financial ment fund to mine rare-earth and other
vital minerals in Africa.
body blow by reducing the price of its
Such essential minerals, including
vehicles by $2,000, but for many poten-
cobalt,
molybdenum, manganese, alumi-
tial Tesla customers, this year’s tax credit
num,
iron
phosphate, nickel, copper, lith-
of $3,750 was the defining moment in the
ium and columbite-tantalite, are required
decision to buy a Tesla.
to manufacture lithium-ion and other bat-
With no tax credit offered next year,
teries used in electric vehicles.
many potential Tesla buyers will find the
Not so coincidentally, Fron-
well-known electric vehicle far
too costly to purchase — never
tier Services Group is run by
mind their ideological commit-
Blackwater mercenary company
ment to a green planet.
founder and Trump presidential
The elimination of the fed-
campaign adviser Erik Prince, the
eral electric vehicle tax credit rep-
brother of Betsy DeVos, Trump’s
resents another body blow to the
education secretary.
Wayne
clean and smart energy sector in
While the American electric
Madsen
the United States and a huge gift
vehicle industry is taking it on the
for the climate-damaging fossil
chin from the Trump administration, his
fuel industry.
cronies stand to make a handsome profit
Even the might of General Motors,
from assisting the burgeoning Chinese
Tesla’s partner in manufacturing
electric vehicle industry, which hopes to
zero-emission vehicles, was not enough
see 39 percent of all Chinese drivers buy-
to fend off the fossil fuel interests who
ing Chinese-made electric vehicles by
seem to have the Trump Administration
2030.
in a vise grip.
When it comes to adopting a trade pol-
The Tesla-GM partnership is a far cry
icy
that favors American manufactur-
from the 1990s, when GM manufactured
ers, Trump is asleep at the wheel, with
an electric vehicle destined for failure in
the eyes of the consumer. GM’s unpopu-
financial advisers like Treasury Secretary
lar EV1 was a sacrificial lamb and GM’s
Steve Mnuchin, economic advisers Larry
ruse was featured in the 2006 documen-
Kudlow and Kevin Hassett, and Com-
tary, “Who Killed the Electric Car?”
merce Secretary Wilbur Ross shouting
Today, it is Donald Trump who wants
misleading directions into his ear.
to kill the new and more popular versions
The loss of federal tax credits for the
of the electric car. The next electric vehi- electric vehicle have already prompted
cles on the tax credit chopping block are
a drop-off in consumer interest. Some
the Chevrolet Bolt EV and models man-
states, including California, are desper-
ufactured by Ford, Toyota, Nissan, Volk-
ately trying to avoid a second kill-off of
swagen, Volvo, Daimler, BMW, Audi,
the electric car by offering tax credits at
Fiat-Chrysler and Honda.
the point of sale.
The Trump administration’s policy
While helpful, the states cannot hope
on tax credits for zero-emission vehicles
to
make
up for the loss of the federal tax
is another lesson in con-artistry. While
credit.
The
White House must wise up
Trump seeks to damage the zero-emis-
sion vehicle industry in the United States and do so fast.
Wayne Madsen is a progressive jour-
through pulling back tax incentives for
potential buyers, China, the United King- nalist whose columns have been published
dom, India and Norway are pushing goals by American and European newspapers.