I got another request-to-sign petition from the Daily Kos. It asked me to petition Congress to renew the tax credit for electric vehicles.
I declined. It’s not because I am a Trump supporter or Republican spy. It’s also not because I don’t like electric cars. Even before the environmental groups, Arab oil embargoes and climate change concerns, I believed that electric propulsion was the real future of transportation. I was following the progress of fuel cells more than 20 years ago.
Besides, as the late Sir Arthur C. Clarke once observed, oil is far too useful a chemical to just burn it up.
I recently wrote a Medium article which you can read if you wish. It is not behind Medium’s paywall.
My opposition to extending the tax credits is that they are yet another tax bennie for the well-to-do, who already have enough goodies courtesy of the rest of us.
What a lot of people don’t know is that the EV tax credit is a one-time, non-refundable tax credit. In order to take advantage of the full amount, one has to owe at least $7,500 in income taxes after all deductions, exemptions and other credits. For a person filing singly, that takes an adjusted gross income of more than $60,000. For a married couple filing jointly, the figure is closer to $89,000.
Studies have indicated that the typical EV buyer has an income well in excess of $150,000 per year.
There’s another quirk in the EV credit program: a buyer can either purchase or lease the vehicle and get the same benefit. Since the majority of EVs are leased, usually at very favorable rates, this means the tax credit can lower the monthly payment substantially.
Of course, the automakers want the EV credit. It’s one of the most generous incentives out there and they don’t have to pay a penny for it. GM, which is looking at losing the credits sometime next year, doesn’t even offer any other incentives on the Chevrolet Bolt.
So instead of extending the current program, I believe we should end it and put together a new program that will help lower-income families trade in vehicles that average 11 years old on newer EVs.
The market already provides us with a method. Electric vehicles depreciate far more quickly than conventional vehicles in spite of the fact they are basically more durable and less likely to have mechanical failures. The value-killer is the spectre of costly replacement batteries. A new battery pack for a Nissan Leaf can run over $6,000, including labor.
We should ask Congress to come up with a new EV program that could actually spur more people to transition to electric vehicles. Let’s gear it to getting lower-income families into pre-owned EVs without the fear of battery replacement costs.
Of course, if you really want to champion a program that rewards an automaker that just announced it’s going to dump thousands of well-paying jobs, close plants (costing even more jobs as a consequence), and has saved more than a billion dollars at taxpayer expense, then, by all means, you should sign that petition.
If you actually claim to be any sort of progressive, you should shun that petition like it was the brainchild of a Republican.