EV Purchase Incentives Are Under Fire In Many US States

With the early introduction of affordable, long-range EVs like the Chevy Bolt (with 238 miles of range) and the Tesla Model 3 (slated to move into production in July with 200+ miles of range), 2017 is expected to see banner sales of electric vehicles.

However, the transition to EVs also represents a drastic change from long-established global business models that have grown accustomed to generating billions of dollars of profit each year from the legacy automobile industry and the fossil fuels they consume.

While the fossil fuel industry has resisted EVs over the years, the war is only beginning. As the Tesla Model 3 production ramp up hits its stride and the Early Adopters give way to the Early Majority in the EV adoption curve, Big Oil will start to feel the pain as gasoline consumption drops and erodes demand of an already unstable commodity.

With these changes on the horizon, 2017 is shaping up to be a big year for Big Oil in the fight against EVs, and it is taking the fight to the states. Increased fees levied on EVs is not just about Big Oil pushing back on the new guy on the block — many states have built taxes to fund road construction and repair into the price of gas and are looking for new mechanisms for recouping these costs.

Is a new annual fee on EVs the best way to pay for roads? How about a tax on tires, which has a more linear relationship with actual road wear incurred by the vehicle? These new taxation models are colliding with and being combined with the untimely elimination of state EV purchase incentives for a come-along effect on EV sales.

Georgia, for instance, went from having a $5,000 EV incentive to now having an extra $200 fee on EVs to help recoup taxes lost from EV drivers not having to stop at the pump.

Hiroko Tabuchi noted in a recent New York Times piece just how broad the attack on EV credits is:

Today, the economic incentives that have helped electric vehicles gain a toehold in America are under attack, state by state. In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire. And in at least nine states, including liberal-leaning ones like Illinois and conservative-leaning ones like Indiana, lawmakers have introduced bills that would levy new fees on those who own electric cars.

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In Colorado, a bill that would end income tax credits for owners of electric and alternative-fuel vehicles is working its way through the legislature. In Utah, lawmakers voted this month against extending the state’s tax credit for electric cars.

The measure in Colorado has been backed publicly by Americans for Prosperity, an advocacy group founded by the conservative billionaire brothers David H. and Charles G. Koch, whose wealth is founded on their petrochemicals empire.

While the elimination of purchase incentives is happening for a variety of reasons under dozens of guises across the nation, it is clear that Big Oil is scared, and for good reason. EVs are poised for liftoff on the new technology adoption curve that we have seen with so many disruptive technologies in the past.

The change will not go down in the history books as a peaceful transition, but with billions on the line, the petrochemical industry is gearing up for war and the fight is going to get ugly.

But all is not lost. EV purchase incentives still exist in 16 states, with new local incentives coming online to support the cornerstone federal tax credit almost every day. Get involved. No matter what country you live in, whether you’re in a Red or Blue region, whether the power comes from coal or solar, or whether you can even afford a car or not, get involved.

The push towards the electrification of personal transportation is a key stepping stone in the journey toward a low-carbon and even a zero-emission society, and it’s going to take decades. The faster the transition, the higher the chance we as a species have of averting the extreme effects of climate change on our planet and on the people of the world.