The government is not doing a very effective job of playing car salesman.
Despite providing federal manufacturing grants and loans worth $40.7 billion and other $2 billion in federal tax credits to subsidize electric car purchases, electric cars, or zero emission vehicles, are just 0.5 percent of the marketplace. California and many other states just appropriated another $140 million for electric car subsidies in the 2017-18 budget.
As my colleague Wayne Winegarden wrote in the recently-released PRI study “Costly Subsidies for the Rich,” most Californians aren’t really benefitting by the government playing car salesman. In fact, Wayne’s study found that upper-income and wealthy individuals are claiming 99 percent of the subsidies.
Unable to entice more Californians to buy electric cars, Gov. Brown and some in the Legislature are turning up the heat. Legislation proposed by San Francisco Democrat Phil Ting would ban the sale of electric cars by the year 2040, a concept Brown has recently discussed.
As lawmakers draw up plans to outlaw gasoline-powered automobiles, three groups in California are eyeing the easy money they could grab if motorists are forcibly transitioned to electric vehicles.
The Public Utilities Commission is handing Southern Cal Edison, Pacific Gas and Electric, and San Diego Gas & Electric $1.2 billion in taxpayer money to place charging stations along the highways, at commercial-fleet depots, and in private residences, and in general to promote a political agenda in support of EVs.
Conveniently, this effort comes at a time when power companies have asked for the ability to have ratepayers pay for the damages caused some of the recent state wildfires – the biggest fires in the history of California. These power companies are all too happy to play ball promoting Sacramento’s electric car agenda, and potentially reaping the windfall of an all-electric car future. If they receive for favorable consideration by the PUC to pass off hundreds of millions in costs to ratepayers, all the better.
This mess is more reason for state government to get out of the electric car promotion business altogether. State policymakers should end the regulations that drive up the costs of car production in the Golden State, allow the market to dictate car prices, and stop telling Californians what kind of car they should buy.
Tim Anaya is the Pacific Research Institute’s communications director.