California Doubles Down on Folly of Electric Vehicle Tax Credits

California Doubles Down on Folly of Electric Vehicle Tax Credits

California officials want to eventually force everyone on the road out of their gasoline- and diesel-powered automobiles and into electric vehicles. But it’s a radical shift that can’t be decreed into existence overnight. So, expect a boost in the government bribe to encourage more consumers to buy zero-emission vehicles.

Sacramento has for years provided zero-emissions vehicle (ZEV) buyers with a $2,500 subsidy from the Clean Vehicle Rebate Program. Apparently, that’s not enough, though, for the state to reach its goal of ridding roads of the pestilence of the internal-combustion engine. Enter the California Air Resources Board, which in late September, approved amendments to the state’s Low Carbon Fuel Standard that will allow utilities to amass more tradeable credits, which are doled out to them for providing electricity used to charge ZEVs. A portion “of the proceeds from sale of those utility credits,” says CARB, “will be used to increase the rebates from utilities to drivers purchasing electric vehicles.”

The media reports that the increase will nearly double the current subsidy, taking it to $4,500. CARB, however, will only say the vehicle rebate programs will be restructured “into a single pool so application and payment processes are uniform.”

State officials clearly want to accelerate the pace of adopting ZEVs so they can meet, if not beat, their goal of expanding their share of cars on the road to 22 percent by 2025, reaching 5 million in total in 2030, and maybe even fully eliminating fossil-fuel-powered automobiles by 2040. They believe the climate is in danger of an imminent collapse due to emissions from internal-combustion engines, so waiting for technology to mature and consumer preferences to change just isn’t in their plans.

Before the state gets too far ahead of itself, there are some salient facts that need to be considered:

  • ZEVs are not in truth zero-emissions vehicles. When an electric car is plugged into a charging station, a power plant somewhere is emitting carbon dioxide and other byproducts of combustion to generate the electricity. The only way around this is to charge the car at a station connected solely to a 100 percent zero-emissions source, a terribly unlikely event.
  • Power plant emissions will swell to levels they would not have otherwise reached as the growth of ZEVS increases consumption.
  • Even hydrogen-powered cars fail the zero-emissions test. The entire manufacturing process, starting with the procurement of parts, leaves a long trail of emissions.
  • Today’s new gasoline-powered automobiles “emit very little pollution, and they will emit even less in the future,” says a Manhattan Institute study published earlier this year.
  • ZEVs produce more sulfur dioxide, nitrogen oxides, and particulates than autos with internal-combustion engines
  • Americans are justifiably opposed to governments trying to force ZEVs on the public. According to an American Energy Alliance poll, 72 percent of voters say “they did not trust the federal government to make decisions about what kinds of cars or transportation technologies should be subsidized or mandated”; two-thirds believe “they should not pay for people to buy electric vehicles”; 69 percent agree that “electricity customers should not be forced to pay for charging stations.”
  • ZEV incentives primarily benefit the rich. According to PRI senior fellow Wayne Winegarden, 79 percent of electric car subsidies are claimed by households with annual adjusted gross incomes greater than $100,000, while households with yearly incomes exceeding $50,000 claim 99 percent of the credits.

California officials are so heavily invested in the climate scare that they will continue their aggressive effort to decarbonize with little regard for facts that counter the narrative. It wouldn’t hurt to slow down. But that’s not an option for those determined to demonstrate their virtue through public policy.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.