Thomas Elias: Should California triple its EV subsidy?
Phil Ting is adamant about it. California needs to triple its subsidies for electric vehicles right now. But he might have to reduce his goal for the subsidy if he expects his bill to pass the Legislature when it returns from its current recess.
For sure, the subsidy expansion plan from Ting, a Democratic assemblyman from San Francisco, will be back. As proposed, it would triple a typical car buyer’s rebate for buying an electric auto to $7,500, with reductions over time as California gets closer to its stated goal of 5 million zero emission vehicles on the road by 2030.
Said Ting, a former county assessor/recorder of San Francisco reelected to the state Assembly with an 80 percent majority last year, “California still has a long way to go – at the beginning of 2019, there were only 550,000 clean cars…on our roads.”
But tripling the state rebate for EVs raises other questions, mostly about fairness and equity.
Because electric vehicles generally cost thousands of dollars more than comparable gasoline models, the Ting proposal amounts to a subsidy for the well-to-do. In fact, it would make up for the federal EV and plug-in hybrid subsidies President Trump has set out to eliminate as early as next year.
Already, federal subsidies for Tesla and General Motors EVs have run out, because those companies long ago passed the 200,000-unit sales level at which the U.S. support ends, intended as it was to jump-start new concepts into public acceptance.
Ting may not have thought much about the issue of fairness – why should someone who can afford a $50,000-plus Tesla get a subsidy for driving a luxury car while the less wealthy struggle to buy conventional used cars for $5,000 to $10,000?
But remember, Ting was once the property tax assessor in the city that ranks either first or second in America in real estate prices, with no ceiling in sight on those. The high prices of EVs may not look so hefty to him, living as he does in his city’s Sunset District, where it’s hard to find a fixer-upper house for under $1.3 million.
In fact, a 2018 study by the conservative Pacific Research Institute found 79 percent of electric and plug-in tax credits were claimed by households with adjusted gross incomes topping $100,000 per year, while a 2015 UC Berkeley study similarly found that “the top income quintile (top 20 percent) has received about 90 percent of all EV credits.”
But Ting is convinced putting more EVs on the road is the key to combating climate change.
“Forty percent of greenhouse gas emissions stem from transportation,” he said on introducing his plan, known legislatively this year as AB 1046. “We need bigger incentives now to get more zero emission vehicles on the road and slow our climate crisis.”
Ting said he deliberately designed his proposal so rebates would drop gradually. “There is no real incentive to buy or lease a zero-emission vehicle (ZEV) right now if consumers know the rebate level will be the same year after year,” he said. “But if consumers have certainty that the rebates will diminish as time goes on, they might act sooner rather than later.”
That logic might in fact increase ZEV sales. But it doesn’t speak to the fact government rebates for expensive products mean that poor and middle-class Californians are subsidizing the rich.
Maybe the $100,000-plus income level typical of EV buyers doesn’t look high to Ting, but it surely does to many others. One 2018 poll found two-thirds of voters did not want to pay for wealthier people to buy electric vehicles.
The website of the Washington, D.C.-based Energy Equality Coalition (funded in part by the oil-centered owners of Koch Industries), declares that EVs today are “Built by billionaires, bought by millionaires (and subsidized by the rest of us).”
There’s also the fact that EV owners pay no gasoline taxes, so they do little to help pay for the roads on which they drive.
In short, Ting wants an essentially unfair program in hopes it will make EVs a major automotive factor. But that has not yet happened despite half a decade of subsidies, state and federal.
Email Thomas Elias at firstname.lastname@example.org. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, visit http://www.californiafocus.net
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