EV Subsidies Funnel Taxpayer Money to the Rich
Do you own an electric vehicle? If not, you stand with the majority of Americans, as the average household income of electric vehicle (EV) purchasers is upwards of $200,000.
You may not know, however, that the government is heavily subsidizing electric vehicles (EVs). That’s right, Congress is using your tax money to give the wealthy a $7,500 tax credit for buying an EV. Right now, the tax credit only applies to the first 200,000 EVs from a manufacturer. Yet, General Motors, Tesla, Nissan and other EV manufacturers are lobbying hard to remove that cap.
This subsidy is a burden on American families and disproportionately impacts low-income consumers, who can’t afford to purchase EVs, but are forced to pay for supporting infrastructure. If EV manufacturers succeed in lifting the 200,000 EV cap, the result would be a reduction in personal income of all U.S. households of $95 billion or about $610 per household between 2020 and 2035, according to a recent study by NERA.
EV subsidies are a special interest giveaway to the wealthy, plain and simple. Despite the millions of dollars in subsidies and rebates, for the most part, it’s only wealthy Californians buying EVs. In fact, more EVs were sold in California than all other states combined in 2017. And Americans in the top 20 percent of income earners received about 90 percent of the federal tax credits for electric vehicles, according to a study by the Energy Institute at Haas-Berkeley.
Additionally, despite the fact that owners of EVs use public highways like everyone else, they don’t pay the gas taxes that go toward supporting our Highway Trust Fund like other vehicle owners. Thus, they pay little or nothing to maintain our roads and bridges.
Furthermore, electric cars do nothing to curb global emissions. As recently cited by the International Energy Agency, “today we have 5m electric cars, even if there were 300m with the current power generation system in the world the impact on CO2 emissions is less than 1%.”
The bottom line is that the government should not be forcing taxpayers to subsidize EVs. It not only allows the government to pick winners and losers in the market, its bad fiscal policy that costs taxpayers billions.
Thankfully, consumers have an advocate in Congress. Senator John Barrasso (R-WY) recently introduced legislation that would end electric vehicle tax credits and ensure a level playing field by making sure ALL drivers pay into the Highway Trust Fund to improve our roads.
Congress should act to move this legislation quickly. Consumers shouldn’t be forced to funnel their money to wealthy EV manufacturers and buyers.
Matthew Kandrach is President of CASE, Consumer Action for a Strong Economy, a free-market oriented consumer advocacy organization.