Fossil fuel and other interests are working heavily Republican U.S. state houses in an effort to spike the tires of the electric car industry, the New York Times reports. The state-level action “could put the business of electric vehicles, already rocky, on even more precarious footing,” the paper warns, “particularly as gas prices stay low” and the Trump White House eases up on fleet fuel efficiency mandates.
“In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire,” the Times writes. “In at least nine states, lawmakers have introduced bills that would levy new fees on those who own electric cars.” The actions have been taken in both “liberal-leaning [states] like Illinois, and conservative-leaning ones like Indiana,” the paper notes.
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The effects were dramatic in mid-2015 when Georgia dropped a $5,000 tax credit for electric vehicle purchases and replaced it with a $200 additional registration fee, purportedly to make up for the gasoline tax EV drivers no longer pay to support road and bridge infrastructure. Monthly EV sales in the state plummeted from nearly 1,300 to “just 97 cars.”
Colorado legislators are weighing “a bill that would end income tax credits for owners of electric and alternative fuel vehicles,” the outlet reports. “In Utah, lawmakers voted this month against extending the state’s tax credit for electric cars.” Other states, “including Illinois, Pennsylvania, and Tennessee, have already let their incentives expire,” bringing the number offering incentives for e-car purchases down from 25 to 16.
Meanwhile, 10 states have levied special fees on electric or plug-in hybrid vehicle owners, and at least nine more, including Indiana, Kansas, and Montana, are considering them. “Even California is looking at imposing a $165 yearly car registration fee on zero-emissions vehicles,” the Times writes.
Colorado’s measure—and possibly others—have been backed by Americans for Prosperity, an advocacy group funded by the billionaire David H. and Charles G. Koch brothers, among the largest holders of licences in the Canadian tar sands/oil sands along with other fossil fuel and petrochemical assets.
The withdrawal of incentives “is going to crash this market,” warned Jessica Caldwell, an auto industry analyst at Edmunds.com. Less certain is whether state-level policy changes in the U.S. would alter bullish outlooks for electric vehicles’ growing share of global sales. Several analyses have suggested electric vehicles are “game-changers that the fossil fuel industry consistently underestimates.”
That means state policy reversals could leave the United States stuck in park while other nations speed ahead in innovation. “A slowdown in the country’s shift toward battery-powered vehicles could leave the American auto market a global laggard,” the Times notes. “A similar situation a couple of decades ago, when American car companies stayed away from small cars,” allowed Japanese automakers to enter the North American marketplace by dominating a key market segment, the paper recalls.
“It’s not just about the environment,” stressed Joel Levin, executive director of Plug In America, a non-profit organization that promotes electric cars. “These vehicles are also about being a leader in this new technology that everyone agrees is coming. If the U.S. isn’t a leader in this technology, we’ll be buying them from someone else.”
That someone else may well be China, the Times notes, where EV sales “are estimated to have jumped more than 70% last year” and created “the world’s biggest market for electric cars, with about 630,000 units on the road.”
