Not a Fan of EV Tax Credit Plan

[Smitty79]

Rob does an analysis of the EV tax credit in the plan. In general, I'd prefer a carbon tax to EV credits as it allows a more free market solution.

Rob points out that marginal battery PHEVs will count as EVs and that the bill excludes Tesla from some of the credit. This is the Democrats way to provide my tax dollars to the UAW. This dilutes the effort to combat climate change to pay off political supporters.

 

[advocate8]

Why not both?

 

[Smitty79]

Why not both?

Because I'm not a fan of the government deciding on solutions. If they just make sure that negative externalities are properly priced, the free market will find the solutions, faster and at lower cost, than government.

 

[tm1v2]

Not to mention how the House bill favors SUVs and trucks over more efficient vehicles. That's blatantly regressive. I hope the Senate pushes back on that.

 

[advocate8]

Because I'm not a fan of the government deciding on solutions. If they just make sure that negative externalities are properly priced, the free market will find the solutions, faster and at lower cost, than government.

This still suggests carbon tax and tax credits for EVs are a zero sum. It could well be carbon tax is a 70 percent efficient benefit and EV credits are I dunno, 15 percent efficient, however you wan to measure efficiency.
I'm not going to call either a “solution" because the implication of that word for many is something that completely fixes a problem. Both are partial solutions at best.
This is a problem we pretty much need to throw everything at because it is already too late to stop the major effects. All we can do it blunt them.
The free market favors entrenched interests and it is slowing solutions at a time when we don’t have time. So yes, the credits make sense to me as one of a quiver of weapons.

 

[advocate8]

Not to mention how the House bill favors SUVs and trucks over more efficient vehicles. That's blatantly regressive. I hope the Senate pushes back on that.

There is def something to this. The types and cap amounts in the current draft of the bill are a bit puzzling. It makes the credits even more a blunt instrument than they needed to be. But Congress is in a place right now where seeking perfect could instantly become the enemy of the good. Everything in that bill and the bill itself is in play almost to whims.

 

[MontyFloyd]

I'd prefer a carbon tax to EV credits

I am good on that, but inevitably that will raise fuel prices, and that will eventually cause resentment / anger, there is always an election around the corner.

Giving credits is usually the most acceptable way to incentivize.

 

[advocate8]

I am good on that, but inevitably that will raise fuel prices, and that will eventually cause resentment / anger, there is always an election around the corner.

Giving credits is usually the most acceptable way to incentivize.

All true. it will take some even greater than the Kentucky tornadoes, western fires and serial hurricane hits in the Southeast to disrupt that kind of anger and bring some reality, but at this point I cant even imagine what catastrophe it would take.
also? I just have to sit here a minute and appreciate someone who can string together intelligent phrases like you did to bring clarity to the tax credit discussion.
This issue is more complicated than it looks and you clearly understand that.

 

[tm1v2]

Re: ICE/fuel tax vs EV subsidies - I like the idea of raising fossil fuel taxes in principle, but it's potentially very regressive. The upper middle class and wealthy can afford it, but for those just eeking by financially it could be a serious problem, most places in America require driving to efficiently commute and run errands.

In the long term raising fuel taxes combined with EV / ZEV subsidies (for new *and* used!) is probably the way to resolve this, as @advocate8 said, but we're many many years away from having enough EV supply for EV subsidies to help anyone with a really limited budget. Honestly in 2022 EV tax credits won't help EV adoption at all, but they should incentivize larger EV manufacturing investments from ICE car makers, which should help in the medium term.

 

[MontyFloyd]

but it's potentially very regressive. The upper middle class and wealthy can afford it, but for those just eeking by financially it could be a serious problem,

Agree, however I believe that the wealthy often drive gas hungry vehicles huge trucks), and probably drive more than someone who has to count coins. Still, when people are tight budgeted it still will hurt, be a while before BEV's are affordable for them.

 

[uujjj2]

carbon tax = $7 gasoline

carbon tax = 2x heating bill for all those Midwest swing voters with nat gas furnaces

Congress isn't gonna do it. Elon's a genius but he's no political genius, that's for sure.

 

[uujjj2]

What we need to do to stop global warming is net zero emissions. But zero emission technology is not available at a sufficient scale for average middle class customers to adopt immediately. Changing this is Tesla's entire mission, for goodness sake.

The fastest path to net zero is to accelerate the industrialization of zero emission technologies.

A carbon tax would accelerate the adoption of fuel saving technologies rather than zero emission technologies. These fuel saving technologies (e.g. hybrid cars) are just a local maximum that still leads to climate disaster, just delayed. To push towards zero emissions requires combining a carbon tax with subsidies for zero emissions tech. A carbon tax plus EV/renewable subsidies would be the most effective policy.

But a subsidy program without a carbon tax is more palatable politically, so that's the policy that's going to be implemented.