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ChadS
Last tank of gas: March 2009
Yeah, that's a really good indicator of how effective financial incentives can be.
WA dropped their 6.5 to 9.5% sales tax waiver at the same time as GA - the end of 2Q 2015. (Well, most of it - it still applies IF the car sells for under $35k). Q3 EV sales in WA were only 10% of what they were in Q2. Of course there were some people that shifted sales earlier because they knew the incentive was ending; I don't have Q4 numbers but Q3 were still only 25% of what they were in Q1. Of course by Q3, some people were waiting for the 2017 Volt, the 30kWh LEAF, and the Tesla X or 3 - it is really impossible to compare these numbers directly. But it is very clear that a financial incentive of this magnitude has a REALLY big effect.
Anecdotally, just before the sales tax waiver expired here, I took a 3 week contract gig at Tesla delivering cars. I tried to ask every customer what drew them to buy a Tesla. About half of those I asked, unprompted, mentioned the sales tax waiver. If they didn't mention it, all at least knew about it when I mentioned it, and most sounded excited about it - I only remember one real "meh". Again, while it's clear not everybody needs it to buy the car, it is also clear that it has a huge effect on sales.
In fact Nissan claims that in states with a PEV incentive (pretty much any incentive), they sell twice as many cars. In states with 2 PEV incentives, they sell three times as many cars.
What I find most annoying about GA and WA dropping their incentives (and OR not adopting one) is that they did not do it to save money. The financial models (I've seen a few, especially for CA; most recently I saw comprehensive studies on GA, WA and OR at SAFE) are VERY clear that states do far better when they switch from gas to electric; the incentive cost * effectiveness rate is far below the net economic benefits. It's all about political optics - they are willing to cost the state significant money to not reward those smug rich EV drivers. (Well, that or they just ASSUME it costs the state and don't read the reports).
WA dropped their 6.5 to 9.5% sales tax waiver at the same time as GA - the end of 2Q 2015. (Well, most of it - it still applies IF the car sells for under $35k). Q3 EV sales in WA were only 10% of what they were in Q2. Of course there were some people that shifted sales earlier because they knew the incentive was ending; I don't have Q4 numbers but Q3 were still only 25% of what they were in Q1. Of course by Q3, some people were waiting for the 2017 Volt, the 30kWh LEAF, and the Tesla X or 3 - it is really impossible to compare these numbers directly. But it is very clear that a financial incentive of this magnitude has a REALLY big effect.
Anecdotally, just before the sales tax waiver expired here, I took a 3 week contract gig at Tesla delivering cars. I tried to ask every customer what drew them to buy a Tesla. About half of those I asked, unprompted, mentioned the sales tax waiver. If they didn't mention it, all at least knew about it when I mentioned it, and most sounded excited about it - I only remember one real "meh". Again, while it's clear not everybody needs it to buy the car, it is also clear that it has a huge effect on sales.
In fact Nissan claims that in states with a PEV incentive (pretty much any incentive), they sell twice as many cars. In states with 2 PEV incentives, they sell three times as many cars.
What I find most annoying about GA and WA dropping their incentives (and OR not adopting one) is that they did not do it to save money. The financial models (I've seen a few, especially for CA; most recently I saw comprehensive studies on GA, WA and OR at SAFE) are VERY clear that states do far better when they switch from gas to electric; the incentive cost * effectiveness rate is far below the net economic benefits. It's all about political optics - they are willing to cost the state significant money to not reward those smug rich EV drivers. (Well, that or they just ASSUME it costs the state and don't read the reports).
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The same attitude and angst seems present in California. The politicians were unhappy to discover that the $2500 subsidy was often going to Tesla buyers, whom they assume to be "rich." Never mind the fact that the median income of EV buyers is significantly higher than the median income of all car buyers, simply because an EV costs more. Plus, only someone with a higher income has the ability to decide to spend some of it on an EV rather than just buying the least expensive vehicle available. Thus, the politicians have changed the program so that now there is an income cap. Since the cap is rather high, it probably won't have too large an effect, but it will somewhat reduce the number of EV's sold in CA.
'I say level the playing field by stopping oil subsidies..."
Just out of curiosity, which subsidies should we stop?
The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them
Just out of curiosity, which subsidies should we stop?
The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them
ChadS
Last tank of gas: March 2009
I'm not familiar enough with the long list (which has been posted several times on these forums; the first time I recall was by VFX probably in late 2009 or early 2010) to say which ones should go first. But in the past I've seen recommendations from the International Energy Agency, Government Accountability Office, Media Matters and the Heritage Foundation if you'd like to poke around to satisfy your curiosity.
I have heard the Congressional Research Service and IMF have some though I haven't seen them. I also imagine the Sierra Club and UCS could be helpful.
I have heard the Congressional Research Service and IMF have some though I haven't seen them. I also imagine the Sierra Club and UCS could be helpful.
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I read that piece despite the sickeningly clickbaitish title (and even headers inside of the text). I agree that people with a story to tell about "Big Oil" will lump way too much into the "subsidies" category because not many people will dig deep enough. When you include a tax deduction for business losses, you're being unfair. That said, there are a number of subsidies unrelated to what every other business gets.
I personally think the biggest subsidy, much bigger than the sum of everything anyone will list for you, is the cost of emissions. We subsidize that in the form of healthcare costs related to particulate emissions (insurance premiums and Medicare/Medicaid) and national security costs related to securing oil. Additionally, we subsidize in the form of FEMA which will pay for reconstruction caused by global climate change events. There is a reasonable likelihood that there will be other national security costs associated with climate change issues and resource contention. For me, that is the subsidy that goes towards oil.
So to answer your question the long way around (sorry), what should we stop? We should stop allowing emissions to be spewed free of charge. There should be a revenue neutral tax on those emissions. That's a freebie that oil takes for granted.
agree with you ohmman that the article's title was over the top.
But just to be fair, the EV carbon footprint in those states with high coal use (for power gen) is not much lower than a gas-fired engine (per the feds).
Alternative Fuels Data Center: Emissions from Hybrid and Plug-In Electric Vehicles
But just to be fair, the EV carbon footprint in those states with high coal use (for power gen) is not much lower than a gas-fired engine (per the feds).
Alternative Fuels Data Center: Emissions from Hybrid and Plug-In Electric Vehicles
I never suggested that electricity producers shouldn't pay for their emissions. Anyone burning fossil fuels would be paying the tax. I'm just saying that it levels the field a bit more. If you were paying 25c/kWh for electricity because your power plant was coal fired, the ROI on purchased rooftop PV or the cheap lease rates from SolarCity would look great. This is why I continue to argue that it's a subsidy.
Vinnie, thanks for your reply...
(The agency which really needs an audit is the Department of Defense, where they routinely fail to pass audits and billions just go mysteriously missing with nobody sure where they went.)
By the way, this is why *Greece* is in a situation exactly like a private business or a household -- Greece gave away their the power to print money to a bunch of Germans at the European Central Bank. This was a bad decision. Those Germans have decided "to hell with Greece". It's not really about whether you're a country, it's about whether you print your own money and whether people accept that money.
Pretty much. Also to convince people to cut government spending which goes to the general public (note that these guys mostly never advocate cutting the spending which goes to well-connected types, such as the military-industrial complex sweetheard contracts). It's about who gets that printed money.
Yes.
Yeah, this does have effects. One key question is always "who prints the money"... another is who are they giving that money to.
I actually *do* support auditing the Fed. The Fed is known for well-hidden backdoor transfers of newly printed cash to wealthy connected bankers via various mechanisms -- as opposed to delivering the cash to the general public -- and people should know what's happening! Honestly all of this is already published and it would pass an audit -- it's just obfusticated -- but an audit might give it better publicity.I don't know what to believe anymore.
(The agency which really needs an audit is the Department of Defense, where they routinely fail to pass audits and billions just go mysteriously missing with nobody sure where they went.)
Aw, it's not that bad. If you want to do something about it, you can always start your own currency -- Paul Glover did.
Exactly, exactly, exactly. Now you know why most people don't think of money this way. Because it's totally different when you *own the printing press* than when you don't.
By the way, this is why *Greece* is in a situation exactly like a private business or a household -- Greece gave away their the power to print money to a bunch of Germans at the European Central Bank. This was a bad decision. Those Germans have decided "to hell with Greece". It's not really about whether you're a country, it's about whether you print your own money and whether people accept that money.
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Darryl
ModelXTracker.com Co-Adm
I agree, it is very possible it may have the opposite effect. There were bills to do away with the 200,000 limit and to increase amount to $10,000. Both did not get out of committee. If it is brought up again, considering current political climate, it all may just disappear.
That's a completely dishonest article, so I'll answer your question and tell you which subsidies we should stop.
First, #1 direct oil subsidy in the US: The below-market-rate leasing on federal lands. The royalty rates going to the federal government for these leases on federal land were set in the 1920s. They're supposed to expire and be renegotiated every 5 or 10 years, but they keep extending the leases at the 1920s rates, without rebidding them or anything!
The trouble is that the people holding the leases (the heirs of the people who found the oil on the federal lands in the 1920s) lobby to keep their sweet deal... and nobody else knows about those leases. So they get away with it. (My family had interests in some of those fields which is why I knew about it.)
There are similar below-market leases for coal mining; Obama finally, just this year, issued some executive orders to stop this ongoing scam. There are even worse below-market giveaways for precious metal mining -- but the oil, gas, and coal leases can be changed by the executive branch, but fixing the precious metal giveaways requires an act of Congress, because the rate was set by the Mining Act of 1872. (Yes, 1872, and not adjusted for inflation.)
Second, #2 subsidy: the "domestic production activities deduction". This was supposed to give a tax break to manufacturing companies for keeping their factories in the US. Instead, oil companies are getting a tax break for, uh, not picking up their oil wells and carrying them to China? This is totally ridiculous; the oil companies can't move the oil wells away from the oil fields, so they shouldn't get a tax break for not doing the impossible.
Third subsidy to get rid of: percentage depletion. This is now only claimed by smaller oil companies thanks to a reform a few decades ago which prohibited large integrated oil companies from claiming it, but the small ones still claim it. It's a complete and utter scam: it *looks* like depreciation, but the companies are allowed to depreciate more than the full value of the property, and it's never clawed back. This is another straight-up giveaway. Yes, I benefited from this one too.
This (thanks for the link ohmman) is a good list, but it omits the below-market leases.
https://www.jct.gov/publications.html?func=download&id=3787&chk=3787&no_html=1
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Nope. After a while there was one which received the *most signatures ever* called something like "Actually listen to these petitions rather than just paying lip service to them".
Since that one (which the administration paid lip service to and did not actually listen to) I have ignored the whitehouse.gov petition site.
What happened was that very early there were a lot of *extremely* popular petitions saying "legalize marijuana". The dumbasses in the administration assumed the petition site had been gamed (it hadn't) and declared that they were all for marijuana prohibition, following which they started ignoring all the other petitions, because they were dumbasses. The fact is that the public wants marijuana legalized. FDR -- who legalized alcohol -- would have been able to spot a genuine popular movement and get out ahead of it, but the dumbasses in the Obama administration didn't.
I wholly disagree with making energy costly because who do you *really* think will be paying for this tax? It will simply be passed down to the consumer using one method or another. This added financial burden only puts up a roadblock for the EV revolution that some so desperately desire. I'm also skeptical of what the climate models predict. I am in full agreement with efforts to curb pollution, however.
And Neroden, on that earlier topic, I think you touched upon a crucial point. Controlling the printing press is all good and dandy, but reckless printing diminishes the confidence of foreign entities holding onto the associated currency resulting in dangerous divestiture and sell-offs, at least theoretically speaking.
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palmer_md
Member
I agree the 200k limit on each manufacturer is not fair. It penalizes the early adopters of the tech who do all the work to promote electric drive which is the whole point of the incentive. I think it would be better if it were 1 million cars total and then phases out which should be more fair to the early promoters of EV's.
Basing incentive on income level a lot more fair than politicians establishing arbitrary cut off value, such as 35k at Washington state. Also, as you noted, California income income caps are pretty high, above which EV incentive is no longer an incentive.
Tina C
Member
My understanding is that it is an unfunded tax reduction, so no other taxes were increased to pay for it. Unfunded it either contributes directly to the deficit/debt or it is made up by cutting funding to other programs. I would love to see it extended if it was funded by eliminating/reducing subsidies to the oil & gas industries.
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