Battery electric vehicle sales in the United States reached nearly 240,000 vehicles for 2018. They are expected to top that in 2019. One reason is low operating costs. EVs are significantly cheaper than gas-powered vehicles over the life span of the vehicle. But the initial cost of an EV is a barrier to many buyers. If we are to transition to a clean, affordable transportation system, we’ll need to help car buyers overcome that initial cost barrier. The good news is that we can.
U.S. Rep. Jackie Speier, D-San Mateo, recently introduced HR 5393: The Affordable American-Made Automobile Act, or AAAA. If passed into law, the AAAA would raise the new EV tax credit of $7,500 to $15,000 for EVs costing $35,000 or less. This would make EVs affordable for middle-income buyers. It also would create a new $5,000 tax credit for used EVs, providing even wider access. To qualify, the vehicle’s battery and battery system would need to be manufactured in the United States.
The bill also fosters the installation of fast charging stations by eliminating the $30,000 tax credit cap on charging stations. Last but not least, the AAAA would authorize $15 billion for tax-exempt bonds issued by or on behalf of a local or state government for the purpose of retooling assembly lines and constructing manufacturing facilities for batteries and EVs.
The macroeconomic impact would be significant. Rep. Speier’s bill would promote hundreds of thousands of high-quality American manufacturing jobs and help the American auto industry catch up to China’s early lead in EV manufacturing. China sells most of the world’s EVs. American manufacturers sell just 10%. As more and more countries mandate EV purchases, the EV industry built today will be set to capture greater future market share. Speier’s bill is just what we need to keep the American automobile business in business, while cleaning up its act.
The AAAA came out of the gate strong. It attracted 30 original cosponsors and is endorsed by the UAW, the United Steelworkers union and several environmental organizations, including the Sierra Club, the League of Conservation Voters, and the Natural Resources Defense Council. This makes perfect sense as EVs are both the future of transportation and critical to decarbonizing our economy.
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The AAAA fits well with another bill, HR 763: The Energy Innovation and Carbon Dividend Act, or EICDA. The EICDA, cosponsored by 75 members of Congress, including Speier and U.S. Rep. Anna Eshoo, D-Palo Alto, seeks to decarbonize the energy sector — first and foremost, the electricity sector — by putting a price on carbon emissions. Economist of all schools of thought agree that putting a price on carbon is the single best tool to decarbonize our economy. The EICDA would establish a low but inexorably rising fee on fossil fuel carbon emissions. The fee’s revenue would be returned on an equal basis to all U.S. residents with a Social Security number or tax ID. The consequent rising cost of fossil fuels and carbon intensive products would spur consumers to use their carbon dividend checks to purchase cheaper, cleaner fuels and products.
Here is where the AAAA is important. Without better access to clean alternatives, like EVs, consumers will have limited options to reduce their carbon emissions. The AAAA will help ensure more consumers have clean alternatives for their transportation needs. It will help maximize the benefits of a decarbonized electricity grid which the EICDA will promote. The AAAA and the EICDA are perfectly complementary and mutually reinforcing.
Rep. Speier is to be congratulated, not only for her commitment to jobs and the American auto industry, but for getting behind two pieces of legislation that together support efforts to address the great existential crisis of our time: climate change.
Alan Mattlage is a retired librarian who holds a Ph.D. in political philosophy from the University of Illinois. He is a member of the San Mateo County chapter of Citizens’ Climate Lobby.
Apparently the author has never taken economics, math or physics very seriously. EVs are possibly a solution but will require a substantial increase in the capacity of our electric grid. Just this past weekend Tesla drivers were waiting on California's North/South freeways for hours to get their vehicles charged so that they could continue to their destination. All electric services to those homes with EV owners will need to be boosted at considerable expense. Based on PG&E's projections, this will take years and millions of bucks. If the EV owner wants to cut loose from the grid, a homeowner in Danville (Sunday's SF Chronicle) just spent $60K to accomplish that. EVs can contribute to the carbon mitigation issue but all should be aware that significant economic investments will need to made by the State probably resulting in skyrocketing taxes and utility rates. Are we ready for that? BTW, EV car manufacturing will not provide for new jobs, they may just replace those lost to carbon fueled car production.
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Apparently the author has never taken economics, math or physics very seriously. EVs are possibly a solution but will require a substantial increase in the capacity of our electric grid. Just this past weekend Tesla drivers were waiting on California's North/South freeways for hours to get their vehicles charged so that they could continue to their destination. All electric services to those homes with EV owners will need to be boosted at considerable expense. Based on PG&E's projections, this will take years and millions of bucks. If the EV owner wants to cut loose from the grid, a homeowner in Danville (Sunday's SF Chronicle) just spent $60K to accomplish that. EVs can contribute to the carbon mitigation issue but all should be aware that significant economic investments will need to made by the State probably resulting in skyrocketing taxes and utility rates. Are we ready for that? BTW, EV car manufacturing will not provide for new jobs, they may just replace those lost to carbon fueled car production.
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PLEASE TURN OFF YOUR CAPS LOCK.
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