What You Should Know About Government Mandates for Electric Vehicles

Touted as a way to tackle climate change and reduce emissions, electric vehicles (EVs) are generating a lot of buzz nowadays. Pennsylvania is among other states moving forward with a mandate to require car dealerships to carry a certain number of EVs.  Tackling the risks of climate change takes an all-hands-on-deck approach across innovative technologies and a level playing field that supports consumer choice. The transportation sector is, perhaps, where the U.S. can make the greatest use of a mix of new technologies to reduce greenhouse gas emissions – using vehicles running on batteries and engines running on today’s cleaner petroleum-based fuels.

All types of vehicles produce emissions throughout their lifecycles. When it comes to EVs, mining and manufacturing the car’s lithium battery and charging it using the electric grid – often powered by natural gas – requires energy that produces emissions. The term Zero Emission Vehicle is a misnomer.

Just since 2004, the fuel economy of new cars, trucks, and SUVs has increased 29 percent, and their related carbon dioxide emissions have dropped 24 percent. Furthermore, advanced internal combustion engine and hybrid electric vehicles can achieve comparable reductions in greenhouse gas emissions as similarly equipped, full-battery EVs.

Pennsylvania, as well as other states and the federal government, however, are pushing policies to subsidize EV-related charging infrastructure. What that means is everyone will bear the additional costs of building and maintaining EV charging stations, regardless of the type of vehicle they drive.

Currently, consumers can claim a federal tax credit of up to $7,500 for qualifying EV purchases, in addition to a variety of state government rebate programs, but these credits disproportionately benefit upper-income households, whose vehicles are effectively subsidized by other taxpayers. In 2018, 97% of the claims for the federal BEV income tax credit were submitted by taxpayers earning $100,000 or more, according to Internal Revenue Service survey data.

Bottom line: Taxpayers and consumers bear the costs of EV purchase incentives and infrastructure build-out. This unfairly burdens those without EVs by making them pay for a product they may never use. While there is plenty of room on the road for all kinds of vehicles, the market should be driven by consumer preferences, needs and affordability, not government mandates.