GOP tax plan keeps green energy, electric car subsidies

By Chris White

The House and Senate agreed Thursday to scrap a proposal eliminating a large tax credit the electric vehicle market and other green energy companies rely on to keep the fledgling industry afloat.

Lawmakers spared a $7,500 electric-vehicle tax credit and a wind production tax credit that Republicans nixed to balance out the hefty tax bill, according to a Bloomberg report Thursday. The Senate’s version of the bill does not include the provision.

Another provision potentially affecting the industry has not yet been eliminated. The so-called Base Erosion Anti-Abuse Tax provision (BEAT) could erode the value of solar and wind credits and dry up a $12 billion tax-equity market, according to McDermott Will & Emery, a law firm that specializes in international tax trade.

Republican Sen. John Thune of South Dakota, who serves on the Senate tax-writing committee, argues the House and Senate bill will work to address BEAT.

“We’re working on it,” he said in an interview earlier this month. “Nothing’s finalized yet but we recognize that is a problem created by the BEAT and we are trying to ensure those types of projects aren’t adversely affected.”

Tesla, a Silicon Valley automaker that relies heavily on the electric vehicle tax credit, saw its stock tumble from about $321 per share to roughly $296 after Republicans called for the immediate repeal of the tax credit.

Making matters worse, the draft emerged shortly after Tesla announced its worst ever third quarter as the company admitted to not meeting production targets for the new Model 3 car — CEO Elon Musk managed to make just 220 of the 1,500 he promised.

The tax credit drives most of Tesla’s sales, analysts argue. Electric car sales slumped badly in Georgia, going from 1,400 a month to just 100 a month, after the state shuttered its $5,000 credit. Other countries have eliminated electric vehicle credits with similar results.

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4 thoughts on “GOP tax plan keeps green energy, electric car subsidies

  1. The all-knowing state, working together with self-styled transportation gurus, and RE aficionados, want to force people to drive electric vehicles.

    The same folks pushing for carbon taxes, also are pushing for plug-in vehicles, including light duty vehicles, LDVs, buses and trucks. Never mind the plug-in buses and trucks are still in their infancy. Vermont, with chronic, systemic budget deficits, must have money to burn on various follies.

    Market Penetration: Here are some facts on plug-ins (EVs and plug-in hybrids)

    The number of plug-ins on US roads has increased during the past 6 years.
    Plug-in sales are expected to be about 1.2% of all light duty vehicle, LDV, sales in 2017.

    In Vermont, the number of plug-ins increased from 88 in July 2012 to 1,113 (plug-in hybrids 865; EVs 248), in January 2016; 0.6% of all new vehicle registrations.

    In Vermont, the two vehicles shown in the table were 415 of all plug-in hybrids (48%).

    Most popular in Vermont Plug-in hybrid mileage
    Toyota Prius Prime……… 25 miles as electric; 54 combined as hybrid
    Ford C-Max Energi……… 19 miles as electric; 42 city/38 hwy/40 combined as hybrid

    The 22 fast-charging and 88 slow-charging stations are predominantly clustered in and near three towns: Burlington, Montpelier, and Rutland.

    The RE activists in these towns would like to have other Vermonters, and have carbon taxes, and use Volkswagen settlement money, to pay for charging stations that would be located mostly in and near these towns, and would like the charging electricity to be tax-free, low-cost, or for free; cost shifting and subsidies are the name of the game to make plug-ins look good.

    Almost half of US plug-in sales are in California, which has mostly nice weather.

    Not so in New Englandwith snow and ice, and hills, and dirt roads, and mud season, and at low temperature, say – 10 C, with the heat pumps heating the battery and the passenger cabin, would be very slow going, unless the EV had a large capacity, kWh, battery. The additional stress would cause increased battery aging and capacity loss.

    Year/Plug-in sales US California % US LDV sales
    2017 est. 200,000 17,400,000
    2016 159.333 75,250 47.2 17,464,800
    2015 114,248 62,217 54.4 17,396,300
    2014 123,347 59,485 48.2
    2013 96,602 42,545 44.0
    2012 55,392 20,093 36.2

  2. I resent that my taxpayer dollars are helping to purchase a car that uses technology that does not work in a lab. If it does not work in the lab, why would anyone expect it to work in the field? It makes no sense, except that it buys the votes of the technically illiterate greenies who actually believe in the electric car scam.

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